Every five years, quangos are subjected to a thorough review. The corporation was first reviewed in 1990 and again in 1995. A number of changes followed, including a reorganisation of the agency's regional structure and greater powers to deal with registered social landlord mismanagement. More fundamental questions, such as "Should it exist at all?", were asked. But the corporation was considered the right organisation for the job. Its dual role of funder and regulator was also endorsed because it seemed to work and the one function was judged to give teeth to the other, especially in the eyes of lenders.
Now, however, the situation has changed. The year 2000 review is again asking whether the corporation is the "appropriate body" to regulate and fund social landlords (Housing Today, 16 December). But this the debate has a different context.
First, another regulator has appeared on the scene - the Audit Commission's housing inspectorate. Meanwhile, north of the border, regulation of all Scotland's social landlords is to come under one roof. Scottish Homes will become an executive agency and its £200m annual development funding will pass to local authorities. Does it make sense to have two regulators for social housing in England?
Second, the policy agenda has changed. The government is promoting sustainable communities, modernisation and innovation. It wants local authorities to deliver Best Value. It wants all 'stakeholders' to have more say in how their communities are run. Its Social Exclusion Unit wants innovative solutions to problems such as poverty and low demand.
The Housing Corporation has arguably been slow to pick up on issues such as sustainability and Best Value. Its style of regulation - essentially based on filling in long forms - appears to be the same no matter what the size of the organisation or the character of the communities in which it operates. As stock transfer has boomed, under-resourced corporation staff have also been flooded by a tide of new registrations. It is known that the corporation is finding it difficult to cope with all the extra work - which begs the question, how can it possibly keep up with its normal regulatory duties?
Margaret Moran, MP for Luton South, and a member of the public administration committee's inquiry into quangos, thinks the corporation is on its way out. "I suspect we will see the gradual demise of the Housing Corporation. The review ought to concentrate on how the corporation makes a graceful exit from the stage," says Moran, who is a former housing chair of the Association of Metropolitan Authorities and a former housing association director.
Having said that, she is not convinced that the Audit Commission's "expansionist tendencies" should be gratified.
A new national regulating agency within the DETR, as in Scotland, is more likely, while funding should go to local authorities, she suggests.
"It makes infinitely more sense if you are talking about providing for the needs of the whole community that the funding role should be within local authorities," she says. "Certainly that's the view of the majority of the parliamentary Labour group."
Splitting the regulation and funding roles has never been favoured by lenders. And with £15 billion of private cash injected into the sector, you can understand why the government takes the banks seriously.
The Nationwide, Barclays and the Abbey National all report a good relationship with the corporation, and say the quango's strong record has ensured good borrowing rates. But they acknowledge that the power to withdraw funding as part of the regulatory process is diminishing in line with the approved development programme.
Abbey National head of social housing Rita Jobbins is open to a change: "Anything which improves the sustainability of housing has got to be a good thing." Nationwide structured finance controller Mark Hedges says diversification requires "more in depth monitoring". And Steve Amos, head of Barclays' housing association unit, adds that everybody has "felt the pressure" of the most recent round of large scale voluntary transfers.
Eamonn Boylan, director of housing at Manchester council and a member of the DETR's advisory group on the review, says there is a sense that they "should not fix something that isn't broken". But he says all the big metropolitan councils are now looking at stock transfer, and regulation will need to incorporate the local authorities involved.
National Housing Federation policy director Liz Potter says nothing short of transformation is good enough for the corporation. "If we were starting with a clean piece of paper we would not regulate like the Housing Corporation regulates," she says.
Complicated 'RSR' forms must go and the corporation must use Best Value to drive continuous improvement in the sector.
As far as the creation of a single regulator is concerned, Potter says the corporation is respected for its experience but the Audit Commission's inspectorate has "a fresh approach and a focus on people not paperwork". So a congenial merger seems more likely than a battle to the death.
The message is that the corporation is unlikely to disappear after the 2000 review - but watch out for 2005. Failing to adopt a new approach, and a failure by the government to provide the necessary resources, could result in some big mistakes, which will only hasten the inevitable.
Source
Housing Today
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