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October 27, 2010

Local solutions offer better value

The chronic shortage of affordable social housing is about to get more chronic as public budgets are squeezed ever more tightly. Last week LPL highlighted the new campaign of community controlled housing associations – Keep It Local – which emphasises the added value provided by locally run housing associations. Jim Harvey, Director of GWSF, produces an occasional blog to flesh out their case

Jim Harvey, Blog on website Fresh Thinking , New Ideas

A few months ago, I was asked to provide a comment for this website on the launch of Fresh Thinking, New Ideas.  The three big issues I highlighted then were affordability for tenants; sustainable funding systems; and tackling the root causes of inequality in our communities.

Like everyone else, I’ve now had time to read and reflect on the consultation document… so what’s the verdict?

On affordability, simple arithmetic means that less subsidy to build new houses will produce higher rents.  For many landlords, this will mean charging higher rents for new houses and higher rents for the rest of their housing stock, too, to make the figures add up.

Keeping rents affordable, while covering the costs of services and investment, has been one of the great successes of Scottish housing associations.  We need to preserve that. Letting rents and housing benefit take more of the strain in paying for new social housing is not the right policy for tenants or for the public finances.

Value for the public pound is understandably high on the Government’s priorities. What happens after this Housing Policy Discussion will shape the future of Housing Association Grant (HAG) in Scotland.  I have serious doubts about whether the current policy direction will allow housing associations to continue to build new houses in a way that is financially sustainable.

GWSF has recently set out a number of ideas for getting better value from HAG – but it’s also vital to recognise that the HAG system has underpinned the achievements of Scottish housing associations for more than 30 years.

Increasing tenants’ rents and landlords’ debt levels across the board are not sustainable ways of financing social housing.  After the collapse of the banks, the last thing we need is a housing policy that requires social landlords to take injudicious risks with their assets.  Those ‘assets’ are of course tenants’ homes.  Tenants are entitled to expect that their homes will be maintained to modern, energy-efficient standards and that this is not put at risk by short term thinking about how to finance new building.

As the Ministerial Foreword recognises, good quality housing helps bring about better educational and employment opportunities and a more prosperous and equal society.  But in our most disadvantaged communities, good quality housing by itself is not enough to achieve these things.

Achieving real change in the communities our members work in is about much more than housing.  It’s time for housing policy to recognise that community regeneration is an integral part of what many housing associations do – and that it’s something we could do more of, with the right support from central and local government.
Jim Harvey, Director Glasgow and West of Scotland Forum of Housing Associations