Branch Secretary :

Stop Housing Association Privatisation

“Housing associations will be set free to roam as private companies. There is no doubt in my mind about this.... This is a juicy steak one millimetre away from a slavering dog’s mouth.  I am of course putting aside the morality.  But money is talking.  And the politicians will listen to it in the end. Privatisation is going to be a done deal.” So writes the well known housing consultant Alistair McIntosh commenting on a recent report from the think tank Policy Exchange, which has a track record of influencing Tory policy (24 6/1/2015).


The report is sponsored by G15 housing association Genesis and follows consultation with association bosses.  McIntosh observes “Some of our chiefs are really keen on privatisation”.  The idea might seem crazy but it has serious backing.   


Policy Exchange claim that a “byzantine system of regulatory rules and financial constraints is preventing housing associations from building 100,000 homes a year.  Policy Exchange suggest that housing investment of £1.1 billion per year is too high at a time of austerity.  Associations would buy out their debt at a 50% discount and proceed without grant.  They would then be free to sell properties without consent and to set their own rents, and they would be free to choose their tenants rather than taking people on the basis of need referred from Local Authorities.  This would be another massive privatisation of public assets at a knock down price.


Housing Association bosses have been known to look longingly at the multi-million pay packages of their private sector opposite numbers; could that influence their judgement?  McIntosh bluntly predicts a “battle royal” for front line staff to get a living wage, higher rents, more evictions and a worse service for tenants.  In opposing any such move Unite would be standing for both tenants and workers.  The Policy Exchange arguments can be answered point by point but sweet reason may not be enough.  Neoliberalism is a class strategy attacking working people in the interests of the fat cats.


It is clear that a result of this privatisation would be higher rents, putting more pressure on tenants and on the housing benefit bill of almost £25 billion annually.  The report actually accepts that social housing currently saves about £3 billion annually from the housing benefit bill.  The government has justified benefit caps with talk of feckless claimants but there has been a deliberate transfer of funding from ‘bricks and mortar’ subsidy of building to subsidising private landlords through the benefits system.  Housing Association privatisation would be further step in the wrong direction.


House building has fallen to its lowest level since the Second World War.  In 2012 Housing associations in England built 27,460 homes while last year they built just 21,770, and most of these were so-called “affordable” homes which get a much lower level of grant, have higher rents than social housing (for affordable read unaffordable) and therefore create a bigger burden on the housing benefit bill.  This wasn’t due to a sudden onset of regulation.  Associations have actually had less not more regulation in recent years.  The fall in house building had much more to do with the 60% cut in social housing investment introduced when ConDems came in to office in 2010!


Currently, Housing Associations have £45 billion of historic grant on their balance sheets and £52 billion of debt. Their stock is worth over £300 billion.  Policy Exchange proposes a 50% discount so £45 billion investment would be sold off for about £22.5 billion.  What impact would this have on associations and their tenants?  Associations would be £22.5 billion more in debt; this and the reduced assurance from regulation would put up borrowing costs.  The Council of Mortgages Lenders have repeatedly emphasised the importance of regulation by the HCA.  There would be nothing to stop associations squeezing tenants in response.  And as McIntosh suggests “Something is bound to go wrong. It always does. Then the good old taxpayer will rescue the company and we will be right back where we started.”


It is welcome that some senior figures in housing have spoken out against this idea: Tony Stacey, Chief Executive of ‘South Yorkshire Housing Association’ comments, “housing people in the north will scratch their heads wondering how on earth daft ideas such as this reach the light of day, but the fundamental issue here is not of geography but of being in touch with partners and communities. And the ability to pass your maths exams.” (Guardian 3/12/2014).   But at one time housing associations would have been making a unified case for more investment in social housing.


Unite must be prepared to fight outright privatisation of the social housing stock and take the opportunity to raise the need for more social housing as a key part a serious plan to tackle the housing crisis; we cannot rely on housing 'leaders'.  Housing is becoming a toxic issue for politicians; we can channel the developing anger to stop these plans and to make the case for an end to housing policy for the fat cats.


You can read the article in 24-dash here.

Comments :

I read this with growing disquiet but not too much surprise. I am a HA tenant, often regarded as the lowest of the low, and when during a meeting of our Disability CAP (customer advisory panel) I asked why our HA was now calling itself a private provider of social housing when it couldn't be a private landlord, I was told very firmly that that was how it was and that was how it was going to be. This has big implications for staff of course, as well as tenants, and I am so pleased you have published this.

By Janice Hansford on 2015-01-14 10:27:23


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