Think tank raises threat of housing association privatisation
Policy Exchange raise threat of outright privatisation of Housing Associations
Privatising housing associations would be “the most obvious” government reaction to £60bn of debt being added to the national balance sheet, an influential think tank has suggested according to Inside Housing today.
Unite members in housing will want to be at the centre of a campaign to stop any plan to privatise the biggest providers of social housing in the UK at a time when we desperately need more social housing. The election of Jeremy Corbyn as Labour leader should put an expansion of social housing on the agenda – not handing it over to fat cats.
Chris Walker, head of housing and planning at ‘Policy Exchange’, said nationalisation of housing associations followed by a state sell-off into the private sector could become “a serious option” if the Office for National Statistics (ONS) decides to reclassify housing associations as public bodies. Commentators belive this is increasingly likely.
In the past a key argument for developing social housing through housing associations has been that as independent bodies their debt would not count as public borrowing. But government polices and public statements now undermine this position and the ONS have confirmed that they are reviewing the status of housing associations. Policies such as forcing associations to sell housing to tenants are taken to suggest that they are not independent organisations. Cameron referred to associations as part of the public sector at the last Prime Minister Questions – something ministers have in the past been careful to avoid.
‘Policy Exchange’ is one of the most influential think tanks in Tory circles and developed several housing policies which have been adopted by government including the sell-off of high-value council homes. Its former head of housing, Alex Morton, now works on housing policy for Number 10.
We reported on the threat posed by their report last year advocating the privatisation of housing associations here. It is notable that this report was actually sponsored by Genesis housing association and the Chief Executives of other associations contributed on Chatham House terms, in other words secretly. The boss of Genesis has subsequently announced his intention to pull out of social housing resulting in the resignation of a manager and other associations are considering similar steps.
The spread of RIETS (Real Estate Investment Trusts) across Europe was recently described by the Financial Times as rocking the foundations of social housing. They report, for example, on the drive to break up not for profit landlords and sell their assets in the Netherlands. This followed from a derivatives dealing scandal involving Vestia, the country’s biggest landlord. The Finacial Times notes “This offers a rare opportunity for private investors to build up portfolios quickly.”
Some associations will oppose outright privatisation and even those behind the original report may feel uncomfortable with recent developments – instead of handing over the stock to existing management nationalisation followed by outright privatisation seems likely to put the Tories friends in the City in the driving seat. We welcome support for social housing but a campaign to defend social housing will have to be based on the labour movement and tenants and residents organisations. As the biggest union for housing association workers Unite has a key role here.
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