At the end of last month, the Homes and Communities Agency launched its corporate plan. It was an important moment for me personally - providing the first opportunity to set out our stall for the next two full years of operation - and it signalled a big step forward.

But will our hard targets and the focus of our activity be perceived as positive, or merely grimly realistic in the face of current market conditions? Is it a case of the glass half empty or half full?

The bigger picture

For me, it is definitely half full. Last year, the sector helped us achieve our targets for new and affordable homes, which corresponded with the 70,000 figure laid out in the housing green paper. This year, despite the downturn, we will come very close to the green paper figure; and even the year after, when the target total leaps again, we will still achieve around 75 per cent of a challenging figure set at a time when the market was at its very highest peak.

Under the circumstances, that would be a tremendous achievement; not for the HCA, but for the sector and in particular the partners we rely on for delivery.

The appetite and capacity of our social landlord partners to develop - something which I was genuinely fearful for 12 months ago - remains.

Affordable housing is alive and well. That said, we must be clear that there is no room for complacency.

The market remains fragile and we face big challenges, not least in terms of funding. Capacity will still need to be nurtured and appetite will need to be stimulated.

It’s vitally important that we do this, as it would be disastrous if social landlords were to pull back from development at a time when public sector works can take the lead in meeting housing demand.

Of equal impact would be any withdrawal by social landlords from their community-based work or from their wider social responsibilities. I do not see that happening. There will be some concern about HCA grant rates in future years. When looked at in isolation, it is true that our affordable housing budget falls by about £800 million next year - however, there should be some reassurance in our continued commitment to flexible grant rates.

Even so, flexibility doesn’t necessarily mean higher rates. And there will need to be some interesting and challenging debates around, for example, the relationship between rents and investment, or over new sources of funding, new players on the pitch and new ways of working.

As I say, no room for complacency. But in terms of money allocated, for example, we are in a far better position for delivery now than we were at the same point in the programme last year. If you had asked me 12 months ago to take the numbers of much-needed new affordable homes that we are looking at now, I would have done so.

At the HCA, however, affordable housing is only one half of the equation. I have been at pains to stress that it is the size and breadth of our other programmes, where around half of our budget will be spent, through which we have an opportunity to really maximise our potential as a single agency.

Here I believe the plan presents a balanced picture. But let’s be frank, in some places it is less healthy. Our budget for regeneration, for example, is significantly reduced due to market conditions and a fall in land receipts, and our activity will largely focus on existing commitments. The market has moved on and we have to make the most of our new operating environment. We must be realistic about that.

But to place too much emphasis on a fall in regeneration funding, or indeed on accounting book writedowns - unrealised as opposed to actual losses - would be disproportionate.

It would also fail to fully appreciate how our programmes interlink and the regenerative power of national affordable housing programme funding, not to mention housing market renewal and private finance initiatives, between them bringing £2.4 billion to regeneration.

The way in which our programmes interlink is an indicator of how I want the HCA to operate. It is central to the flexibility I am seeking from the government, to streamline our myriad of funding streams and strengthen their impact through a more holistic approach. In other words making our programmes fit the place rather than the other way around: a national organisation that delivers locally.

Building momentum

And that, ultimately, is what we’re all about. I am confident the sector can testify to delivery on the ground - there are some cracking schemes out there. With a kick-start you get a sense of renewed momentum and with local councils building again, a sense of a new opportunity.

Certainly, the number of homes we build or the amount of land we clean up and reclaim will be the hard targets against which we will be judged. But I prefer to look to the outcomes. That is where I believe we will be best able to assess our impact and our added value as an agency - capturing the intangibles that make up the general health and well-being of communities.

My message to the sector, and one which I hope is conveyed through the corporate plan, is that we have had a tough year and there are real challenges ahead. But we have two years of high investment here, and the onus must be on us, together, to make the most of the opportunities.
If we perform, then the glass will be much more than just half full.

Sir Bob Kerslake is chief executive of the Homes and Communities Agency

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