Party poopers

There’s nothing more miserable than a party where no-one turns up. Months of pre-paration, glitzy invites and promises of a star-studded guest list and then on the night, with the champagne ready to pop, you find you’re hosting one man and his dog.

That might be how the Tenant Services Authority is feeling today as its new regulatory regime launches.

Back in July 2008, the Housing and Regeneration Act issued an invitation to anyone interested in becoming a provider of social housing.

From 1 April 2010, profit-making providers such as private companies could register with the TSA.

Richard Capie, director of policy at the Chartered Institute of Housing, said one of the anticipated advantages of allowing private companies to register had been that ‘that it would open up the market and encourage more competition which would drive up standards and choice for tenants’.

Suddenly the sector was awash with speculation about who would come to the party. Rumours abounded about big commercial companies like supermarkets holding talks with the regulator. So who are the new players most likely to register with the TSA and why have they not been flocking to the door?

Emma Tarran, partner in the governance and charities team at legal firm Trowers & Hamlins, says the firm has identified three groups who might be interested in registering to manage social housing. They are house builders, non-housing charities that want to provide specialist housing for their service users, and housing associations that may with to add a profit-making arm to their business to enable greater flexibility.

As exciting as this opportunity to reshape the sector sounds, Inside Housing has only found three organisations prepared to say they are seriously interested in registering, and even they don’t have plans to officially apply to the regulator for a couple more months at least. What’s more, these companies — Residential Management Group, Orchard and Shipman and Pinnacle Regeneration Group — represent the usual suspects which would inevitably register with the TSA, given their extensive involvement in providing public sector services.

This week Pinnacle held discussions with the TSA about formally registering. It previously registered with the TSA’s predecessor, the Housing Corporation, as an accredited social housing manager, and managing director Neil Euesden says approaching the TSA was a logical step.

Pinnacle also believes it can help reshape the sector as a private provider. ‘We believe that opening the sector to real competition with clarity on costs and performance will achieve immediate and lasting improvements for all residents,’ says Mr Euesden.

‘Furthermore, it would encourage the very good housing associations and arms length management organisations, of which there are many, to improve still further.’

So if this is such a radical opportunity to change the sector and benefit from grant funding from the Homes and Communities Agency, where are all the other guests? The house builders aren’t interested and even some housing associations don’t plan to register their profit-making subsidiaries.

Bruce Moore, chief executive of Hanover, says: ‘At the moment, this isn’t a big priority for housing associations because of the economic climate.

There are other ways of doing work for profit without registering which are simpler.’ Ashley Lane, director of Westbury Partnerships, the affordable arm of house builder Persimmon, says: ‘This isn’t something we’re really looking into at the moment as we are too busy with other things.’

A spokesperson for Keepmoat says it might apply at some point in the distant future but its work in the private sector and working alongside existing social landlords is keeping it busy at the moment.

Excited rumours that supermarkets like Tesco might move into managing social housing have been flatly denied. There is no pack of new providers beating their way to the TSA’s door.

One reason the private sector is holding back is that the TSA’s future currently hangs in the balance. The Conservative Party finally admitted it would scrap the regulator if it came to power in the general election (Inside Housing, 19 March), and some companies are waiting to see whether registration would be worth the effort at all.

Killian Hurley, chief executive of London affordable housing developer Mount Anvil, says: ‘I would be very surprised if anyone was going to register because no one knows what is going to happen post-election.’

Consultancy firm Robinson Low Francis has been approached by a number of organisations interested in registering, but partner Mark Newberry says: ‘There seems to be a lot of uncertainty about what is going to happen after the election in terms of how much money is going to be available.’

In February, Inside Housing reported repairs and maintenance firm Morrison was considering moving into social housing management and registering with the TSA after the 1 April deadline. Back then, the firm said £1.53 billion in efficiency savings could come from private sector involvement in housing. But now the excitement seems to have dimmed, and a spokesperson would only say: ‘Morrison has no plans to register with the TSA at the moment, until we see what happens in the election.’

It isn’t just the Tories who are the party poopers, however. Alistair McIntosh, director of Housing Quality Network, says: ‘There will be no showing of hands from anyone on 1 April. This is because there is no market for private providers in the near future and for this to become a reality, the government and the TSA need to show a real commitment to reshaping the sector and handing over the management of failing providers to registered private companies, rather than operating on a business-as-usual basis.’

Rebecca Bennett-Casserly, partner and head of residential (affordable) at consultant EC Harris, adds: ‘There is currently confusion around the HCA and the TSA and a bit of a kickback on the kind of standards the providers would be expected to attain.’

Private companies may also need the time to reform their structures to accommodate a new arm which provides social housing, says John Bryant, policy leader at the National Housing Federation. And taking time to develop your business is unlikely to mean you will lose out, he adds.

‘HCA funding for next year is pretty thoroughly committed already,’ he says. ‘I doubt whether there is going to be much available for anyone who would register on 1 April anyway.’

Richard Moriarty, director of policy and market intelligence at the TSA, admits the economic climate may have dampened enthusiasm in the private sector. ‘That’s nothing to do with us or the government,’ he says. ‘Companies will have to make their own decisions, but a number of organisations have approached us for early discussions about this, so this tells me that there is some interest.’

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