PM reveals Labour’s plan for a ‘new deal’ for housing if it wins the general election
Brown: build more for less
A future Labour government would launch a ‘new deal’ for housing that would mean more homes being delivered with less funding, the prime minister has announced.
Kicking off Labour’s general election campaign with an exclusive interview with Inside Housing this week, Gordon Brown says the new deal would require social landlords to be more efficient and expect them to make more use of their borrowing power to fund new developments.
‘We would like to see the sector use its assets and development capacities more efficiently,’ he said. ‘Through a combination of, for example: asset sales, better leveraging of balance sheets, greater efficiency in maintenance spending and innovative building methods, we believe there is significant scope to deliver more homes at lower grant rates.’
A source involved in discussions said the party believes housing associations could make savings of about 20 per cent by retendering management and maintenance contracts.
As part of the deal the government would take steps - including legislation if required - to guarantee housing associations’ status as independent rather than public bodies. This is something the sector has been campaigning for since a legal case cast the status into doubt last year. This would protect borrowing by ensuring debt remains off the public sector balance sheet.
Labour will publish a series of mini-manifestos in the run-up to the election. One will focus on housing, a key demand of Inside Housing’s House Proud campaign.
Mr Brown said the new deal’s initial phase was the proposed reform of the housing subsidy system, announced two weeks ago. Mr Brown will launch a review, chaired by the housing minister, to look at the plans if he is elected. He added that Labour would safeguard the future of the housing regulator the Tenant Services Authority. The Conservative Party has vowed to scrap it. Mr Brown said the TSA had an important role in maintaining lenders’ confidence.
Reacting to the plans, housing associations said they were happy to examine ways of improving efficiency, but that they had a duty to remain financially viable and protect their tenants.
Stuart Ropke, head of investment policy and strategy at the National Housing Federation, said individual boards would have to weigh up whether or not they could push their balance sheet capacity any further without damaging their businesses.
‘Good housing associations are always looking at ways to increase efficiency,’ he said. ‘But the real way to ensure the housing crisis is tackled is to ring-fence the housing budget.’
Dave Jepson, deputy chief executive of 50,000-home Merseyside-based Riverside, said he was pleased Mr Brown had acknowledged associations’ important role in delivering new homes. He added: ‘We are sure that we can achieve more by continuing to work closely with local authorities.’
Richard Capie, director of policy at the Chartered Institute of Housing, said: ‘It is very clear that housing providers need to demonstrate what they can bring to the table. There are going to be some tough questions around efficiency and account balance sheet capacity.’
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Readers' comments (17)
Simon Stokes | 09/04/2010 8:35 am
This is pretty much a non article as Labour are going to lose the election anyway! But I applaud the idea, its high time all social housing was put on a business footing with associations having real consequences for failure anf hopefull all Councils being forced to become housing associations so they can get away from all the politics in local authorities and the old school working practices and contracts that are holding them back. We need to move forward with social housing, not back to the bad old days and introduce real choice and service and value for money.
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Jendali | 09/04/2010 8:47 am
More for less!!!In your dreams Gordon. (Gordon Brown..more like Gordon Bennett)
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DavidJ | 09/04/2010 10:48 am
This is fine in it's context, however when RSLs have capped rents, reduced grant, and increased building costs with ECO Homes standards increasing then something has to give. Capped rents can only raise a certain amount of capital to provide new build, so where does the missing funding come from?
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Len White | 09/04/2010 11:48 am
Every study has shown that housing associations have more capacity to borrow and build. A few have probably tried to do too much while others have been highly risk-averse and have failed to meet their development potential. It's not good enough for NHF to defend them all, some have been very poor indeed even though some others have done very well.
So Gordon Brown is right on this and the sector should listen, become rather less self-important and realise that it only has a valuable role if it delivers on new homes and tenants' services.
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Sancho | 09/04/2010 12:04 pm
If we knew how to build more for less, we would.
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Les | 09/04/2010 12:30 pm
Short memories? I seem to recall that quite a few RSL's recently had some problems in financing existing borrowing due to the credit crunch so taking on a huge amount of further debt hardly seems the sensible approach. For 'retendering management and maintances costs', I think this should read 'shedding jobs and slashing salaries'. Maybe a more efficient way of cutting costs would be to slash the numbers of targets and performance indicators, get rid of the bean counters who provide this meaningless information, and cut the number of regulatory staff. That way we could actually get back to providing the services that people desperately want at a reasonable cost. Guess I'm just a dreamer!
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Housing Professional | 09/04/2010 12:51 pm
Big is beautiful was the policy rolled out by the Housing corporation but now the TSA seem to be saying that Local is best. Make your minds up. Good and bad in everything in life including RSL's. All associations with capacity should be able to develop and helped to do this. Development is not rocket science if you know what you are doing and is straght forward.
The developing RSL's should also remember they are dealing with Tenants money and not spend it all on their developer pals in winning new business!
Lots of savings can be made so lets's start with director's salaries and perks! Tenant's first not CEO's and Directors. Just for info the NHF is run by CEO's.
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the purple avenger | 09/04/2010 1:45 pm
Oh dear. This has shades of gershon and the AES - and we all know that was a big accountancy fiddle. I am sure there are some efficiecies to be mde everywhere - but all of the parties are hanging all their policies on delivery of all of these savings - and the implication seems to be that public sector staff are wasteful - and that is simply not the case. What is wasteful is the administrative burden applied by Government and quangos - so that would be a good place to start.
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Housing Professional | 09/04/2010 3:43 pm
quango's should be abolished as they waste everybodies time and never avert the disasters and take action when the horse has bolted so if we get rid of the TSA, HCA and the DCLG. How much would all that start to save?
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Ged Quayle | 09/04/2010 3:57 pm
Gordo's being far too cautious - he can say what he likes, it's not as if he has a cat in hell's chance of having to deliver. Free houses for everyone! Covered in jam. If you're going down to the worst election defeat in recent history you might as well relax and have fun with it.
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