Election panel: readers say it is possible to deliver more for less

A marginal majority of our 80-strong readers’ election panel decided it was realistic to expect housing associations to deliver this.

Fifty-five per cent said ‘yes’, 42 per cent said ‘no’ and just 3 per cent could not decide either way and said ‘maybe’.

The election panel is made up of recruited readers who are giving their views on key policies in the run up to the general election on May 6.

Each week we ask a topical question and also which way they would vote if the election was tomorrow.

This week support for the Labour party nosedived, from 29 per cent in week two to 18 per cent. Support for the Tories also went down in week three, from 21 per cent in week two to 15 per cent. Although, backing for the Lib Dems stayed more or less static around 21 per cent.

The only rise was in the proportion of people saying they were undecided, going up to just over 30 per cent.

On the question of more for less, there were passionate arguments both ways with comments such as: ‘No, no, no, no. This has been going on for years but is getting more and more stupid. The constant reduction in grant is leading to many registered social landlords choosing not to develop new general needs housing on their existing land holdings.’

And, more positively: ‘Yes - there are other ways and means of funding new housing developments, it is just about thinking outside of the box to access new funding mechanisms.’

Other comments

HAs have been delivering housing with less grant for years so there is nothing new in this. What is more important, however, is housing associations getting in greater hock to banks and tying their assets, and ultimately the security of their tenants, to the vagaries of the market.

Yes – there are other ways and means of funding new housing developments, it is just about thinking outside of the box to access new funding mechanisms. The reduction in funding has been anticipated for a long time so it should come as no surprise to housing associations that this will be an expectation of the next government. Of course, new ways of funding can also bring increased risks so moving away from mainstream funding will depends on an association’s appetite for risk!

No – Brown mentions that any future Labour government would ‘take steps…including legislation - if required to guarantee housing associations status as independent rather than public bodies’. Ostensibly to protect borrowing. At a time of systemic change and lighter touch regulation across the sector, anything which may effectively lessen accountability would be most unwelcome to tenants and communities, particularly in areas where neighbourhood management by housing associations is considered woefully inadequate. They should ensure frontline services are excellent before considering any further efficiency savings and asset sales to help subsidise new build. More for less will never be acceptable to the majority of tenants who may find their already deprived neighbourhoods even more poorly managed than is currently the case.

Not to the extent proposed unless revenue grant is increased or public land is given at discounted/deferred rates

It is widely accepted that the question of grant rates and value for money differs on a regional basis across the country. If the HCA continue their aspiration to improve unit standards in terms of space, quality of finish and energy efficiency measures then they potentially put themselves at odds with these aspirations by reducing the amount of grant rates available on units. We have until 2016 to become carbon neutral on new developments but without the advanced technology required to make this happen we will probably need to build larger units just to accommodate all the plant and control panels for each unit. It is interesting to note that in the last month or so the HCA have quietly dropped the code 4 requirement as these units were proving to be too costly. Base line, we are either looking for quantity or quality and it would appear that HCA recognise we can’t have both so they are pursuing numbers.

Maybe – if everyone is having to look at the way in which they deliver things, then the housing sector also has a role to play in assessing alternative ways of property delivery.

No, no, no, no – This has been going on for years but is getting more and more stupid. The constant reduction in grant is leading to many social landlords choosing not to develop new general needs housing on their existing land holdings. Furthermore, in order to make general needs work where local authorities insist on it, social landlords are being forced to put in more outright sale or market rent properties to balance the books effectively, the constant squeezing of grant is reducing the amount of affordable housing provided to the bare minimum to comply with the local authority’s affordable housing policy. As most local authorities use the absurd ‘three dragons’ model to assess what level of affordable should be provided, this is often zero.

No – with less money available there will be less houses built or tenants services will be cut to make up the deficit. This will be more prominent in metropolitan areas that are more challenging and expensive to build new homes

No –  unclear what exactly Brown expects social landlords to do – receipts from sales have fallen dramatically, rental income is reduced due to the level of RPI and yet we are still expected to build more and more homes and to much higher standards than the private sector.  Another suggested area for making savings which could be used to increase building was efficiency in maintenance spending but this would be difficult to balance against the desire to offer a 3* service. Use of innovative building methods is all well and good but they are still generally more expensive than traditional methods!

At a time when funding is more difficult to source for many housing associations, it seems counterproductive to expect them to build more with less support from the government, especially at a time of increased housing demand

Yes – but this may mean that more expensive schemes, eg complex / brownfield sites are avoided, which may not be such a good thing. Plus, it may result in a need for rents to go up as associations’ income streams are required to pay for finance raised to fund developments – surely social landlords’ rents are supposed to be coming down?

In my opinion, it is still realistic to expect housing associations to deliver more homes with less grant. It could mean more partnerships with private developers and forsaking more units to private sale. However, the credit crunch has placed a heavy burden on housing associations securing the private funds. This could give rise to the smaller housing associations being forced to seek to merge with other larger associations

Yes – top slice the SMT cadre excessive remuneration packages to build more homes. Improve the poor governance of most housing associations

There is nothing new in this ‘request’ which is more like a ‘dictat’ from Gordon Brown for the sector to build more social housing with less government subsidy. For many years, the social housing grant has been reduced and social landlords have had to make up the shortfall through increased borrowing and so called efficiency savings. In the current economic climate, unless similar ‘dictats’ are issued to the banks to make more funds available to be borrowed and given the fact that I believe the sector is working as efficiently as it can at the moment, I find it difficult to see how more homes can be built with less resources.

It is realistic but other valuable services provided by the good associations may suffer. It will be a tough call but one hopes that they will be able to respond if the lenders are cooperative. Some rely on grant more than others. There is a limit to the amount of market rented properties that they can provide to cross subsidise. One feels sorry for special needs groups.The government’s laissez faire attitude towards cost control over 13 years is coming home to roost and they are expecting others to get them out of the mess. The good associations manage their assets efficiently already and provide vital ancillary services.

Possibly not – the funding is the biggest incentive that housing providers have to build more affordable housing, without this carrot, less developments could take place. I know that providing more housing ultimately leads to increased benefits to the provider in terms of rent, yet this is negligible compared to the cost of maintaining the properties to a decent standard that is constantly evolving. It will be interesting to see how the developing providers take to this idea and whether it will be workable. Of course, less funding could mean less stringent building specs which could mean more houses are built but to a reduced standard and this could affect service outcomes and tenant satisfaction.

It is realistic, but not necessarily something I’d like to see. The contraction of the capital markets took away the ability to raise private finance at acceptable rates, which is the only feasible way in which associations could build more with reduced grant funding.

Yes – building homes for less will compromise quality and standards. Short-term poor builds will be more costly in the long-term.

Yes – it is realistic for housing associations to deliver more homes for less grant.

Some social landlords will be able to provide housing with lower grant if their balance sheet allows but some will be unable to continue with their programmes and, therefore, unable to meet their aims and objective.s

I don’t think it is unrealistic to expect some efficiency savings. It would depend on how much is expected.

No – it may well be easy to find and describe particular incidents where some organisation was not as efficient as it might be in spending its money but the reality is that this is very marginal indeed. The reality is that you get what you pay for. If the proposal allows for smaller properties, more densely packed and built of cheaper materials, then you might increase the actual number built with a given budget. However, all you are doing is creating the slums of the future and the not very distant future at that.

Yes – but it isn’t going to happen, so housing associations will have a stark choice: do more with less, or……?  I think external stakeholders expect a higher risk investment environment as a consequence. This, in turn, raises questions about the effectiveness of governance and regulatory oversight in such an environment.

It is realistic to use the existing housing asset base and income streams to generate greater outputs. In fact, given the future public expenditure constraints, it is essential that the housing sector embrace this debate and make postive contributions to it.

No – it is not realistic to expect social landlords to build more homes for less money. Social landlords can raise standards of their current assets in partnership with tenants.

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