State of play

One by one, the building blocks that form the foundations of social housing are being removed. Meanwhile, housing providers carry on aiming high - but like a game of Jenga, are they heading for a fall?

It started in May when the new coalition government slashed £230 million in Homes and Communities Agency funding. This was followed with a further cut of £220 million in July. Caps on housing benefits and local housing allowance were announced in the emergency Budget in June. Next, the National Tenant Voice, the organisation that gave tenants official input into national housing policy, was scrapped in July. Earlier this month, the Audit Commission was pushed out and the government hinted at plans to end secure tenancies. Housing’s regulator the Tenant Services Authority is still there - but it’s only just hanging on.

Inside Housing and Douglas Wood’s exclusive survey, completed by 83 UK housing professionals between June and July, shows that although chief executives, department heads, managers and officers are all concerned about budget cuts and reduced government grants, they are putting on a brave face and playing on.

Most of those who completed the survey, which covers everything from budget cuts, to job security, to the future of arm’s-length management organisations, say they believe their employer has what it takes to remain stable over the next few years - although they do admit current house building and repairs targets are unlikely to be met, that services might be cut and jobs will be lost.

Fifty nine per cent of those who completed the survey believe they’ll achieve their own personal strategic housing management or development goals over the next two years. On a scale of one to 10, with one being ‘not confident at all’ and 10 being ‘extremely confident’, they gave a score of six or above. Only 5 per cent, however, are brimming with personal optimism, marking nine or 10.

Nearly two thirds are positive their organisation will keep its balance during the challenging times ahead - they say their employer has the right delivery models to meet its regeneration, asset management and decent homes objectives.

Steve Douglas, a director at consultancy Douglas Wood, believes that some of these outward displays of optimism mask concerns. ‘If you dig a bit deeper, how much of that that is playing a game of bluff?’ he asks.

Nobody really knows what’s in store over the next couple of years, Mr Douglas warns. ‘I would say the sector should be confident, but it should be wary of false confidence.’

Budget cuts

Indeed, 70 per cent of respondents say they are worried about what’s going to happen to government subsidies. When presented with a rating scale of one to 10, one being ‘not at all serious’ and 10 being ‘extremely serious’, they gave a score of six or above. One in five say they are as concerned as they possibly could be, giving a maximum 10 out of 10. And nearly a quarter say they are extremely anxious about budget reductions within their organisations.

When it comes to whether or not their employer will be able to meet targets for building affordable housing over the next two years, nearly half of respondents are expecting the worst - they are sure their organisation will not be able to achieve its plans. Another 31 per cent, however, are refusing to be pessimistic, reporting that they can’t say for sure that everything’s going to be fine, but they’re not going to throw in the towel either.

One development manager, who works in the south east of England, for example, says he hopes his organisation’s cautious approach over recent years means it will be able to maintain a steady hand and continue to build homes using new development models. ‘Even if [government] grant goes down,’ he says, ‘we’re looking at remodelling all or our schemes so that we increase the level of low-cost homeownership. That cross subsidy will pay for social rented accommodation.’

Half of respondents are positive that their organisation’s decent homes programme will remain on course, but 18 per cent say that government cutbacks will mean they’ll be unable to meet their goals for bringing stock up to standard this year.

A similarly mixed picture emerges from survey questions asking where organisations will have to make cuts to services over the next two years. Twenty-two per cent of those who completed our questionnaire think cuts will be made to core services, including building new homes. ‘Social landlords are saying they don’t have a [development] programme for next year,’ sums up on respondent who works for a developer in Scotland.

Meanwhile, 38 per cent believe non-core areas of work, such as programmes to tackle worklessness and anti-social behaviour, will be scaled back, and 11 per cent think some services will be closed down altogether.

Forty-three per cent of respondents - nearly a third of whom are either chief executives or department heads - assert that core services will not be cut. Nearly half argue that all services will continue in some way, shape or form.

Jobs

A report by the Guardian newspaper, published after the coalition government’s emergency Budget announcement in June, said that the officials in Westminster expect up to 600,000 public sector jobs and 700,000 private sector jobs to go by 2015. Job security is, as expected, a big concern for social housing professionals at the moment - 73 per cent of those who completed our survey believe their organisation will either definitely or maybe have to cut jobs.

‘The current austere conditions are seriously impacting on all fronts and morale among all staff is at a serious low at the moment, especially after the downsizing of departments with staff feeling uncertain about their jobs or where they are being asked to accept a lower salary if they want to remain employed,’ sums up one respondent.

Research published in July by online recruitment company Totaljobs.com, indicates that a quarter of public sector workers would take a pay cut if it meant keeping their jobs, but only just over a quarter of those who completed our survey - one in five of whom work for local autorities - expected their organisation to reduce employees’ pay.

Forty-three per cent, meanwhile, are concerned that their organisation does not have enough staff members with the right skills to help steer it through unstable times. On a scale of one to 10, 10 per cent of respondents gave the highest score, answering that a shortage of staff with the right skills is an ‘extremely serious issue’ for their employer.

‘As managers have left, they’re not being replaced and voluntary redundancies are taking place,’ says one respondent.

On top of this, organisations are planning to get less external help from agency workers, interim managers and consultants than they did last year, with 72 per cent answering that they will bring fewer people in.

‘Some worries are coming through about whether they’ve got the right people with the right skills,’ states Mr Douglas. ‘Managers need to really ask themselves, do they have the right people with the right skill set to manage the significant challenge over the next couple of years?’

When asked where they would ‘seek advice on the best delivery models to meet their organisation’s objectives’, 47 per cent of those who completed our survey answered that they would look to expertise within their own organisation, while 42 per cent say they’d seek short term or interim external advice.

Mr Douglas thinks landlords are most likely to need outside consultants to help work through inspection and regulation now that its inspector the Audit Commission has been scrapped, and it looks as though its regulator, the TSA, is likely to follow.

‘We need to make sure that service managers are robustly challenging all of their development assumptions, that they’re properly testing how they do regulation and self audit in the absence of a new set of rules,’ he says, pointing out that our survey reveals that housing professionals are concerned about meeting regulatory requirements.

Regulation and inspection

Respondents were asked whether or not they thought meeting deadlines for the TSA’s new regulatory regime - which requires landlords to publish a report detailing how they are going to meet its six national standards by and outline their plans for local offers by 1 October this year - was a serious issue for their organisation. On a scale of one to 10, one being ‘not at all serious’ and 10 being ‘extremely serious’, 31 per cent gave a score of six or above.

A quarter of those who completed our survey, meanwhile, believe their organisation will definitely not be able, or may not be able, to meet the regulatory requirements laid out in the TSA’s framework, which came into force in April.

The same number of respondents is concerned that their organisation will not be able to provide rigorous governance for board members and chief executives.

When it comes to inspection, more than a third of those who completed our survey may have felt a small sense of relief at the news that the government had abolished the Audit Commission last month - they are concerned about their organisation’s readiness for a visit from inspectors.

Local authorities

Those respondents who work for a local authority with retained housing stock were asked what they thought the next five years had in store. Fifty-six per cent say that stock will remain with the council, with the exception of minor disposals. Only six per cent think there will be a whole stock transfer and 38 per cent expect a partial stock transfer.

Those who work for a council with an ALMO were asked about its future over the next three to five years, and nearly half say they believe their management organisation will be brought back in-house. Thirty-six per cent, meanwhile, say that their management organisation’s services will be outsourced and the remaining 18 per cent believe it will continue running as it is now.

Overall, it seems that despite some very serious concerns about the removal of some of social housing’s fundamental building blocks, most respondents are positive their organisation will meet its objectives over the next few tricky years.

‘We will not alter our business plans for the future,’ sums up one steadfast managing director. On the whole, social housing professionals don’t expect things to come crashing down.

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