Getting it down Pat
She has one of the biggest jobs in housing, at one of the toughest times. Can Homes and Communities Agency boss Pat Ritchie deliver, wonders Caroline Thorpe.
Pat Ritchie needs a holiday. Just five days stand between her and a Balearic beach. Given who she is, right now that probably seems a longer space of time than the three-and-a-bit months since her last break.
It’s 10 months since Ms Ritchie got one of the biggest jobs in housing: boss of the Homes and Communities Agency. As if it wasn’t daunting enough to be replacing the much-admired Sir Bob Kerslake, who left to become the top civil servant at the Communities and Local Government department, her promotion from head of the HCA’s north east division means Ms Ritchie spends the working week in London, away from her Northumberland family home.
And then there’s what happened next. In the few short weeks between getting the job and officially starting in the role, the government took its axe to the agency in its spending review last autumn. Everyone knew it was coming, not least Ms Ritchie who had joined the national housing and regeneration organisation as north east director in 2008. But by her first day in the top job, the true scale of the cuts was clear.
Overnight, the chancellor had almost halved the HCA budget to £4.5 billion, jeopardising the jobs of a third of its workforce. He also abolished the funding programme for new affordable homes and replaced it with a far less generous investment model which heaped risk on housing providers.
‘In any new job you’re relishing the prospect, but you’re also thinking, “Am I going to be able to do this?”. It was a substantially bigger job than I was doing previously,’ Ms Ritchie admits. Bigger, in fact, than that done by Sir Bob - on top of everything else, in less than 18 months regulating the housing sector would be added to the agency’s to do list, following the closure of the Tenant Services Authority in April 2012. Quite some task for someone who has plotted a safe and steady route up the public sector regeneration career ladder.
But if she’s ready for her Majorcan break now, wait until she gets to the Christmas holidays. With austerity Britain here to stay, it seems unlikely the job will get easier any time soon. Ms Ritchie isn’t the only one asking if she’s up to the job. Has she really got what it takes to get, not only herself and her staff, but the whole housing sector through the challenges that lie ahead?
First and foremost, there’s the new £1.8 billion development programme, dubbed ‘the affordable rent framework’. Launched in February, it’s a slip of an initiative compared with the £8.4 billion national affordable homes programme, its 2008/11 forerunner, and opens up a potential development minefield.
Under the affordable rent framework, bidders must charge higher rents and borrow more to make up the shortfall in grant. By the time the boss’s fortnight in the sun is done, less than a month will remain before the first deals are due to be signed. It’s a tight window. And this less than two months after successful bidders discovered their allocations.
The programme has already drawn flak for, among other things, its haste. And it’s taken its toll on HCA staff. ‘To get an agreed programme, given the amount of change we’re going through as an organisation, was a huge amount of work for us,’ says Ms Ritchie, who says the, ‘day we announced the affordable rent programme was a pretty good day’.
Disappointing, then, to hear rumours that the HCA staff allocating funding were interested only in bids which required minimal grant? ‘I wouldn’t characterise it as “the big drive from HCA staff to get the grant rates down”,’ counters Ms Ritchie, looking genuinely surprised at this suggestion - one fuelled by housing minister Grant Shapps crowing that the programme would fund 170,000 homes, 20,000 more than the 150,000 originally trailed (www.insidehousing.co.uk, 14 July).
‘This isn’t an exact science. The 150,000 was what we thought we could do… based on the kind of offers we thought we might receive,’ she says, eyes seeking reassurance from a press officer sitting across the table in her small office. ‘It’s a credit to the sector that they’ve come up with stronger offers that, over a four-year period, will… exceed the delivery originally anticipated.’
She reserves special praise for England’s ‘innovative’ northern regions, which had initially complained the new funding regime favoured the south where higher market rents made the ‘affordable rent’ development model more viable. In any event her old stomping ground will get almost £370 million in grant, its share of the pot up more than 3 per cent on its 2008/11 allocation.
Explaining this success, Ms Ritchie says: ‘They’ve used their land differently in the north. They’ve used a balance of higher value areas and areas where the rents are lower.’ She adds there were more successful consortia bids in the north, often combining rural and urban providers; plus she says more land went in for nothing and providers were more likely to raid their reserves and convert social homes to affordable rents than southerners.
Regardless of locale, all 146 successful bidders (including 25 councils and six private house builders) are now frantically combing their contracts and running the deals by their boards. The sooner they get them signed, the sooner they can start building.
Providers say the terms and conditions are far more onerous than the old regime, but reckon Ms Ritchie is showing welcome leadership by suggesting the agency will be flexible if circumstances change during the programme’s lifetime.
‘She’s provided a degree of comfort set against concerns which a lot of providers have had about the rigidity of contracts, which are far tougher than anything seen before,’ says Phil Gandy, chief executive of successful bidder Symphony Housing Group, which has around 1,400 homes in its development pipeline.
He hopes to sign Symphony’s contract in September. Ms Ritchie wants all 146 done and dusted by the end of the year, adding she is ‘confident’ the full 170,000 homes will result. Quite how she can be is a mystery: until signed, each deal is subject to change. The boss refuses to ‘get into percentages’, saying, ‘they could change radically, they could change at the margins’.
Meanwhile, she has other things to worry about, including one of the toughest calls housing has seen for years. After pulling the funding for the previous government’s £2.3 billion housing market renewal programme, ministers set aside £30 million to help the most downtrodden of the neighbourhoods abandoned to their fate as a result.
‘You can’t replace the size of investment that was going into those areas. It’s about then looking at how, pragmatically, you can work to keep investment going,’ says Ms Ritchie, a former director of Newcastle’s market renewal project, which is not considered in bad enough shape to qualify for this money. The areas that are have oversubscribed the pot by £15 million, and it falls to the HCA to advise the government which parts of the midlands and north should get the cash.
Will every area get something - or will it be like the Olympics, where a lucky few got tickets and the majority ended up with nothing? ‘Let’s hope it will be a bit more systematic than the Olympic tickets; it will be a lot more open and clearer than that. You’re not going to apply for running and get beach volleyball,’ says Ms Ritchie. ‘I would expect there will be some investment in most communities.’
And then there’s the real biggie: regulation. The HCA has already abandoned its offices and moved across central London to the TSA’s building. In a couple of weeks, the pair will ditch individual reception desks as
1 April 2012 approaches. That’s the day the TSA will finally be abolished and the HCA will start policing the sector. ‘There will be a separate regulation board that will have its chair. The chair of [the] regulation [board] will be a member of the HCA board, so there will be a link between the two,’ explains Ms Ritchie.
The agency is currently recruiting the (up-to-£70,000-a-year) regulation board chair. Once that’s done, it will recruit a regulation director, who will report to Ms Ritchie. She wants someone who gets the sector, government and economic regulation, but won’t be drawn on whether they should already work in housing. ‘I’m very open - very open - to a range of applications,’ she emphasises.
She expects the director will be in place later this year, which would seem to rule out TSA boss Claer Lloyd-Jones because she’s committed to seeing the housing regulator through to the end. ‘Claer can decide what she wants to do, it’s up to her. I couldn’t comment on her career plans,’ says Ms Ritchie.
HCA hires are rare these days. In 2009, the body had almost 1,000 staff. It now has about 800, with another 160-odd still to go by the autumn. The chief executive says she admires her employees’ grit. ‘The same staff that have been delivering the affordable rent programme… have also been uncertain about their roles.’
What of the boss herself? Is the London/Northumberland split sustainable beyond next April? ‘It’s not [difficult] if you’re organised and you plan. I think it’s doable in the longer term,’ Ms Ritchie says, aware, no doubt, she has much to prove before then.
But even super-commuters need a break and Majorca is calling. ‘I can’t wait,’ she admits as she hurries off to the next meeting.
Pat Ritchie’s numbers …
size of pension pot
running the HCA
number of homes she is ‘confident’ her agency’s programme will deliver by 2015
46 per cent
cut in HCA budget
HCA staff who have left since 2009/10
HCA jobs still to go
… and her words
On the Inside Housing splash which revealed the HCA had written to providers asking them not to disclose details of their funding allocations
‘You mean the gagging story? If we can be very clear on this: the HCA has never sought to gag any providers. I would take issue at any thought that we would ever do that.’
On Tenant Services Authority managing director Claer Lloyd Jones
‘Claer’s been great to work with. I’ve really enjoyed and do enjoy that. Two women working together at that level is relatively unusual, although I think there are quite a lot of senior women in housing.’
On work/life balance
‘During the week I work in London and most of the time I’m based here… My family are still in the north east, in Northumberland, so I go back at weekends as a lot of people do. It’s actually worked out pretty well. My son is 20 and my daughter’s 17. They’ve kind of adjusted… My husband works part time and does a lot of the running the kids around.’