One year on...

Peter Marsh, chief executive of the Tenant Services Authority

What have been the highlights of your first year?

We were born at a moment when people were saying the housing association world was about to go bust, banks were about to stop lending, tenants’ homes were at risk. One year on and there is an unquestionably positive story. Not a single tenant’s home has been lost.

How bad was it looking?

Things could have been very different. There is absolutely no doubt about it. We talked about what would happen if a big one [housing association] went down. How would we rescue them, put them into a special purpose vehicle, how would we distribute their homes if the banks came in? The threat was absolutely real.

Many chief executives refer to the HCA and TSA bailing out housing associations last year. Did this happen?

The grant rate is going back up - you could look at this as bailing out associations that took on too much risk or [more] positively as keeping the supply chain moving.

I personally see it very much as an exercise in maintaining confidence and the supply chain.

What will happen next?

My bigger worry at the moment is that people assume that that level of capital investment will be continued or the sector perceives itself as being less healthy than it is.

I think there is a risk that the sector overplays its vulnerability and misses out on the chance to take centre stage.

That is why we will be publishing a paper in the spring on the sector’s ability to handle debt in the next period. It is a replay [of Unlocking the door - a controversial paper published by the Housing Corporation in 2007 that looked at how far associations could stretch their assets]. I think it is the regulatory responsibility and investors’ responsibility to create an environment where people can take more [prudent] risk.

What impact do you think the TSA has had?

Development, development, development was the mantra prior to December. Kate Davies [chief executive of Notting Hill Housing] came to one of our board dinners last week and her view was housing management has become the most important thing to talk about - and it hasn’t been for decades. We created the climate for that to happen.

Do you think the TSA will be around to celebrate a second birthday this time next year?

Whatever might be written in any manifesto and whatever the election result will be, I suspect that the mechanics of parliamentary decisions are such that we are are likely to still exist this time next year, love us or loathe us. It is an easier question to answer than year three or year four.

Rent policy has been the subject of heated debate this year [with rents due to fall by an average 0.9 per cent next year]. What do you make of it?

It is important that discussions around rents are based on fact and avoid the temptation to make easy points that can damage the reputation of the sector as one that is willing to take its share of the costs of delivery.

Any other big issues on the regulatory horizon next year?

Our approach to enforcement when a local authority can’t deliver [decent] homes because it hasn’t been given the funding by government.
It puts us as the regulator right in the middle of that political debate. We are [currently] working through how that might operate. It would be unreasonable for us to take a local authority to court for not delivering decent homes if the Housing Revenue Account mechanism doesn’t give it sufficient funding.

Sir Bob Kerslake, chief executive of the Homes and Communities Agency

Happy first birthday. What have the highlights of the year been for you?

One of the best things we ever did was to start [four months] early. It meant we could act quickly and flexibly in a way that I don’t think would have been open to the previous agencies.

Many people refer to the action you took - such as flexible grant rates and investing heavily in some associations - as bailing the sector out. Are they right?

I don’t see it that way at all. It was something for something. They kept developing, we reduced their exposure. We never got to the point where we were putting money into a housing association solely to keep it alive.

A number of housing associations feel that others were effectively rewarded for bad housekeeping. Do they have a point?

Had we just said ‘okay, we’ll treat everybody the same’ that would have been a completely misconceived response to the issue, it seems to me.

I think those who say that should think about what would have happened had a major social landlord gone under. It would have damaged all of them. We didn’t put money in solely to bail them out. In every case we put money in to move from sale to rent or get schemes going. We kept delivery going.

What would have happened if you had taken a different course of action?

I think we would have undershot on [delivery] targets. I think we would have seen some housing associations run into severe difficulties.
There would have been a risk of the government saying ‘if you can’t deliver the targets, why should we give you more [funding]?’. I think [the investment] followed from the early action.

What are the main challenges for your second year?

First, we have still got to see through and deliver all the housing stimulus package and the existing programme.

The second thing we have got to think about in the year ahead is recovery but also change. We want to look at whether there are new ways of bringing finance in or new players onto the pitch.

In terms of finance the private rented sector initiative has been the key thing we have worked on and at least one [new player] has gone public - Aviva.

Is this moving quickly enough? How much interest is there?

The medium-term market here is at least in the order of £5 billion. The short-term market will be smaller than that but I think there are opportunities to improve this over time.

Will the HCA exist in the same form by the time of its second birthday?

We are committed to reducing our operational costs by 5 per cent next year. One of the points that has been made has been about offices. We are looking to reduce the number.

The bigger point here I would say is our job here is to hold our nerve. We think we are an agency that has a lot to offer any government.

If you could write to the Sir Bob of a year ago, is there anything you would advise him to do differently?

There remain some very deprived places that haven’t finished the job.

We must see through the current programme on housing market renewal. For a number of those housing market renewal areas, even at the end of this comprehensive spending review, the job won’t be finished.

I think I underestimated just how much the downturn would impact on them. I would have been more vocal about the scale of that challenge.

Have you tackled NIMBY authorities effectively and what are the plans going forward?

In many areas the debate is more balanced than many people give it credit for.

A member [from a Conservative authority] said to me when he campaigned 20 years ago that the best way to get elected was to say ‘no housing’. He said that now people say ‘what about my kids?’.

What we’ve got to do is persuade people it is not just about more houses. It is about better communities as well.

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