The art of radical thinking

We may be in the eye of a recession and producing the lowest output of new homes since before World War II, but at the National Housing Federation’s Leaders’ Conference two weeks ago, David Orr, chief executive of the NHF, sounded a rallying cry born of optimism and hope.

David was referring to the flexibility and creativity which has been the hallmark of housing associations and, arguably, has given the sector its edge, enabling it to become an £80 billion private finance success story.

At the same conference, however, there were storm clouds gathering. Andrew Neil, political broadcaster, was less hopeful and described housing as the ‘policy orphan’ of all parties. Dr Tim Leunig told us for the next 10 years housing is ‘stuffed’.

So what are our reasons to be cheerful, as David hopes? Well, we now have a golden opportunity to show our mettle and demonstrate why the government is right to place its trust in us. Picasso, who challenged conventions and loved making change happen, said: ‘Times of turbulence are the most exciting times because they provoke the best ideas and opportunities.’

That is what we now need by the shovel-load — new radical ideas, brave thinking and most importantly actions to differentiate ourselves;
We must drive efficiency to invest in new housing; think like commercial operators and turn our business model on its head, rationalise and simplify, set demanding efficiency targets for every manager, examine every pound spent, and trim waste in every corner of the organisation. Think the unthinkable.

We must change mind-sets and move from a subsidy mentality to co-investment, sharing the risk and rewards with co-investors putting in land, finance and new skills. Buy land at today’s depressed prices but offer shared ‘upside’ tomorrow.

The housing sector must make better use of land and property that we own, adopt a ‘portfolio’ approach and make the assets work harder, churn and sell to realise value for re-investment.

We must lobby hard the politicians and the banks that we part-own to keep funding new homes; every pound spent on construction generates double that amount elsewhere in the economy, it keeps people in work and it creates real long-term physical assets, unlike housing subsidy to private landlords with nothing long term to show for it.

Landlords must benchmark against the best in the industry — learn, copy and apply from role models out there.

There are big economic and financial uncertainties for housing associations — but the risk of doing nothing is even greater. Sharpen your thinking, be radical and, like Picasso, redraw the boundaries. But most importantly, do something and don’t wait for others to sort it out for you.

Mick Kent is chief executive of Bromford Housing Group