Suspicious minds

Most reasonable people, if greeted with news that charities had more money to spend on good causes, would see it as good news. It is certainly better news than a Kids Company-style financial collapse.

However, surpluses in the housing association sector are viewed with suspicion, partly due to a lack of understanding. Occasionally I have wondered whether some politicians imagine a growing pile of cash under a mattress. The reality is, of course, quite different - and the figures tell us that associations are taking on substantially more debt.

So we need a very clear message, and I think it’s this: without substantial surpluses, we wouldn’t be able to take on more debt, and this would mean a substantial reduction in new homes.

On one level it would be worrying if the sector’s surplus wasn’t increasing. In the very short-term, just about everything is in our favour. Interest rates are at historically low levels - a game-changer for debt-hungry businesses. And house prices are going up - very handy if you are increasingly building homes for sale.

History tells us that both of these factors can change, often quite rapidly. We also know that core business is just about to come under pressure owing to rent reductions and welfare changes.

The real issue for Paradigm is what level of surplus we can confidently predict in future. The higher the figure, the more we will build.

So I hope government turns its mind to how best it can support large and predictable surpluses. This really is a good news story, and one that needs to be repeated if we are going to tackle the housing crisis.

Matthew Bailes, chief executive, Paradigm Housing Group