The first 100 days of the HCA
‘Yes, they can,’ seems to be the overwhelming verdict on the agency’s first 100 days - not that it’s been a cakewalk exactly. Simon Brandon reports.
A new administration gains power. Taking control at a time of unprecedented crisis, its commander-in-chief carries the hopes of millions on his shoulders.
Expectations ran high before the inauguration - but now the new incumbent has had time to get his feet under the table, it’s time to ask whether those hopes have been met.
Homes and Communities Agency chief executive Sir Bob Kerslake (pictured) has been in charge of housing delivery and regeneration in England for 100 days. He heads around 1,000 staff in 21 offices spread across nine regions. The agency was originally due to begin operating next month but launched exactly four months early on 1 December, with a three-year budget of £17.3 billion - slap in the middle of a financial meltdown that has brought house building to its knees.
At a more recent inauguration across the Atlantic, President Obama confessed himself ‘humbled by the task before us’. Sir Bob was similarly never in any doubt about what the HCA was facing. ‘Now more than ever we need an integrated approach to housing and regeneration in this country,’ he said at its launch. ‘We are ready to tackle this challenge and will support our public and private sector partners through these difficult times.’
The first 100 days of the HCA era have seen those early promises and assertions severely tested. But it would seem that Sir Bob and his staff have so far satisfied the expectations vested in them.
Negative opinions of the HCA’s performance to-date are hard to come by.
Martin Wheatley, programme director in charge of development at the Local Government Association, is especially fulsome. The HCA had made an ‘overwhelmingly, very, very positive impression, particularly given that the agency came into being at such a difficult time’, he says.
Mr Wheatley is not alone in praising the fledgling agency. ‘The general view is that the HCA has hit the ground running,’ says London & Quadrant’s chief executive David Montague. Meanwhile National Housing Federation boss David Orr praised the HCA for an ‘excellent start, with Sir Bob Kerslake leading tirelessly from the front’.
It’s not just the launch in tricky conditions that has won the sector’s admiration. The HCA was formed from three bodies - English Partnerships, the development arm of the Housing Corporation and parts of the Communities and Local Government department - with inevitable cultural and organisational upheaval. ‘For an organisation undergoing a seismic change, it is doing pretty well,’ says Matthew Harrison, deputy chief executive at Great Places Housing.
The first 100 days haven’t passed entirely without incident, however. The first hiccup came earlier this month. Boris Johnson, London mayor and chair of the HCA’s London board, announced £93 million of HCA investment to reinvigorate five major developments in the capital. The problem? The government hadn’t given it the go-ahead (Inside Housing, 6 March).
And some critics have suggested that the agency has not been as flexible as it could be.
These blips aside, Sir Bob et al look set to enjoy continued support for now. ‘There is a tremendous amount of goodwill behind the HCA at the moment,’ Mr Montague says. ‘Long may it last.’
The HCA as it happened
1 December 2008 : The new agency opens for business
On the HCA’s launch day, its chief executive declared war on the credit crunch. ‘Our response… will be investment-led and counter-cyclical in order to maintain a level of activity in house building and prepare the industry for the upturn,’ ex-Sheffield Council chief executive Sir Bob Kerslake announced.
Housing delivery, he added, would be based on a ‘single conversation’ - a flexible, region-based approach in which local councils would become the HCA’s major delivery partners.
‘They are being very clear that the new relationship is anchored in local government,’ says Richard Capie, director of policy and practice at the Chartered Institute of Housing. ‘A lot more regional autonomy is becoming apparent. Regional directors have more freedom I suspect than Housing Corporation directors did.’
The nine directors have been drawn from the HCA’s predecessors the Housing Corporation and English Partnerships, local authorities, regional development agencies and the private sector. The east of England’s director is Terry Fuller, previously Taylor Wimpey’s managing director of major projects and affordable housing.
According to the LGA’s Martin Wheatley the emphasis on regional directors is already apparent - and welcome.
‘There has been a different flavour than you can get with government departments - [the HCA regional directors] listen to people’s points seriously and reflect on them,’ he says. ‘But it’s only down the line when we will see whether this approach will result in delivery.’
1 December 2008 : The HCA sends an open letter to its development partners outlining the approach with which it hopes to breathe life back into house building
The letter reiterated the HCA’s self-proclaimed commitment to flexibility. ‘In working with our core development programme,’ it said, ‘the approach that we would like to take is to develop tailored programmes for individual housing associations and developers… as part of these discussions we will offer greater flexibility on grant rates for affordable housing.’
The news gave housing associations a second chance to get struggling developments off the ground. And according to L&Q boss David Montague, housing associations enjoy an ‘extremely healthy dialogue’ with the HCA, at a time when collective finances are ailing. ‘The HCA has done a deal with us - more cash for more development,’ he says. ‘The sector’s balance sheet has been recapitalised.’
The cross-subsidy model, where the shortfall in social housing grant is plugged by receipts from market and shared ownership sales, is predicated on a healthy housing market. The HCA and its fresh approach to grant have arrived just in time for those developing landlords for whom the plummeting housing market has begun to hurt, Mr Montague adds.
‘There will be fewer housing association failures as a direct consequence of the tailored programme,’ he predicts. ‘The HCA has had a big impact in a very short space of time.’
15 December 2008 : Announcement that £400 million is to be pumped into homebuy direct
It’s not just developing housing associations singing the HCA’s praises. Private house builders are equally positive - and if anyone needs some good news, it’s this lot.
‘It would be very difficult to find a reason to criticise [the HCA]. It’s been a very positive start,’ said Steve Turner, a spokesperson for the Home Builders’ Federation. ‘A fresh impetus has been created.’
He’s particularly effusive about homebuy direct, a shared-equity scheme administered by the HCA which should help developers shift unsold properties, now given a £400 million shot in the arm by housing minister Margaret Beckett.
‘We’ve had a number of meetings,’ he added. ‘Homebuy is going very well. We’ve been working with the HCA to get firms signed up, to get lenders lending. It’s a very positive scheme.’
The two bodies have made ‘considerable progress’ since the announcement, Mr Turner said, and the first sales are ‘imminent’.
That’s not the HBF’s only reason for cheer. The HCA’s early promises to pump-prime stalled developments by providing upfront investment to get them moving again have not been forgotten.
‘So far the HCA has shown a willingness to engage,’ Mr Turner said. ‘It’s only been 100 days and multimillion pound deals take time to put together, but the HCA has expressed its intent in working with [house builders] to get those deals in place.’
16 January 2009 : The National Housing Federation’s members are starting to feel positive about the HCA’s tailored approach, reports NHF assistant director Bob Wilson
Almost halfway through the first 100 days, the NHF gave the new agency its seal of approval. ‘We are beginning to get a feel from our members that the HCA is responding positively to the need to negotiate - on an individual basis - significantly changed grant rates,’ said Mr Wilson.
Today his boss, NHF chief executive David Orr, is more effusive - albeit with a caveat. Apparently not every developing housing association shares these warm feelings. ‘[Sir Bob] has championed the cause of increased flexibility, in order to ensure that we can keep on building through the credit crunch, and his efforts have been greatly appreciated by the housing association sector,’ Mr Orr said. ‘However, flexibility at ground level from the HCA is still patchy, varying significantly from place to place - not only on grant rate but also approach.’
3 to 5 March 2009 : The HCA’s London board, chaired by Boris Johnson, announces £93 million to kick-start five major developments across London, but the HCA’s London board is told to re-examine the deal by the CLG
Has there been a failure of communication between the regional HCA and central government? Ministers were evidently narked by Mr Johnson’s announcement.
According to Mr Montague of L&Q - one of the developing housing associations set to benefit from the London cash - a few teething problems are inevitable. ‘All we are seeing is the first time the new structure has been tested,’ he said. ‘These are the first large projects to go through the new approval process - there are bound to be some details to work out.’
Beyond : Once in a lieftime?
Given the government’s recent spending sprees, it seems unlikely that the HCA and its development and regeneration partners will benefit from such largesse again in the near future.
Its £17.3 billion budget could be the best opportunity the sector will have to solve the housing shortage.
The 4.5 million people waiting for social housing must hope that it does.
