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NIHE faces ‘perfect storm’, warns chair
Northern Ireland’s housing authority is “close to a perfect storm” and is unable to raise funds to stop its huge stock deteriorating without a government in place at Stormont.
That is the assessment of the chair of the Northern Ireland Housing Executive (NIHE), Professor Peter Roberts.
The NIHE is one of the UK’s largest social landlords, with around 86,500 homes.
However, its rents have been frozen at around £66 a week since 2016 and it is unable to take on new borrowing – leaving it with a yearly funding shortfall of around £140m.
“What we are caught in now is a bit of a vice,” Professor Roberts told Inside Housing.
“We’re caught between the devil and the deep blue sea – the devil being our deteriorating stock and the deep blue sea being a rent freeze which means we can’t increase the rents to boost our income.
“We are in a position where some of our stock is not being maintained at the level we would like it to be maintained. It is pretty close to a perfect storm and we are having to make difficult decisions.”
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Last week, investigative website The Detail published a letter by Leo O’Reilly, permanent secretary of Northern Ireland’s Department for Communities, which revealed that the NIHE could need to start planning for “the longer-term decommissioning” of up to half its stock from early next year.
Unlike housing associations in Northern Ireland, the NIHE is also subject to corporation tax, paying the UK Treasury around £7m a year.
Professor Roberts said: “It is ridiculous. We are a social housing provider trying to do a good job in a difficult environment and we have got more than a hand tied behind our back, while our stock is deteriorating.”
The NIHE is also paying back historic loans to the UK government with above-market interest levels – in some cases more than 13%.
Professor Roberts said Westminster “was deaf to the situation” when the NIHE had raised questions about its corporation tax and outstanding loans in the past.
Asked if the NIHE is able to solve its funding problems without a Northern Ireland government in place, he said: “I don’t think in the absence of a Northern Ireland Assembly that we would be able to.
“We require new powers to borrow on the commercial markets and we require ministerial approval to raise the rents, and at the moment the Treasury doesn’t seem to be minded to stop charging us corporation tax.
“We are struggling, and we have been struggling for a year or so now, and I think we are going to have to make some difficult decisions soon.
“We are exploring every avenue we can but we are a bit stymied because of the political situation that we face.”
He added that the NIHE will look to demolish its hard-to-let tower blocks and replace them with low-rise housing which is cheaper to maintain.
He also said that an alternative to proposals to reform the NIHE into a private body like a housing association may be to reform it as a co-operative – which tenants own – long the lines of Rochdale Boroughwide Homes.
He said: “The option I favour, which would avoid the privatisation argument, is some sort of regional arrangement similar to the Rochdale mutual model.”
