What does the proposed deal on right to buy mean for social housing?
Housing Minister Greg Clarke has made housing associations an offer they can't refuse: they have to ‘voluntarily’ agree to ‘right to buy’ in exchange for which they escape the fate of nationalisation followed by privatisation. The deadline for this acquiescence is next Friday, just six working days from Clarke’s announcement. No time for consulting tenants and communities, and actually not enough time for boards to consider the full implications but indications are that they will accept the deal which was brokered by their trade body, the National Housing Federation.
The government gets an extension of right to buy without a battle in Parliament. It is not clear if other moves the housing associations have lobbied for such as freedom to choose their own rent will be granted.
But how did a Conservative government come to be threatening nationalisation? The immediate cause was the policy of extending ‘right to buy’ to officially independent organisations. This triggered a review of the status of housing associations and their debts. By Prime Minister’s Questions last week, Cameron was referring to associations as part of the public sector. That would mean that their outstanding debt of £60 billion would be added to the PSBR. The ‘most obvious’ solution according to the Policy Exchange think tank was to nationalise the housing association sector and then sell it off.
The National Housing Federation will claim this as a triumph because it preserves the independence of associations. But it is at the price of collaborating in dismantling social housing. What right do housing association boards have to agree to sell off assets accumulated over the years by public investment? Housing developments given permission by local authorities on the basis that they were socially balanced with an agreed percentage of social rent will be transformed; are associations going to consult on that?
It appears that housing association right to buy will be funded through the sale of local high value local authority homes, devastating council provision, but the National Housing Federation seems happy to sign up to this without protest. Even if compensation is paid to replace housing association homes sold, it is highly unlikely that the replacements will be the equivalent of social rent homes. Replacement is more likely to be part of the government’s ownership agenda or homes let at the misnamed ‘affordable rent’.
The role of associations in this change needs to be noted. Last year Genesis Housing sponsored a report calling for the creation of 'free' associations; effectively fully privatising and deregulating associations. The report was complied with the assistance of CEOs of other unnamed associations on Chatham House terms. This year Genesis announced they were pulling out of the development of social housing and reviewing the tenure of their existing stock - other associations have announced they are considering similar steps.
In the past groups such as the National Housing Federation were seen as defenders of social housing, but it’s hard to see how that is the case now. In place of the housing association ‘movement,’ there now needs to be a new housing movement comprised of civil society organisations like trade unions and tenants organisations, and any associations that decided to join the defence of social housing would be welcome too. It is clear that social housing will need to be fought for.