Conference news the National Housing Federations housing finance conference on March 16-18

24 Mar 05
Housing will face an extremely tough Spending Review in 2006 unless it gets into the habit of making year-on-year efficiency gains, Simon Ridley, head of housing at the Treasury, told the National Housing Federation's finance conference.

25 March 2005

Housing associations must make efficiency a habit, says Treasury

Housing will face an extremely tough Spending Review in 2006 unless it gets into the habit of making year-on-year efficiency gains, Simon Ridley, head of housing at the Treasury, told the National Housing Federation's finance conference.

He said last year's surprisingly generous settlement, worth 4.1% in real terms over three years, was possible only because the Treasury insisted on councils and housing associations saving £835m by 2007/08.

The 2006 review would be even tighter because ministers were committed to increased spending on health and education, he reminded delegates at the conference, which was held at the University of Warwick on March 16–18.

Speaking on the day that Chancellor Gordon Brown delivered his Budget speech, Ridley said the Treasury was keen to support housing investment but was seeking cost-effectiveness. 'The scope for growth will be even more limited,' he said. 'Housing is going to have to work hard to maintain the momentum that previous settlements have provided.'

But Ridley insisted the Treasury wanted savings, not cuts. 'We are talking about freeing-up resources to reinvest,' he said. 'We are talking about delivering even better outcomes for tenants and taxpayers from the finite resources that are available.'

Jim Coulter, delivering his last major speech as NHF chief executive, said there was very little difference between the spending plans of the major two parties, but he criticised Conservative plans to extend the right to buy to all housing association tenants and to abolish regional housing targets.

'It would be a disaster,' he said. 'No housing market totally respects local authority boundaries.'

A forthcoming NHF survey would show that the general public is less prejudiced against social housing than four years ago, but landlords still faced a struggle to make it a tenure of choice.

'We have to decide how we tackle the culture of consumerism in this country that is exemplified in the desire to own [property],' said Coulter.

RSLs will not have to buy homes from developers

Registered social landlords should not feel under pressure to buy homes built with public money by private developers, said a leading civil servant.

After years of 'knocking on the door' asking for social housing grant, it was up to developers to build quality homes that RSLs wished to manage, said Andrew Wells, director of sustainable communities at the Office of the Deputy Prime Minister.

The Housing Corporation has confirmed that developers and other non-RSLs can bid for grant in direct competition with housing associations from 2006/07. Although it would prefer associations to ultimately end up as landlords, it is keen to avoid developers setting up auctions.

An accreditation scheme that would allow non-RSLs to keep hold of properties was published earlier this month. 'We are not saying that you have to take the stock,' Wells told delegates. 'They have to do a commercial deal with you. Any concern that they're going to foist their stock on you is unfounded.'

Simon Ridley, head of housing at the Treasury, said the aim was to increase the supply of social housing. 'Hopefully, the private sector and RSLs will bring different things to the party,' he told delegates.

Peabody shapes up for 21st century

An external review of troubled housing association Peabody Trust has helped it to cut its operating costs by £5.5m, the conference heard.

The review, which followed a critical Audit Commission inspection, led to Peabody reducing empty properties, closing 30 local offices and introducing a call centre to handle repairs.

Steve Howlett, who took over as chief executive a year ago, said the trust had changed its culture after employing consultants CMI Partnership, and was now ready to move into the twenty-first century.

'The changes we are making are changing people's lives,' he told a fringe session at the conference. 'Nobody is objecting to them because it's helping to shape the future.'

Many of Peabody's 19,000 homes are on Victorian estates in London. Last year it was forced to cut back on new developments and focus on improving existing properties. It was told by the commission in early 2004 that it must improve its repairs service.

'We are going to meet the decent homes standard and provide better customer care,' said Howlett.

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