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Apron Strings

Thursday 25th March 2010 - a dull, wet day over most of the country with nothing very much to say for itself - you probably didn't even notice it come and go. But, a couple of really significant housing things happened on that day - things that represent the cutting of our apron strings in a pretty fundamental way from which I hope there will be no return.

The first was a breakfast event organised by the TSA to celebrate the production of its new Standards Framework document which comes into effect on 1 April 2010 in England. Throughout the development of this document Chief Executive Pete Marsh has stuck to his word and refused to issue good practice notes or briefings telling us how to achieve the outcomes that the new regulator expects. I've heard some people say "but how will we know what to do if you don't tell us", but I'm delighted with the current approach to co-regulation. Instead of being told how to do what by a national quango its now up to us to develop a 'local deal' with our customers - based on both their definition of excellence and our knowledge of good practice - how fantastic is that! The only possible downside is that this cutting of the apron strings puts the onus on us to be great but I'm confident we can deliver on our side of the bargain.

The second was the launch by John Healey of the long-awaited consultation paper on the reform of the HRA - the system for funding council housing. Almost no one understands the current system but the more important reason for reform is to give each local authority the flexibility to manage its own finances and to do so over a number of years. It has to be a key priority for whoever is our new Housing Minister to end the current central government control over and annualised approach to housing finance - an approach that stifles local authority action and innovation and makes it difficult for them to make the best use of their income. As with the TSA, the deal on our side is that we have to be up for the job of managing our finances in a new way.

So, a cutting of the apron strings that tie us in a paternalistic way to central government/agencies is great but let's not pretend the new world order will be easy. We are now the ones who have to deliver - whether it's on how to define excellence for our customers or how to use our finances to deliver more for less - the ball is well and truly back in our court. Let's not let ourselves down.

The Real Meaning of Our Profession

"Everyone stand up - and stay standing if you would describe yourself as a 'professional'". A room full of delegates at the ever-popular CIH South East conference obliged Michelle Reid from TPAS by standing up and remaining on their feet. "Now stay standing if you think the person next to you is a professional" - every single person stayed standing for Michelle. A fascinating - and encouraging - opening to the session on housing professionals for the 21st century which I've just chaired.

Having chosen housing as a career and entered the sector through the academic route, I found myself becoming increasingly uncomfortable with the term 'professional' as I learned my trade. Looking back this distancing was nothing to do with an on-going desire to learn but resulted from not liking the idea of joining an elite club that so many seemed excluded from. I've completely changed my mind since then and am now really proud to work for the professional body for the sector. But this change of heart is based on reclaiming the word 'professional' to apply to anyone who is committed to career-long learning and who aspires to be the very best they can be at their role - whether its as a housing officer, chief executive, tenant board member, housing journalist, estate caretaker, civil servant, funder... the list is endless because it's an intentionally inclusive club.

What I'm not interested in is a definition of 'professional' that seeks to exclude people - other than where they have no interest in learning and being the best they can be in their role. Richard Crossley from the NTV, talking in the same session as Michelle, reported back on the negative images of the term that he had gathered from NTC members - images that included 'aloofness', 'remoteness', 'using language to exclude' and 'making things over-complex'. Thankfully all three session speakers were also able to agree on some more positive phrases to underpin the concept - including: flexibility, transferable skills, listening, responding, respecting - and I would agree with them. They also agreed that tomorrow's professionals must place a greater emphasis on knowing their customers better and exceeding their needs.

As Sarah from the HCA said in her speech - a lack of skills is the greatest risk to non-delivery of the place-making vision for our homes and communities - so I'm 100 per cent committed to encouraging people to take qualifications - it's one of CIH's core activities and I'm delighted we have record numbers of students registered on courses with us. But, I'm equally committed to the professional body being the natural home for everyone in our sector who commits themselves to the endless business of learning and who shares the same definition of 'professional' - being the best you can be in your chosen role.

My Housing Hero

Last year our then President, Steve Benson, set up the Chartered Institute of Housing's "Housing Heroes" initiative - and, across the UK, housing professionals identified unsung individuals who had made a huge difference in our sector. As I listened to the stories told at the various events at which these individuals were acknowledged some common themes emerged. These people weren't household names, nor had the achieved one amazing thing - rather they were colleagues who had, over many years, supported, shaped and inspired others to be the best they could be.

My personal "Housing Hero" died recently. Anne Yanetta taught me and hundreds of other would-be housing professionals over the years on the Herriot Watt postgraduate housing course. She taught me how to do most of the "housing" things I've been practising for 20 years but she also taught me how to think and problem solve, how to work in teams, how to communicate effectively, how to achieve through influence rather than control - even how to network. She instilled in me - without me knowing it - a sense of injustice about homelessness and dreadful housing conditions, a drive for continuous learning and improvement and a desire to question and challenge. Anne's legacy is the hundreds of housing professionals currently helping to transform lives - and this particular one would like to say a huge thanks for my career.

Imagine

I chaired a session on innovation for the Guardian this week. To kick of the post-lunch graveyard slot I asked the audience of about 50 if they thought the housing sector could be characterised as being innovative? Guess how many people said 'yes'? 49? 41? The answer was two - well, more accurately one and a half! This was somewhat depressing - and, more than a little worrying, given the challenges we face over the next few months and years.

Having heard three examples of new approaches to age-old problems from the session speakers I put the delegates to work to consider why we view ourselves as being so..., well, unimaginative. The resultant list of barriers to innovation in our sector was long and detailed and the most significant, in no particular order, were:

- the short-term nature of political decision-making;
- the seemingly endless procession of Ministers taking responsibility for the housing portfolio;
- regulation;
- the lack of competition with few new entrants into our sector;
- a natural tendency to over-complicate ideas;
- conflicting priorities at national and regional levels;
- the lack of a government 'innovation fund';
- bureaucracy - "the dead hand of the civil service";
- the absence of a culture of innovation;
- the lack of visionary leadership on behalf of LA housing strategy functions; and
- the associated reputational risk - a fear that you will be 'shot down in flames'.

This last point is of particular interest to me. In the past CIH has been 'slammed' for considering whether there might, in some circumstances, be an alternative offer to a secure social tenancy for life, I have been wary of appearing too innovative. But CIH prides itself on blue skies policy thinking so I'll leave you with just a few of the 'imagine ifs ?.' that our policy team in England is currently working on - hoping at the very least to be able to engage in a genuine debate as part of our commitment to innovation. Imagine if...

- ALMOs could borrow private finance off balance sheet;
- if there was a national, government-backed equity-release scheme to enable vulnerable owners to bring their homes up to the Decent Homes Standard;
- if every tenant could chose a bespoke package of products and services - and pay a rent reflecting their choice;
- if every house could exist at any point along a continuum from 100% renting to 100% owning - with people able to move backwards and forwards along this continuum in a planned way as their circumstances change;
- if we taught our children about housing in school;
- if we automatically assessed your home if you ended up in hospital as a result of a fall at home or a cold/damp related illness;
- if we powered our domestic heating systems with hydrogen fuel cells (actually Black Country Housing Group already can already do this);
- if the general public asked our Housing Minister to increase capital gains tax and inheritance tax as a way of limiting future house price inflation; and
- if tabloid newspapers never wrote headlines like "council tenant runs off with daughter's boyfriend."

House Proud - A Pre-requisite for Electoral Success?

It's perhaps a little late in January for 'Happy New Years' but I'm prompted to wish this to everyone having just come back from Scotland where I had the pleasure of attending a celebratory dinner for the housing sector.

In the splendid surroundings of Mansfield Traquair in Edinburgh our guest speaker was SNP Minister Alex Neil - and, in addition to describing CIH as a 'wonderful organisation' he also outlined the invaluable links as he saw them between housing and health, housing and education and housing and social mobility. In so doing he was echoing the sentiments underpinning CIH's new campaign - launched at the start of the year in partnership with Inside Housing.

As we prepare for a Westminster election in May the House Proud - making the case for housing campaign is about two things. Firstly it celebrates the successes of our largely un-sung sector in transforming the lives of people like Mrs McGinty. And secondly it demonstrates that good housing is a necessary pre-requisite for healthy citizens, educational achievement, safe communities, our ability to tackle climate change, economic success and our success in responding to the challenges of an aging population.

Week by week CIH and Inside Housing will showcase the ways in which good housing is fundamental to the success of these other political policy priorities - taking our campaign to the media, politicians and the general public on their familiar territory - health, education and anti-social behaviour.

Please sign up in support of House Proud - whether as an individual or as part of an organisation - and be part of this sector-wide campaign to raise the profile of the life-changing work undertaken by housing professionals - we hope Alex Neil will feel able to.

Banking on another boom

Few organisations have the CIH's unique perspective of observing UK wide and international housing issues. In recent months the inter-relationship of housing markets has been highlighted with developments in Ireland.

The Republic of Ireland Government has now published details of its proposed resolution to the banking crisis. The plan is dramatic and exposes the tax payer to huge risk, and is described even by its advocates as 'the least-worst solution'. In announcing the establishment of the National Asset Management Agency (or NAMA), the Irish Finance Minister, Brian Lenihan will create a so-called 'bad bank'; capable of buying toxic development and land loans from Irish banks totalling €90 billion, thus freeing up institutions to lend to the 'real economy'. In effect, the Irish taxpayer will become a massive property and land owner; not just in Ireland, North and South, but in Britain and America where Irish investors pursued their interest during the boom.

The proposals follow months of speculation on the government's response to the banking crisis which has stripped international confidence in Irish institutions, and seen a dramatic reduction in credit made available to businesses and households across the country, thus stalling economic recovery. On the one hand the proposals represent a response to the mistakes of the past. Back then (just two years ago) Ireland's doomed love affair was with land and property; the portfolios of major banks were composed almost entirely of land and property loans. When the boom ended, the loans that had appeared secure, were now deeply risky.

However, the NAMA proposals also speak volumes about how Ireland sees its future, and the level of debt it is prepared to place on future generations.

Put bluntly, Ireland's economic future now rests on another land and development boom. The state will buy the loans not at current market value (which would represent a bargain), but at a price reflecting future values. In doing so, the Irish taxpayer is betting on an upturn in development and land prices.

Much debate will be had over the logic of buying toxic loans at above the current market value, and on the practical implications of this decision; who will make the valuation, and the criteria on which they will be based. It does appear nonsensical to apply an approach that would surely be dismissed by a commercial bank. If a bank bought an impaired loan, wouldn't it buy at the lowest possible price? But whichever way the loans are valued, to reduce the risk for the Irish taxpayer in the future, the state has to hope that the actual future value exceeds the price it paid for the loan- it will have to hope for a future development bubble.

Furthermore, this boom cannot simply be in Ireland; for the state to be free from risk, the Irish Government also need to hope for an upturn in Britain. We know the attraction of British property and land to the Irish investor during the Celtic Tiger; in the years between 2002 and 2006 the annual amount of Irish investment in the international commercial property markets surged fivefold from approximately €2 billion to over €10 billion. It is estimated at a quarter of the assets to be managed by NAMA are in Britain; over €20bn worth of land and development in Britain could end up in the ownership of the Irish state. The Irish taxpayer, suddenly, must become a passionate enthusiast for London Olympics; hoping that land and development assets in the area will enable it to recoup some of its investment. Are taxpayers really comfortable making the future economic health of the nation conditional on a property bubble in another country?

The Irish state has become a land and development agent at an industrial scale, and its future is now predicated on a boom. Fintan O'Toole put it well in the Irish Times; it turns Ireland into a 'nation of speculators'. I thought it was speculation that caused all the trouble in the first place. I am having a very strong sense of déjà vu.

Usually the least constructive approach in a crisis is to allocate blame after the event. But if we don't learn lessons from the past we risk making them all over again. It was the existing tax regime that made it so attractive for developers to over extend themselves, and the regulatory regime that allowed banks to accept interest only payments on huge loans for extended periods, enabling developers to keep buying. Government must ensure that future upturns are less volatile, even if it has a vested interest in them.

To its credit, the Irish government is taking determined action. It had to intervene to shore up the reputation of the nation's banks, and kick start lending, for the sake of the economy. And by introducing NAMA it cannot be accused of taking small measures. But there is no guarantee that NAMA will encourage international lenders to look favourably on Ireland once more, or that banks will use their new-look portfolios to lend again. The biggest calamity is that Ireland has pinned its hopes on a return to boom. In every other country in the EU the prevailing opinion is that volatility should be a thing of the past, yet Ireland appears to be rushing headlong into another land and development cycle, having learned nothing from our previous excesses. Is this really the best solution from the brightest and the best in government?

The sooner Irish policy makers realise that even we cannot always depend on luck, the better for everyone.