Housing expert Stewart Smyth argues that the current NI Housing Bill represents a re-privatisation of housing associations, with less control and regulation but the same amount of public money.
Devolution was supposed to allow local decision-making to fit local circumstances. Housing is one of those devolved responsibilities that has seen the Welsh and Scottish governments significantly diverge from Westminster. For example, in Wales and Scotland the controversial Right-to-Buy policy has been suspended, as the social need to protect the level of public housing stock is a priority.
In NI the experience has been the opposite with research showing that since the NI Executive was established there has been a growing convergence with housing policy emanating from Westminster. Dr Jenny Muir from Queen’s University Belfast quoted one interviewee in her research on housing policy formation in NI:
“the focus is to reduce expenditure and the English ‘solution’ is being touted as the way forward – no evidence, no analysis, just rhetoric.”
Now with Stormont re-established one of the first acts of the new Minister for Communities, Deirdre Hargey, is to rush towards more convergence with Westminster rules. I say rush because the Minister is using the accelerated procedures for passing the Housing Bill (2020), resulting in less time to scrutinise the proposed legislation.
(Why) Is the Bill needed?
On the face it, the Bill looks like a technical housekeeping job. Back in 2016, the Office for National Statistics decided that housing associations in NI were not private bodies because the Department for Communities has powers to intervene to protect tenants and the public funds invested.
The new bill is designed to reduce these powers – the department would not be able to intervene if there were suspected cases of fraud, theft or mis-management.
Why is this important? Well, housing associations receive considerable amounts of public money to build new social housing – since the mid-1990s the Housing Executive has been banned from accessing this funding and so has stopped building new homes.
Last year, the Department for Communities allocated £146 million to housing associations for this purpose.
The Housing Bill (2020) is designed to re-privatise housing associations, with the Department having less control (i.e they would be privately controlled, not publicly) but still giving housing associations the same amount (or more) of public money.
This seems a terrible deal for the public, so why is it being pursued?
Last month, Minister Hargey justified the Bill telling the Communities Committee:
“Housing associations match fund the capital grant from the Department through borrowing in the private sector. The current classification means that they would no longer able to do that and we would see the volume of social homes each year reduce by 50%.”
This sounds plausible in theory – in practice its hokum.
Policy failure
In 1996 when the policy to divert all the funding to housing associations was introduced, there were 2,400 new homes built, by the NIHE and housing associations combined. Since then the housing association sector has gotten nowhere near building a similar amount. The most built in any one year since was in 2012/13 with 1,450 homes.
Contrary to Minister Hargey’s claim, having housing associations as private bodies and only funding them to build new social housing has been a policy failure.
There are alternatives – the Minister could pursue an alternative policy, one that fits the circumstances of NI by keeping housing associations in the public sector and integrating them within the overall Housing Executive structure.
No other jurisdiction has a body like the Housing Executive that has the experience and history of being a world leader in social housing provision and community building – not my words but those of a PwC Report in 2011.
Those housing associations who want to return to being private bodies could do so – but only the basis that they would no longer receive public funding.
The Minister may present the Housing Bill as a technical matter but, in reality, it is an intensely political decision.
Considering the high levels of homelessness in the north, as well as how the pandemic has further intensified the financial pressures on people, it speaks volumes that Stormont intends to follow Westminster and preside over a re-privatisation of this vital public service.
People have a need for decent social housing, and it is obvious that the market has long failed to satisfy that need. The example of the current NI Housing Bill is but another in a long list which makes clear that none of big parties in Stormont are willing to break from this disastrous private model. Only a mass movement can force a long-overdue change.
