Recent headlines have celebrated Stormont’s plan to shake up housing. Housing expert Stewart Smyth analyses the announcement and argues that worryingly, privatisation looms large.
There was a lot of fanfare recently when Minister for Communities, Carál Ní Chuilín (Sinn Féin), announced what she called the “most radical shake-up of public housing in decades”. This was a much anticipated and long overdue statement, and not just because housing policy has stalled since the Assembly’s collapse in 2017. We have for the first time a Sinn Féin minister with responsibility for housing, including the NI Housing Executive (NIHE).
The Minister’s statement contained attention grabbing headlines about calling time on bad landlords and rogue letting agents; improving safety, security and quality for those renting in the Private Rented sector, and increasing the supply of homes through co-ownership and intermediate rents.
Lots of ambition
However, it was the Minister’s announcement around social housing and the future of the NIHE that was the most eye-catching:
I will revitalise our Housing Executive …
We need to build more social homes. We need to sort out the long term future of the Housing Executive. We need to make sure it can repair its homes, regenerate its estates and start building again. We need to get the Housing Executive building again.
The statement was accompanied by an expected Sinn Féin social media campaign claiming:
Biggest public housing programme in decades. Delivering the lowest rents on the island. Calling time on bad landlords. Enable people to buy affordable homes. Stable and secure homes for all.
We all know that we need to bring a healthy scepticism to social media posts and that applies here as well – the NIHE already has the lowest rent levels in these islands and note the Minister did not commit to any target number of new build public homes in her statement.
However, the laudable aspirations for the NIHE expressed in the statement was light on detail about delivery. What is mentioned indicates that privatisation and private sector providers loom large in the Minister’s thinking.
Preferring the private sector
First, the NIHE currently has a statutory duty to provide accommodation for homeless people through a social housing tenancy. The Housing Rights organisation has highlighted the Minister proposes to extend this duty through offering a private rented sector tenancy. Yet, they state:
Housing Rights believes the private rented sector in Northern Ireland, as currently regulated, cannot provide a good quality, affordable and sustainable home for homeless families.
Second, the Minister indicated continued support for the Co-ownership scheme. This scheme allows people, who would not otherwise be able to buy a home via a full mortgage, to buy a part share (at least 50 per cent) in a property and receive a subsidised rent on the remainder.
In essence such co-ownership schemes represent a public subsidy to mortgage providers and private house-builders. Co-ownership schemes are only attractive because there is not a fully funded and vibrant social housing sector, providing secure tenancies.
As an indication of the Minister’s priorities, having made the radical and transformative policy statement at the start of the month, on 20 November she announced an expansion of the existing Co-ownership scheme, with an additional £145 million in public funding. A clear indication to maintaining the status quo, giving preferential treatment for private home ownership.
NIHE to the private sector
Worryingly though, it is not just preferring the owner-occupier sector and throwing homeless people to the vagaries of the private rented sector – the Minister also intends to privatise the NIHE. Of course, Carál Ní Chuilín does not state this so unambiguously and many people will no doubt be surprised.
However, the Minister intends to turn the NIHE into a housing mutual/co-operative model. The International Co-operative Alliance defines co-operatives/mutuals as
people centred enterprises owned, controlled and run by and for their members to realise their common economic, social, and cultural needs and aspirations.
This definition is broad enough to include grass-roots, community-led organisations that seek to provide for a social need (such a many small-scale social housing co-ops) and major businesses such as the Co-operative Group, providing food, financial, legal and insurance services.
How does this definition apply to what we know from the Minister’s appearance at Stormont:
- Mutuals and co-operatives are private sector entities. Often in a legal form of a private limited company by guarantee. Some may claim that as they not-for-profit organisation this does not represent privatisation. This claim misses the main point that once the housing is taken out of the public sector it become subject to business-style pressures;
- Also, according to the Office for National Statistics (ONS) rules mutuals and co-ops are private sector entities. These rules are the ones that Whitehall uses to calculate the level of government debt;
- the Minister clearly stated her intention to re-classify the NIHE, (according to ONS rules as a private sector entity);
- the Minister talked of allowing the NIHE access to Financial Transaction Capital – such finance is only available to private sector entities.
All these are indicators that the policy being pursued is privatisation.
It needs to be remembered that this idea to “reclassify” the NIHE out of the public sector was also announced by the then-minister Nelson McCausland (DUP) back in 2013. I doubt he came up with the idea himself, but as an arch free-marketeer he no doubt salivated at the prospect. The current Minister, belonging to a party which styles itself as left-wing, has no such excuse.
The NIHE is a concrete lasting reform of the NI civil rights movement from the late 1960s, and has an outstanding track-record improving the standard of homes and building communities. It is this legacy that is under threat with the minister’s announcement.
The establishing of housing mutuals, for former public housing, is often accompanied by a slew of propaganda around greater participation or even empowerment of staff and tenants. We saw some of what we can expect in the future, during the Minister’s statement.
The sight of MLAs getting up, one after another, uncritically praising the Minister for being radical and transformative, while also getting in a mention for their constituencies, was exasperating. There were very few who tried to actually scrutinise the announcements. The most notable exception was Gerry Carroll (People Before Profit) who raised the ongoing issue of letting agencies still charging tenants for fees.
The Minister’s statement and the subsequent behaviour of most MLAs was clearly co-ordinated to grab the attention and make positive headlines. In that respect it did what it was designed to do – with the whole affair being described as a “Stormont love-in”.
Privatisation in a fancy wrapper
In reality, the use of the mutual/co-operative model is a ploy by the Minister and the department, copying their counterparts across the water to pretend that they are not privatising the Housing Executive.
The actual track record of housing mutuals is clear – they do not stop any of privatisation’s negative impacts from occurring. Rents/charges increase, service levels decrease, tenants lose their accountability mechanisms as the finance providers exert their dominance, and senior managers reward themselves handsomely.
As housing researcher Stuart Hodkinson has observed,
Regardless of ‘empowerment’ rhetoric, these mutual models would be run as businesses dependent on open market borrowing, making tenant control (and housing need) ultimately subservient to debt viability and delegated ‘professional’ management decisions.
It has also led housing campaigners in Britain, where such reclassifications have a longer history, to describe the move of former public housing to a mutual model as “privatisation in fancy wrapper”.
It is not just a worsening service for tenant that reclassification will lead to; it will also stymie the Minister’s own ambitions to alleviate housing need in areas like North and West Belfast and Derry City. The Minister intends to re-introduce ring-fencing of funds to target development in those areas.
The problem is once the NIHE is reclassified the Minister will not have the power to instruct the new housing mutual/co-operative what to do with any funding. In other words, ring-fencing can only work if the NIHE remains a public sector entity.
Tenants Vote No
Fortunately, we are not completely dependent upon the political class – elected politicians and unelected officials – ordinary people can take matters into their own hands, as tenants and campaigners have done in recent years. As part of the McCausland plan, a pilot scheme of estate transfers from the NIHE to existing housing association was pursued. In 2017/18 the first two tenant votes took place on estates in Ballyclare and Ballymena. The results were an overwhelming rejection (90 per cent in Ballyclare) of transfer by the tenants.
These votes led to the department suspending the rest of the pilot scheme. Not only does this indicate how the new privatisation/transfer policy will be received by tenants, it also shows how we can force the Minister and political class to reverse the announced policy and keep the Housing Executive in public hands.
The battle to save the Housing Executive as a publicly funded and publicly accountable body has already taken years. We now face another attempt – this time from a Sinn Féin minister – to privatise this lasting legacy of the ’68 civil rights movement. But we also have the experience and inspiration, locally and across these islands, of tenant and trade union-led campaigns that have stopped housing privatisation. The fate of the NIHE is in our hands.
Stewart Smyth is author of a NIPSA research report, 21st Century Housing for Northern Ireland.