Challenges facing the social housing sector

In this interview, CT Partner, Greg Campbell speaks to NewStart about the challenges facing the social housing industry, from funding decarbonisation to meeting rising affordable housing demand.


By Chloe Coules, Head of Content, NewStart

As we emerge from the Covid-19 pandemic, the social housing sector has found itself facing a range of challenges – both new and old.

Campbell Tickell launched a group chat for social housing providers to communicate and collaborate through the lockdowns, but as things have returned to relative normality the group has evolved to provide support for new issues, including the impact of rising inflation and interest rates, that may worsen as the Ukraine-Russia crisis unfolds, and how social housing providers can help house and support refugees from ongoing conflicts.

Greg Campbell, Strategic Management Consultant and Partner at Campbell Tickell, tells NewStart: ‘It’s not specific to housing any more than any other sector, but there are all kinds of ramifications around the overall state of the economy and whether we might see more of a squeeze on departmental budgets in Whitehall, which has implications in terms of housing association development for example.’

However, Greg reports that one topic stands out and continues to dominate the minds of social housing providers.

‘The biggest issue for housing associations and local authority housing departments has been the same for the last few months and it is not going anywhere anytime soon: the trade-off between the costs of decarbonisation, which have been estimated at £3.5bn a year across the whole of UK social housing through to 2050 to get to net zero.’

He explains: ‘As best I can judge, it is only a minority of organisations that have really geared up their preparations, financial and otherwise, to address [decarbonisation]. The danger is that the shift is crushed into an even tighter timescale, which is going to cause all sorts of other problems.’

In the wake of the Grenfell tragedy, the social housing market is also having to tackle new requirements around building safety and fire safety, with the Fire Safety Act and upcoming Building Safety Bill set to change legislation around safety.

On top of these challenges, the industry is facing increasing pressure to pick up the pace of its housing delivery to meet the growing need for affordable housing.

‘There’s a huge bucket of stuff there around existing properties and existing tenancies, and on the other side there is the continuing demand of the housing crisis. We need a lot more homes that are truly affordable – we need more social housing. And with all these major cost pressures and demands over the decades to come, how can housing associations or indeed local authorities actually meet the cost of developing the new homes that we need?’

Finding solutions

One of the biggest barriers to tackling these challenges is funding. Greg Campbell explains that it is a difficult time in terms of securing government funding for housing projects, with the costs of Covid-19 affecting budgets as well as unfolding financial pressures like the Ukraine crisis.

He says that more and more social housing providers are looking to the private sector for funding: ‘A lot of people are looking to the commercial sector. The regulator has talked more than once about there being a “wall of money” out there.’

While some people are wary about taking or accessing that money, Greg argues that it is ‘understandable’ that housing providers will turn to it if all else fails.

However, he argues that social housing providers should aim to establish a sustainable relationship with the private sector, being careful to select responsible entities to work with and avoid companies looking for immediate financial gain.

‘Commercial investment can help quite significantly, but the terms on which it is obtained are critical.’

Greg Campbell also notes that upcoming changes to the powers of the Regulator of Social Housing should be positive for the industry.

‘From my point of view, it is something that is very welcome. It has been a big missing gap in terms of the powers that the Regulator has had and what they can look at since the Localism Act 2011, which essentially moved them away from anything to do with consumer standards and the way that housing management and property maintenance services were delivered.’

He expects that the regulatory changes will not see the sector return to an inspection regime that is prescriptive, but in line with existing standards it will continue to be outcome-focused, although some form of inspections will be reintroduced: ‘It will be a lot more sophisticated than it was before and it will change people’s behaviour.’

‘The reality is that inspection did have some very positive benefits because what it highlighted in a number of organisations was really unacceptable performance by their social landlords, in terms of the state of the properties, the way that services were delivered, and the way that residents were engaged with. There were some real horror stories out there that only an inspection brought to light, and as far as other organisations were concerned, it was a major incentive for them to take a look at what they were doing and make sure it was significantly improved.’

This will be especially important in the wake of the Grenfell fire and media coverage of poor social housing conditions that have damaged the industry’s reputation and led to social housing providers ‘having to think about how they engage with residents.’

In order to tackle new and existing challenges, working together as an industry will be crucial.

Greg Campbell believes that one of the biggest takeaways from the pandemic was people in the social housing sector and more widely recognising that ‘we are all in this together’. While he notes that you may get a degree of competition around some things, it does not need to be the focus.

‘There has been a recognition of the importance of working in partnership across sectors. We should be working in partnership with local authorities, with health bodies, with care providers and so on. I hope that it is something that will stay with us long-term, because there is a territorial nature to a lot of housing organisations’ activities, and it doesn’t need to be that way.’

To discuss further, do feel free to contact Greg Campbell on: greg.campbell@campbelltickell.com

This article was first published in NewStart (17th March 2022)

 

 

Campbell Tickell is an established multi-disciplinary management and recruitment consultancy, operating across the UK and Ireland, focusing on the housing, social care, local government, sport, leisure, charity and voluntary sectors. We are a values-based business and firmly place the positioning of our support and challenge on helping organisations to attain change that is well thought through, planned and sustainable. At CT, we want to help organisations create the landscape within which we ourselves would like to exist: fair, inclusive, diverse, engaged and transparent. We build from our values in how we approach all our work as a practice.

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