Growing pains

I was recently asked to say a few words at the 70th anniversary celebrations of the National Housing Federation – the umbrella body for housing associations in England. It was a timely reminder of how social housing has changed in the 30 years since I first became involved.

Back in the early 1970s, social housing was overwhelmingly delivered by local authorities. Housing associations were generally seen as specialist bit players, doing work that local authorities were reluctant to undertake, such as rehabilitating older private housing or providing for people with special needs. In total they were responsible for no more than 200,000 dwellings.

Today the picture is very different. Housing associations own about 2 million homes, roughly as many as local authorities. They are the main providers of new affordable housing, both for rent and low-cost home ownership; and they are involved in the whole range of work, including new-build, regeneration and partnerships with private housebuilders.

So it might be expected that housing associations – or registered social landlords as they are officially called – would be brim full of confidence and optimism. With assets totalling £63bn and turnover up 11% in the latest year, according to the latest Housing Corporation global accounts, associations should surely be riding the Crest of a wave. But recent conversations I have had with several luminaries in the sector paint a slightly different picture. There is a surprising degree of uncertainty and even anxiety about the future.

In part that is the product of success. The movement is increasingly dividing. A relatively small number of large associations are doing the bulk of new development, whereas the much larger number of small to medium-sized associations have little prospect of significant future expansion. Inevitably, in this context, talk of mergers is rife, with all the consequent anxiety about loss of identity and jobs.

There is also the government's decision to open up social housing grant to private developers. Although the evidence suggests that most private developers will still want to work in partnership with associations, not least with an eye to the continued management of social housing, the competition for grant is threatening for associations – particularly at a time when the private market is flat and housebuilders might see social housing as a means of filling order books.

Third, there is the ambivalent relationship with local authorities. In part this is the product of history. Councils that used to rule the roost in social housing have not always been comfortable with the inexorable rise of housing associations.

Competition for grant is threatening for associations – particularly at a time when housebuilders might see social housing as a way of filling order books

The programme of large-scale voluntary transfers of former council housing has also generated frictions. In many areas this process has worked well, but in others there has been strident opposition. Despite the parallel success story of ALMOs – council housing now managed at arm’s length – many councillors have remained hostile to what they perceive as the one-way process of housing being transferred away from local authorities to RSLs.

Then there is anxiety that, as they get even larger, associations may find themselves repeating the mistakes of too-large local authority housing departments such as Birmingham, which encountered real difficulty in managing its stock efficiently and effectively. Most directors of larger housing associations are confident that they will do better, but their counterparts in smaller associations are not so sure that the challenge of scale will be satisfactorily handled.

To add one further complicating ingredient, the housing association movement is clearly at something of a crossroads. Many of the key players of the past 20-30 years are coming up for retirement. The next generation do not have the same experience of building up an organisation almost from scratch, nor the accompanying understanding of the importance of the grassroots involvement that was so characteristic of the earlier years. Will the shared ethos of the movement that has to date provided the glue to hold together its increasingly diverse members survive, or will there be a parting of the ways?

The next few years will provide the answer. They will certainly be challenging ones for a group of organisations who unquestionably represent one of the great success stories of recent British housing history.

Nick Raynsford is former construction minister