Winter of discontent

Confidence in the governance of housing associations ebbed away a little more this week with the news that two more housing associations have been put under supervision by the Housing Corporation (page 15). Lenders have started to ask questions and the Joseph Rowntree Foundation is preparing a wide-ranging review of checks and balances in not-for-profit organisations akin to the Higgs report into running private sector boards (page 7).

Some will argue that this is a mere storm in a teacup and will pass, or that it's a sign of a new broom at the corporation. There has been no year-on-year increase in supervisions, they will say, and no associations have been closed. If the sector's reputation is better than NHS Trusts and many wings of the private sector as is being suggested, then why worry?

But, as even The Times pointed out last week, associations are sailing into choppy financial waters: restricted rents, rising interest rates, rises in maintenance costs, higher National Insurance, and rising debts. Manageable perhaps for the established associations in the South-east, but devilish tricky for some transfer organisations. "Complacency has become widespread in a sector not used to coping with financial markets when they turn ugly," it warns.

With the sector facing higher risks than before, the JRF's action is to be welcomed. But there's no excuse in waiting for the review's release – now should be the time to take a good look at your board, as Metropolitan has done (page 12). In the wake of the Places for People row, it might be tempting to move towards quieter, tamer board members. This is exactly the wrong thing to do – what's needed is people to ask difficult questions.

Associations are sailing into choppy financial waters. The JRF’s governance review is to be welcomed

Called to account
The Treasury rarely puts its hands in its pockets during spending reviews, so there was surprise all round when last week it suddenly pulled out an extra £400m for the Supporting People grant regime. But such largesse rarely comes without strings – in this case the government is to find out why the new grant, which has now climbed to £1.8bn, needs so much money.

This means there will be no announcement on funding for future years – 2004 and 2005 as expected – until the witch hunt has been completed in December, with all the uncertainty that brings.

By asking councils how much cash they think they should get, the government has opened itself to inflated bids. Many argue that the definition of what is eligible is vague; and anyhow, when does what's needed to help a person with mental health problems live their own life in their own flat, stop being a bill for the housing provider and become the tab of the social services?