David Montague

Conference season – Part 1

At this time of year I take a deep breath and plunge into the conference season. First the National Housing Federation in Birmingham, then Labour in Brighton and then Conservative in Manchester.
Published on 22/09/2017

At this time of year I take a deep breath and plunge into the conference season. First the National Housing Federation in Birmingham, then Labour in Brighton and then Conservative in Manchester. As each conference progresses a picture of the future begins to emerge. And by the time I get to the end I have a pretty good idea of what the year ahead has in store.
Here is my first report back on highlights from the NHF conference.
The first day kicked off with Sajid Javid, Secretary of State for Communities, promising a fundamental rethink of social housing in the form of a green paper – a national conversation about social housing. His aim, he says, is to make social housing something the nation can be proud of, quoting Harold Macmillan’s vision to build houses for the people, housing that works for everyone. This is why I joined the housing sector thirty years ago, to tackle the stigma that comes with social housing and to fix the housing crisis. So I left this session feeling very upbeat – could this really be a moment of change? A return to a time when politicians worked together on the things which mattered most? I hope so.
Sajid assured us that there would be an announcement on the future of housing association rents "very very soon", something we are all keen to hear. To fund our ambitious plans for new homes and communities we need the confidence of our investors, and that confidence depends on what happens to our rental income after 2020. Rumour has it that the Chancellor is saving all the announcements for the Tory conference and Sajid was clearly frustrated at not being able to share more. But as we all know, two verys are better than one.
After a short reminder from a leading economist that the outlook was negative we heard from a young (compared to me) poet from Cardboard Citizens. "You cannot escape from the struggle that made you" he told a sea of professional housing faces. I guess we all have our struggles, but the people in suits, including me, need to connect with the struggles of the people in our homes.
The next morning our regulator revealed its intention to publish a batch of regulatory judgements downgrading a number of housing associations from the top V1 financial rating to the middle V2. By publishing as a group they are telling us that the sector is changing – we are borrowing more and taking more market risk in an uncertain environment. V2, they told us, was fine so long as governance remains strong. But if V2 is good, what does that make V1? It all depends, was the answer – if your surpluses are gathering dust then maybe V1 is not a good thing. But if you are driving efficiency, working your assets, taking measured risks and investing in homes and communities, V1 is good as well.

In future, the very largest housing associations (such as L&Q) will receive a bespoke, more intensive approach to regulatory engagement, something we welcome. L&Q trades on the confidence of the regulator, we see our future as a shared endeavour, we share our plans, our successes and our failures. And as we grow and change we need a strong independent regulator that can give confidence to our investors, our political stakeholders and our residents.
In the afternoon John Healey shadow housing minister took the stage and told us that a Labour government will back us 100 per cent with investment, certainty and political will. He promised to fight our corner, just as he did when he was housing minister in the last Labour government. He even went as far as offering support to the Tories if they were prepared to tackle the big housing issues. But in return he wants a return to 2010 style regulation, “unfinished business” in his words. He wants to see a return to proper consumer protection, resident involvement, a national resident voice and a locally responsive service. Post Grenfell this is our challenge whoever wins the next election.
After his speech a few of us met John privately. We told him how we are involving residents and responding to the Grenfell Tower tragedy. He was impressed and recognises that there is much that local authorities and the private sector can learn from us, but he wants more – a national framework that guarantees a voice to local authority and housing association residents.
The conference ended with Alok Sharma, housing minister. This, he said, was a seminal moment. He wants more homes. He wants to improve social housing, for everyone to be positive about social homes and social tenants. And there will, he assured us, be an announcement on housing association rents very very soon. I found myself thinking how far we have come. Whatever your politics, social housing is no longer a dirty word.
So what to make of the story so far? Everyone agrees that we need more homes. That social housing must improve. That the stigma must be eradicated. Everyone agrees that housing associations must take a leading role in housebuilding and reconnect with our tenants’ voice. And everyone agrees that it won’t be easy.
With Brexit, market uncertainty and a government with a wafer thin majority, can the Tories really drive radical change? Will the opposition be able to resist the temptation of gaining political advantage and put the needs of social housing tenants first? And if there is a general election would things be any easier for a Labour government?
Next stop Brighton and Labour. I will write again very very soon.

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