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Blog 12th June 2018

Jun 12th 2018, 10:23

Blog 12th June 2018

In this week’s blog, I refer to: Public Finance; Brexit; European Union; CIPFA; Inside Housing; Aspire Housing Association; Impact Housing Association; Riverside Group; Regulator of Social Housing; Local Government Chronicle; Homes England; HM Treasury; the New European; Brighton & Hove City Council; Local Government; Housing; Local Authority Housing Finance; Seminars and Training.

While ‘Brexit’ is very much in the news, its implications for public services are rarely covered. However, in this week’s ‘Public Finance’ magazine it is reported that:

“The public sector looks less than combat ready for what may be coming down the tracks. Senior council finance officers say they are worried about the budgetary implications of Brexit. Recent surveys indicate two thirds feel ‘pessimistic’ about its impact on local financial sustainability, notably in some heavily Brexit-supporting areas such as the Northeast.”

According to the government’s own analysis, a standard free trade agreement with the European Union could cost the exchequer up to £60billion a year. This would obviously have implications for public budgets. There are also concerns about recruitment of staff if the free movement of labour comes to an end, and whether the existing European Union programmes of regional aid will be replaced with adequate United Kingdom programmes.

And Rob Whiteman, Chief Executive of the Chartered Institute of Public Finance & Accountancy, has said that:

“We have a government that is obviously very tied up in Brexit… As a result, local government is in an uncertain place for the next ten years.”

Last week’s ‘Inside Housing’ included an interesting piece by Sinead Butters, the Chief Executive of Aspire Housing Association and Chair of ‘Place-shapers’. She describes the ‘housing crisis’ as follows:

“We aren’t building enough homes – only half of what we need. It takes nineteen years to save for a deposit today; it was three years when I bought a house in 1988.

“Homelessness has increased by 48% in just eight years. There will be a 25% increase in people over 65 with care needs by 2025. Technological advancement continues, with even now 85% of sixteen to 75-year olds having access to a mobile phone.

“In-work poverty is set to worsen as wages stagnate and house prices increase, and the gap between rich and por, between failing cities and thriving cities, will also widen. And there is no money.

“With GDP almost flatlining and forecast growth by the Office for Budgetary Responsibility at 1.4% per annum, there’s not much in the pot to tackle what is happening now, never mind what’s coming.”

Readers of this blog will be aware that Impact Housing Association was downgraded for governance and viability by the regulator in 2017 and has now agreed to merge with the Riverside Group.

I was on the Board of Impact from 2009 to 2015 and was Chair from 2011 to 2015. Since 2015 I have continued as a shareholding member and in that capacity have had the opportunity to follow the series of events that have led from the in-depth assessment through to the merger being agreed. In my view the process was not satisfactory, and so I have written to Fiona MacGregor, the Executive Director of Regulation at the Regulator of Social Housing to share with her my thoughts and to make some suggestions for a changed approach to regulation, accountability and mergers in future.

When I receive a response, I will share it with readers of this blog.

Anyone who would like to view or download a copy of the letter can do so by clicking here.

Last week’s ‘Local Government Chronicle’ included an interesting piece by Robert Cusack on the construction industry. He identifies a pending crisis caused by:

  • Dependence on workers from other European Union states (for example, 60% of the labour force at the Berkeley Group comes from Europe)
  • Shortage of skills and training (according to the Chartered Institute of Personnel & Development the United Kingdom is ‘sleepwalking into a low value, low skills economy post-Brexit’)
  • An ageing workforce (Nick Walkley, Chief Executive of Homes England, has spoken of ‘a crisis in our ageing construction workforce, with 20%-40% retiring in the near future’)

Robert Cusack also points out that:

“British construction workers are around 20% less productive than their counterparts in France and Germany… Working alone, a human bricklayer can lay between 300 and 500 bricks a day, whereas a robotic semi-automated mason unit can lay up to 1,200 a day.”

This situation in the construction industry will clearly have implications for the maintenance, improvement and new build programmes of local authorities and housing associations.

We are often told that the taxpayer will eventually get back the money that was spent on bailing out the banks. However, according to Angela Jameson, writing in the ‘New European’, HM Treasury are now selling shares in the Royal Bank of Scotland that were bought for £5.02 for £2.71 – a loss of 46%!

My thought for the week comes from Councillor Daniel Yates (Labour), Leader of Brighton & Hove City Council, who writes in the ‘Local Government Chronicle’ that:

“In times of difficulty you can either fight over bits of wood or you can build a raft.”

Our next seminar will be on ‘Developments in Local Authority Housing Finance’ and will be held in Leeds on 10th July and London on 17th July. Both sessions are proving popular, but we still have a few places available.

This seminar looks in depth at current developments in local authority housing finance in England – especially the implications of the policies of the government, the public finances, rent policy, welfare reform including universal credit, issues around the reinvigorated ‘right to buy’, changes to the funding of supported housing including the proposed sheltered housing rent and locally administered budgets for short-term accommodation, the implementation of the homelessness reduction act, the flexible homelessness reduction grant, the affordable housing programme, local housing companies (what they can offer, how to establish them and how to set one up) and new development.

For more information or to make a booking, please click here.

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