History repeats itself?

Yesterdays Inside Housing email bulletin reports that Edinburgh Council is to build the city’s first council homes in nearly 20 years.

For the past 2 decades or so Conservative and Labour governments have effectively stopped Councils building new homes since they thought that housing associations could do a better job.

Successive governments also argued that loans to housing associations did not count as government debt which helped improve British public finances and support the pound. It’s a bit of a cheap jibe of course, but such considerations did not stop the government nationalising Northern Rock I suppose?

I think the real major reason was that Councils were generally perceived as poor builders and landlords. I will admit that I have some sympathy with this view. Today, by coincidence I was chatting with a trade union member who told me that his Mum tried to buy her Council flat a few years ago but the building society refused to give a loan to any flats in her “system built” block. They would give some loans to blocks built via this construction method but only depending upon the (private sector) company used to actually build the block.

Some firms built these blocks properly, many didn’t.

Mind you, some housing associations in recent years have had to knock down and rebuild new stock which has been poorly designed, badly built or wrongly located.

I actually think that there is a role for both housing associations and Councils to develop and manage homes. Not just in the social housing sector either. Without opening up old wounds, now that the sector has been well and truly broken up, then perhaps it is time that housing associations and Councils face a level playing field with regard to new investment?

Ironically, “big is beautiful” is back in vogue again. Many Council Housing departments were criticised for being too large and bureaucratic. Now for what I think is fairly obvious “economy of scale” reasons, some informed pundits think that housing associations should each ideally manage 100,000 plus units to be really efficient.

I can also remember attending noisy trade union rallies on cold, wet and dark winter evenings which tried to stop local Councillors from privatising their in-house repair and maintenance teams (DLO - Direct Labour Organisations). They were also supposed to be too large and unresponsive.

Nowadays, it is not uncommon for large housing associations to start up their own direct labour force since most private contractors are simply not able to offer a proper service based on “subbies” and that in-house teams do not charge VAT (it’s actually a “no-brainer” that properly managed in-house teams are cheaper and better).

So history is in danger of repeating itself and so where are we in this current cycle? Have we really learnt the lessons so not repeat the mistakes of the past?