Housing associations will be set free to roam as private companies. There is no doubt in my mind about this.
You look at all the cash tied up in the bricks and mortar. Each and every day lots more cash comes in from renters and buyers. In most places, there is plenty of demand for the product. This is a juicy steak one millimetre away from a slavering dog’s mouth. I am of course putting aside the morality. But money is talking. And the politicians will listen to it in the end. Privatisation is going to be a done deal.
Some of our chiefs are really keen on privatisation. They see it as a win-win. Associations will keep doing more or less what they were set up for, but with much more financial freedom. Friends, you might not like it, but there is only one outcome ahead. I suggest that you sit back and enjoy the ride. You are about to see schadenfreude.
Associations will be run to make a profit. That is not a crime. But it is a far cry from how things are today. This is a business where scale will be key. So we will end up with maybe two or three associations in London and no more than 10 across the country. I could not begin to guess at who will be the winners and losers. Though we do know that it will be a rougher ride.
There will be no more prestigious HQs. Capita prides itself on its tatty offices. Associations will have to do the same. The office should be an advert that screams WE CUT COSTS. That is not something we are good at today. Maintenance costs have shot up 5.5%. Heads would roll for that in a company.
There will be different people running the show. Chiefs will be on seven figure salaries. It will be fascinating to see how many of the current CEOs make the cut. The ones that do will surprise you.
What about the rest of us? There will be a right old battle to get the living wage for folk at the sharp end.
On the other side of the counter, will things be better for tenants? Not a chance. The new companies will have a monopoly and will use that to their advantage. Tenants won’t be able to shop around. Good luck with getting through to that call centre.
Is there any upside to this? Will we get lots of new homes? Will these be in the right places? Will anyone be able to afford the rents? There is a simple answer to these questions. If it makes money they will do it. So I would expect to see higher rents and more new homes crammed into cheaper areas. If you can’t pay your rent or you are a trouble maker you will be out on your ear. Cash is king.
Something is bound to go wrong. It always does. Then the good old taxpayer will rescue the company and we will be right back where we started.
Now of course some of these companies might well do a fine job. But the picture I have painted is a recognisable one, isn’t it? We have seen things like that happen again and again in other areas. Is there any way to put a stop to this? Does anyone actually want to prove me wrong? What would we need to do?
We must convince the government that we are already cutting costs as fast as we can. Our message could be that there is just no need to throw the baby out with the bathwater and restructure the entire industry. The bad news is that we are struggling on value for money. Our costs keep going up beyond the rate of inflation. That, in a nutshell, is the case for privatisation. We must sort this out. Unfortunately we are running out of time.
This is one sell-off that Osborne and Balls will find very hard to resist. They have no money. Housing associations have lots of it. Use it well or lose it all.