Welsh Housing Associations contributed over £400 million pounds to the economy during 2007/08

Published by Edwina for Community Housing Cymru in Housing

This is according to a report, launched today by Jocelyn Davies, AM, which emphasises the important role Welsh Housing Associations play in supporting the Welsh Economy. The report, carried out on behalf of Community Housing Cymru by the Welsh Economy Research Unit at Cardiff Business School, outlines the number of new homes built by RLSs (Registered Social Landlords), estimates the economic impacts of housing associations in Wales including regeneration, and reviews some of the social and economic implications of housing association activity.

Some of the key findings include:
Welsh Housing Associations spent an estimated £407 million in 2007/08 comprising operational spend, including staff costs, construction spend, and commercial property spend. Of this 36.2% was spent on construction, 23.1% on labour costs and 21.9% on maintenance/repairing stock . £338m of the £407m was retained in Wales.

For every one full time person employed by a Housing association, another two and a half jobs are supported elsewhere in the economy. HA's employ 3,300 full time employees with 8,747 employed indirectly taking the total to 12,047.

Housing Associations supported a total output of £835m, and the impact on Gross Value Added, which is an estimate of how much real additional worth added to the region in terms of local additions to wages and profits, is estimated at £227m.

The contribution made by HAs to regeneration and the total expenditure on brown field development for 2007/2008 is estimated to be £100m.

Housing Associations spent £89m on maintenance and repair work - without this expenditure, the regeneration process would be arrested and areas would fall into decline. A further £1.7m was spent on training and £2.6m on other expenditure including community regeneration projects not involving building.

The total estimated spend on activities which were linked with the regeneration process in 2007/08 was £210.8m.

1,533 new homes were provided during the year 2007/2008 by RSLs. The major proportion of this new provision was achieved through social housing grant (55%), with the remainder non-SHG, comprising units built through innovative ventures by the HAs themselves or planning gain (Section 106 agreements) .

This will prove a challenge to the sector because the number of section 106's coming into fruitition is now reducing due to the economic downturn. If HAs are to reach target, then they will need to maximise their role as social enterprises. The Welsh Assembly Government will need to provide opportunities to use Strategic Capital Investment funding and public land to ensure that they exploit current market opportunities for affordable housing.

Nick Bennett, Chief executive of Community Housing Cymru commented: "The impact study shows what we as a sector achieved in 2007, before the Essex Review, before the additional investment opportunities emerging from the credit crunch and before we look to match funding and develop the impact on EU convergence funding - imagine what we can do in the future? I hope it gives inspiration to all suppliers and private sector stakeholders at a time of great worry, and I also hope it serves as an advocacy document within the Welsh Assembly Government and in Local Government, to break down barriers and ensure that stakeholders understand investment in social housing makes economic and social sense"

Community Housing Cymru knows that there are difficult times ahead in the light of the credit crunch and current economic downturn and believes Housing Associations have a key role to play. CHC has highlighted five areas in which RSLs can help manage the economic downturn.

Expanding mortgage rescue: In terms of repossessions and mortgage rescue in Wales the position could become desperate. There were 8,800 actions during the first half of 2008 in Wales according to Shelter Cymru. In the first quarter of 2008 repossessions rose 25% in Wales compared with 15% across the UK. England has devoted £200m to deal with the problem, Scotland has devoted £25 ,yet in Wales only £5 has been earmarked.

Buying vacant/unfinished private developments: To deliver more there is a need for increased funding and CHC sees the Strategic Capital Investment Fund as a source of funding where housing should be a priority.

Providing affordable housing on public land: More public land should be offered for affordable housing, reducing land costs which would allow associations to invest more in direct provision of affordable homes across Wales.

Expanding financial inclusion services: With the cost of borrowing rising, tenants often end up taking loans with door step lenders at extortionate interest rates.

Match funding E U Convergence Programme: Associations currently invest £90m in community regeneration in Wales. By harnessing this third sector regeneration investment as match-funding WAG could ensure further signigicant investment on the ground in education and training, community assets, the physical regeneration of communities, reducing our carbon footprint and reducing fuel poverty.

Ian Williams, Chair of Community Housing Cymru commented: " As registered social landlords we have a key part to play in preventing homelessness, but as social enterprises we also have a broader role to play in sustaining and creating employment, investing in housing and also regenerating communities. We need more action to reduce fuel poverty, access to economic development as well as traditional housing finance, borrowing from the European Investment Bank, and accessing structural funds. 150,000 people in Wales are paying at least 180% APR to door step lenders. A new vehicle for delivering financial inclusion in the most excluded communities in Wales is vital and the sector if looking at the feasibility of developing a Community Development Financial Institution (CDFI) in Wales, but we need WAG and DWP support in achieving this. We need to work together to ensure that investment in housing and regeneration has the maximum impact in communities that have been blighted by poverty for too long."

Jocelyn Davies AM, Deputy Minister for Housing said: "I hope the Essex Review and the way that the One Wales Government has taken up its recommendations has put to bed any doubt on how important the partnership between the centre, Local Government and the RSL sector is.

As the report shows, the Assembly Government doesn’t build a single home itself so we depend on Local Authorities to take the lead locally in identifying need and working with partners to build them.

We expect all partners – public, private and third sector – to help us deliver our wider objectives for economic and community regeneration. To support this, the Assembly Government has already increased the amount of Social Housing Grant to unprecedented levels and are committed to maximising other opportunities for funding. We are actively responding to the Essex recommendations on regulation of the RSL sector.

We need to remember it's not just about ‘bricks and mortar’. We need to ensure that local people have real control over their communities and the organisations that deliver their housing and regeneration."