Engineering change: The housing boss catching the eye

Published by 24publishing for 24dash.com in Housing and also in Communities, Development, Local Government, Tenure

Originally trained as a chemical engineer, Moat chief Brian Johnson – who leaves for London-based Metropolitan next month – said he was lucky the sector ‘took a chance on a newbie’ when he came into housing eight years ago.

But it is his fresh outlook – that has transformed his previous organisations – which has surely caught the eye of his new employers, writes Ross Macmillan.

I find it hard to disagree with Brian Johnson, the outgoing chief executive of Moat.

Sure, I haven’t probed his passions for cuisine, cinema and home décor – all of which I’m sure are satisfactory – but on housing, he’s someone you find yourself agreeing with…an awful lot.  

He’s about to embark on the top position at London-based Metropolitan – which manages over 36,000 properties compared to Moat’s 20,000-plus home – and for what it's worth, I believe it has bagged itself a winner in Johnson.

As an outsider to the sector before joining Westminster ALMO CityWest eight years ago – the organisation he led before Moat – he still retains that unwavering edge and sharpness that’s unswayed by ‘how things were done before’.

And with a Government hell bent on ripping up the rulebook on social housing – and burning the chapters on funding, allocations and welfare – he’s very much a man you’d want at the helm.

Relationships

One word that crops up in conversation in just about everything we talk about is relationships.

The relationship between the two Government departments finely balancing the future of affordable housing – the DCLG and the DWP – who, at times, look more desperate to trip each up than work together meaningfully; that of housing associations and their residents; and the role of local authorities in the future of house building.

The lack of a meaningful “connection” between the DCLG and the DWP – which has seen both departments withdraw subsidy from either end of the ‘subsidised’ housing model, through capital grant and housing benefit respectively – needs urgently addressing, he says.

He has some sympathy for the “extreme budgetary pressures” the departments are under, but is convinced there is a lack of understanding across Government about the subsidy model and how housing associations work – evidenced by the fact that housing associations in London and the south east can no longer afford to build four-bed homes because of the eminent £500 a week benefit cap.

“My sense politically is that there is very little join up between what’s being said on benefits and the aspirations in terms of housing,” he says. “The call for lots of institutional investment is simply not consistent with the calls to continually push down housing benefit. The only thing that’s attractive to investors about affordable housing or lower end private rented sector is inflation linkage of rents. Put that under threat by threatening housing benefit policy and I’m afraid institutional investment, in any form, is going to be pretty tough.”

He is also calling on the Government to clarify the subsidy model – if there is one – post-2015, which he describes as a “brick wall we’re all approaching”.

‘Paternalistic’

Where he is less critical of the government is in its bid to open up debates and conversations about housing which the sector wasn’t engaging in prior to it coming to power.

“We’re allowed to talk about some structural questions that relate to housing now that I don’t think the sector was really engaging with prior to this government,” he says carefully. “Should residents benefit from subsidised housing when they no longer need the subsidy. To what extent should landlords be doing things for residents the way they have done before and vice versa. It seems to me those discussions were long overdue and quite necessary so I take that as a positive.”

Where Moat is putting this into practice is through affordable rent and service standards.

“The relationship housing associations have created with their residents over the years has been very paternalistic,” he explains.

He says housing policy and welfare reform is pushing back on that and is questioning whether that relationship has been entirely helpful. “My personal view is that it hasn’t,” he says. “I think it’s time to think about how we make that relationship more constructive.”

In a bid to ensure affordable housing is rationed to those most in need, the Government has, among other things, scrapped lifetime tenancies and wants higher earners to pay more. It’s also eroding social housing with a more expensive tenure which it wants housing associations to use to build more homes.

Johnson believes it is the “right thing to do” to ask those who can afford to pay more for a housing association property to do so. “They can stay in the home,” he says, “but we think that if you can afford to pay more, we’d look for you to do so. We feel it’s the right and decent thing to do.”

Moat is also consulting – with a view to implementing next year – on plans to reward with a better service those residents who look after their tenancies.

The Tom Manion-esque policy would see an enhanced ‘five-star’ service’ for residents that go over and above the required compliance with their tenancy agreement; while a three-star service would be reserved for those “who place themselves in breach of one or more conditions of their tenancy agreement”.

“There is something intrinsically wrong about a system that treats people who work damn hard to keep to their contract in the same way as people who take some poor decisions around what they spend their money on and how they behave,” he says. “There are decisions people take in their lives and it’s important to recognise they have consequences.”

Development

Moat is planning to develop 1,800 by the end of the Homes and Communities Agency’s (HCA) affordable homes programme – with tenure split between shared ownership or equity and rented homes. Incidentally, the programme would have been 400 homes lighter had Moat not chose to opt for a maximum rent increase last January. “It led to quite a big increase in capacity and in a way is exactly the manifestation of the tensions we are always working with in housing associations,” he says. “What’s the right balance between making revenue surplus and spending that on new homes? In that instance, it gave us more capacity.”

Some 40% of the homes Moat has are either shared ownership or equity – a market he says that is flourishing in the south east with values higher than expected and Moat close to moving into a position that will see it have no homes unsold for more than six months.

“That’s never happened in the history of Moat,” he says. “There’s something there about the shared ownership market that is holding up.”

He is, however, more concerned, the Government has yet revealed its post-2015 house building plans. He said such uncertainty is not far away from putting the brakes on future schemes. He adds that access to funding is not an immediate issue, but that longer term, because of Moat’s high proportion of shared ownership properties, asset cover i.e. the security that it borrows against, will be a future focus. It has also stripped out a third of its operating costs since Johnson took over in 2008, which has helped generate new housing capacity.

He also adds that "a lot more could be done" to improve housing associations' relationships with local authorities when you look at the former's borrowing powers and the freedoms presented by the Housing Revenue Account reform. “I see the future as the two working together," he says.

He says Moat is doing Affordable Rent but highlights the damaging effects of a Government pursuing a fragmented policy agenda.

“We’re doing Affordable Rent homes," he says. "We’ve capped it at a level so the £500 benefit cap doesn’t affect people in up to three-bed properties and we’re just not delivering four-bed homes really until the Government straightens out how it’s doing things. Really they’ve made it impossible to develop four-bedroom properties.”

Metropolitan

He describes the opportunity at Metropolitan as more of a “stretch” and regards it as one of the “hardest career moves I have made”.

“I have loved my time at Moat. I have done what I came to do and sort of need some stretch again. I love the organisation and the people, but it’s time for someone else to pick up the reins.”

As for legacy, he believes Moat is now sharper, more “change capable” and “far more inquisitive about how it addresses new challenges but in a way that retains its social purpose.

As for Metropolitan, Johnson admits he’s both nervous and excited.

“It’s a more complex organisation with a big care and support focus,” he says, ironic, since Moat withdrew from its role as a support provider following cuts to the Supporting People programme. “It was a tiny part of the business,” he says. “That won’t be the decision at Metropolitan. I’m thoroughly looking forward to the new challenge.”

The life of Brian

Prior to taking the reins at Moat in 2008, Brian led Westminster City Council ALMO CityWest Homes. During his four years as chief executive of CityWest, he led the organisation to a three-star with excellent prospects rating from the Audit Commission and established a new home building programme, a first for an ALMO.

Before he joined CityWest, he was executive director of operations for Remploy. Prior to that he was business engineering manager at Tate & Lyle. He originally trained as a chemical engineer and held a number of management positions at ICI.