‘Haven’t we learnt the lessons of Vestia’, warns housing chief

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

The chair of the PlaceShapers group of housing associations has hit out at calls from housing giant Home Group for “fewer, larger and better” housing associations.

Mark Henderson, chief executive at 53,000-home Home Group, made the call at a fringe event at the Conservative Party conference arguing for more consolidation through mergers or development partnerships to secure debt and build more homes.

However, Tony Stacey, chair of the PlaceShapers group – which represents 83 community-based housing associations owning more than half a million homes – said he “fundamentally disagreed” with the idea of fewer, larger and better organisations as a way forward for the sector.

He said: “I thought that the evidence had knocked this one on the head, and it amazes me that a statement like this can be issued that flies in the face of all the facts. I had expected that the salutary lesson from the Netherlands where the largest association, Vestia, went bust would have made us all stop and think before issuing further calls claiming that “biggest is best.”

He said research from the Chartered Institute of Housing, the Homes and Communities Agency and the National Housing Federation has shown time and time again that "bigger does not make for a more efficient or effective housing association".

“And when it comes to funding,” he said “no significant difference has been found between larger and smaller organisations, more that this is driven by risk and geographical area.”

He said the housebuilding market is not working currently but that PlaceShapers wasn’t turning its back on the need to build homes – however difficult this might be. “This needs creative solutions, and PlaceShapers excel at this," he said.

“PlaceShaper members offer strong local accountability and dynamic participation to ensure that the value of independent and innovative housing associations is recognised. Our aim is to further promote this point of difference and to stand united on this front.”

PlaceShapers steering group member Adam Ronaldson, chief executive of Saffron Housing, said borrowing is only part of the equation which makes organisations effective. “It is not the start and end of the game,” he warned.

Another steering group member, Angela Lockwood, chief executive of North Star Housing Group, said analysis of both HouseMark and the Tenant Services Authority data did not provide any statistical evidence of economies of scale to be achieved through size.

She said: “From a point of quality you only have to look at the performance indicators and levels of tenant satisfaction for some of the largest organisations to see that bigger doesn’t always mean better.”