This piece originally featured on 24Dash.com and is reproduced here with their kind permission
A number of events all came about with a sort of serendipity last week, although there was nothing particularly fortunate about some of the coincidence.
Last week, there were a number of things in and around the continuous news-from-housing that pours into my consciousness through Twitter, that coalesced into this piece. They don't all bind together perfectly, but there's a theme that runs through them around the 'privatisation' of housing associations.
Kicking it all off was a 24housing article by Alistair McIntosh, in which he suggested the privatisation of housing associations is inevitable. Alistair argues eloquently, if a little provocatively, that no future government of any stripe will be able to resist the temptation to privatise the bulging surpluses and regular income of the sector.
Only a couple of months ago, as Alistair mentioned, Policy Exchange laid out the form that this privatisation will take. You might balk at the terminology, but Alistair is right about this – 'freeing' registered providers to seek their fortunes outside of regulation, with an open invitation to financiers to fund 'housing' is already some way down the slope leading to privatisation.
Something else that we are repeatedly told is not being privatised is the NHS. The announcement last week by Circle Healthcare that they'd be withdrawing from their contract to run Hinchingbrooke Hospital in Cambridgeshire is a timely reminder of the reasons that financial institutions get involved in social enterprises: for profit.
It is not doomsaying to reiterate the predictions that some housing alumni have made in their responses to the Policy Exchange document. Regulation may be a dirty word amongst those housing associations straining at the leash to choose their own tenants, but regulation works both ways as a protection for tenants, for providers, and the omnipotent taxpayer's pound.
The discussion about whether what has happened at Hinchingbrooke undermines the funding model has not yet settled. What is clear is that the NHS equivalent of the HCA – the Care Quality Commission - had identified serious failings in the service that Hinchingbrooke provides. While the argument over the effect on patients will simply devolve into politics, there can be no coincidence that the findings of the regulatory body's vote of no confidence in Circle Healthcare was instrumental in its departure from providing the service.
In case there's any confusion about me drawing parallels here, we should be clear that Circle Healthcare is a social enterprise, promoting profit for a purpose. It even says so on its website: “Circle is an employee co-owned partnership with a social mission to make healthcare better for patients.”
This was also confirmed in 2012 when Conservative MP Mark Simmonds “forgot” to declare the £50,000 a year he received from Circle Healthcare as a strategic advisor during the debate on the Health & Social Care Bill. “He made his statement during a Point of Order, referring to Circle as a 'social enterprise'” reported the BBC.
Perhaps we can't take everything on Circle Healthcare's website at face value; things change, and there is still an article on their site about Hinchingbrooke being named the “best Trust in England for quality of care”. This shows the importance of continued regulation. (Turn, turn, turn. And a time for every purpose under heaven.)
In the week following the Circle Healthcare shenanigans, the HCA announced that two housing associations had been placed on its 'watch list'. There's no connection (that I could find with a quick google) between the two Circles, but there's surely a Venn diagram to be drawn in their mission statements about social purpose.
The difficulty that Circle Housing is currently experiencing with HCA regulations will indubitably be resolved, given the record levels of surplus that they accrued last year and the clear determination that must surely ensue to meet residents' expectations about repairs and maintenance.
What happens when housing associations are ‘freed’ from these apparently prohibitive regulations? Which regulatory instruments will be kept, and which will be put aside, and what effect will this have on the tenants? Tenants are already bearing the brunt of the increasing cost of housing associations through the comedic ‘affordable rent’ model – itself arguably an instrument of and advertisement for privatisation - and through welfare cuts.
Hinchingbrooke offers us a reminder of where private investors go when they aren't making a return on their investment – somewhere else. In the gentle murmurs starting to arise from the housing sector in the run-up to the election, you must be careful about what kind of allies will approve of you building homes for sale, for private rents and for un-affordable rents.
Circle Healthcare ran a social business that made profit for a purpose. In all the talk of its failure, hardly anybody has stopped to ask whether the health of its patients should have come before this profit. In the analogous housing model, everyone is making their own assumptions about what is best for tenants, without asking them.
We're on Twitter, in case you ever want to ask us. Let's draw a distinction between investing in social value, if necessary by going back to the more efficient grant subsidy of bricks and mortar, and the unhinged pursuit of the social enterprise for its own sake. This could still be a time of peace; I swear it's not too late!