Housing associations made £2 billion profits last year so why won’t they house the poor?

This morning the opening line of a sales email caught my eye in the nano second that usually exists between the email arriving and me deleting it. It read: “Since 2009, profits for housing associations have increased nearly tenfold to just under £2bn p.a. providing the foundations for more effective services.”

Three things struck me. First, housing associations that were set up to provide homes for the poor are developing fewer and fewer homes for rent at truly affordable levels, focusing more and more on ‘products’ that boost their profits.

Second, the use of the word ‘profits’. Most housing associations are charities or Industrial and Provident Societies who prided themselves on using their surpluses to achieve their charitable objectives. Profit is increasingly the order of the day, and these multi-million Pound businesses remain charities for one purpose alone – tax purposes.

Third, do £2 billion profits really lay the foundations for more effective services. The leap of logic is astounding. The rail industry, the banks, and others prove that profitability is no guarantee of improvement in the effectiveness of services.

In housing, a couple of years ago I sat in on a presentation of a housing association on its cost saving programme and performance standards. The voids team reported that it had achieved its cost-cutting target (reduction in staffing) four months early, but a few minutes later the same team reported that relet times had slipped from 24 days to 41 days.

Profitability? Improved effectiveness? Hmmm….



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