We are preparing our new corporate plan. With the end of the next Parliament likely to be in 2020, what is going to be different? What will have changed irrevocably; fundamental shifts that will transform how we view our world. With the Chancellor announcing that another £25bn of cuts is needed in the first two years after the election, there are four key trends that are evident.
Public services are being dismembered. Assets are being transferred into the private sector rapidly and that is likely to be accelerated after the next election. At the end of 2013, 3,670 schools had become Academy schools. There are no national figures available, but the Local Authority accounts in the county where we work show that school buildings to the value of £40m have been transferred so far. In 2014, 56% of English secondary schools were academies. Primary schools, 11% and growing.
In January 2014, it was estimated that 70% of contracts being awarded by the NHS were going to private
companies. As an indicator of the future, Peterborough and Stamford NHS Foundation Trust, Britain’s most
indebted NHS foundation trust, has been warned that it is “financially unsustainable”. It will soon be in
discussion with private sector bidders about the take over the management of its’ two hospitals in attempt to
service its PFI debts.
The Right to Buy peaked in 1989, ten years after it’s’ introduction, at 135,701 per annum. Dropped to its
lowest at the end of the last labour government to 3,179 and is on the up again, more than doubling to 8,398.
Various methods are being mooted on how to give tenants the opportunity to own their home – at a cost to
the social rented sector.
Secondly, we need to recognise that 2014 is the end of the period of cheap money. Exceptionally low interest rates have been engineered to help stimulate growth and as western economies start to recover, quantitative easing is already being scaled back. Interest rates will begin rise in 2015 and continue upwards as we approach 2020. This will have a dramatic affect on house prices, particularly in London and the south east. The professional middle classes will be particularly squeezed and vocal. Either priced out of the home ownership market or enticed into taking on more debt with the Help to Buy and struggling to pay the higher interest rate mortgage.
Thirdly, with digital technology, communication channels are growing exponentially. The emphasis has been the undoubted impact on the world of work and effect on organisations. But ever increasing digital communications is rapidly changing personal relationships between people and groups. Where for example, many are predicting that public services could soon be crippled by the ‘ticking time bomb’ of dementia, Telecare and Telehealth hold out huge hope for the future. Empowering individuals to extend their independent life and delay dependence on the state is in everyone’s interest.
Lastly, successive research shows that public support for the benefits system has been in steady decline in recent decades. The proportion of the general public agreeing that we should spend on benefits for those in poverty fell from 55 per cent in 1987 to 27 per cent in 2009. 84 per cent of people agree that stricter tests are needed to ensure people claiming incapacity benefit are genuinely unable to work. 78 per cent agreed jobseekers should lose some of their benefits if they turn down work. 62 per cent agreed people on benefits should have their payments capped if they choose to have 'many' children. 57 per cent agreed people who receive higher housing benefit because they live in expensive areas should be forced to move into cheaper housing to bring down the benefit bill.
These trends reflect a steady decline in support for the benefits system, with little variation under different governments.
Back to my corporate plan. The housing association of 2020 will need to be robust; financially resilient in the face of hostile environment. It will need to embrace a multitude of communication methods, recognising how they influence relationships but also how different communication routes can be harnessed to enhance lives. The dismemberment of the state into private provision provides great risks but also opportunities for housing associations. Opportunities to provide not just innovation and new services, but also opportunities to show leadership.
The speed, scale and breadth of these changes are unprecedented. Our corporate plan will be about ambition and growth, about quality and support. But it will also be about staying focused on those in need, not abandoning core customers, our tenants. It will be about using our assets and our imagination to deliver services to an increasingly marginalised section of society.