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23 November 2022

Continuing progress in the face of substantial challenge

Continuing progress in the face of substantial challenge

CHC CEO Stuart Ropke’s speech from our 2022 Annual Conference.

Bore da pawb a croeso cynnes i’r gynhadledd.

It’s an absolute privilege to be in the same room with so many of our members, commercial members and other partners who have joined us at our first in person annual conference in three years.

A lot has happened since we were last together.

Back in 2019, we were in the midst of our general election campaign, and we hoped for a period of stability in Westminster. We were optimistic that we might finally discover what the future nature of our relationship with the European Union would be. I'm not sure about you, but my hopes for both of these have been somewhat shaken.

Wales had declared a climate emergency. The tragedy at Grenfell Tower in 2017 had resulted in an increased focus on safety and the importance of hearing the voice of tenants. We were ramping up shared action with partners to end homelessness.

We were also marking CHC’s 30th birthday, reflecting on the conditions that led to Welsh housing associations coming together with a shared clarity of purpose to meet the challenges of the time; and how that same consensus continued to be as vital in the face of the challenges as we then understood them.

And then 2020 came.

Covid-19 changed all our lives, but its impact was not felt equally. It unleashed terrible individual and societal consequences that exposed Wales’ stark inequalities. Whilst the worst of the pandemic is - hopefully - firmly behind us, the legacy of Covid-19 on the nation’s health and the economy remains.

Alongside the aftermath of the pandemic, global challenges are having a huge impact in our homes and on our doorsteps, and continue to have a disproportionate impact for people on the lowest incomes.

Adverse climate events - floods, storms, droughts, heatwaves - are happening multiple times a year - leaving devastation in their wake. The need to decarbonise and reduce greenhouse gas emissions is acute, but progress remains painfully slow.

The impact of the war in Ukraine is being keenly felt here. Intensive work to provide homes and community for people fleeing war is ongoing. Food, fuel and energy costs have all risen sharply. Those dramatic increases in the cost of living already mean that too many in Wales cannot afford to stay warm in their homes, to feed themselves or their families, or to pay their rent and other bills.

The Auditor General for Wales recently described the scale of the cost of living crisis as “hitting the pockets of many more people and placing families who have managed to live comfortably into poverty for the first time”. As well as affecting tenants, we know many of our valued colleagues are facing the same hardships.

The Bank of England has predicted that we are facing the longest recession since records began. Last week’s ONS analysis told us that inflation was at 11.1% - but for low income households inflation was running at 11.9%, and for those in social housing 12.2%.

Experience tells us that those on low incomes will suffer the most, and for the longest, as a result of the cumulative impact of these - already individually devastating - challenges.

The current cost of living crisis is not just a temporary economic squeeze: the consequences have the potential to last generations if we are unable to shield those most vulnerable to extreme hardship.

Last week’s fiscal statement made clear that public spending by the UK Government will be severely squeezed for the foreseeable. Whilst we were pleased to see our calls for benefits to rise in line with inflation were heard, and there was some welcome news on additional hardship payments to help meet energy costs, those on the lowest incomes continue to face the reality of extreme hardship in the coming months.

Despite an extra £1.2 billion for Wales in consequential funding from the fiscal statement, the Welsh Government is facing a real-terms cut to its annual budget, leaving ministers with difficult choices as they try to sustain public services and alleviate the immediate pain communities are feeling.

We know that an investment in housing brings about far wider economic and social benefits than the initial spend alone - £1 invested brings about £6 of wider economic activity. Investment in homes is an important economic lever as we face this downturn.

However, all in all, the outlook is extremely challenging - and the need to take action ever more urgent.

So how can Wales make the progress so desperately needed in the face of these seismic and cumulative challenges? How do we prioritise when need is so great and money so tight?

Housing associations provide homes to 1 in 10 of the Welsh population and they operate in communities across Wales. As independent social businesses invested in the long term success of the people whose homes we provide and the places we work, we have a responsibility to think hard about the part that we can play to help reduce this huge pressure.

That shared clarity of purpose and ambition - that catalysed the beginning of this partnership between housing associations in Wales 33 years ago - has never been more important. But we now need to take that ambition and apply it to the challenges facing people today.

And we have to start with honesty. Honesty about the scale of the challenges and what that means for how we reach our goals.

In recent months, we have begun a challenging, but constructive, “art of the possible” conversation with our partners in government. One that is based in reality - the reality of the cumulative impact of competing demands on housing associations’ resources. Through it all we are seeking solutions and consensus on how we can prioritise the measures that make the most difference - both to the people who live in our homes now, and those that will in the future.

Our work on behalf of our members to respond to the consultation on the refreshed Welsh Housing Quality Standard is a prime example.

Across the sector we have long held a shared ambition to play our full part to limit global warming to no more than 1.5°C by 2050 by achieving net zero. Many of you have seized the initiative and pursued ground breaking, innovative solutions of your own, as well as adhering to the strict environmental and energy efficiency standards set by the Welsh government.

That ambition was matched in the draft standard, and the principles set out are exactly what we want to see adopted in Wales. In the immediate term, we know that reducing the costs of running a home is one of the crucially important ways that we can buffer some of the impact on individuals and communities across Wales.

But as we all know, the proposals laid out in the consultation document are simply not deliverable. We need to chart a course to the energy efficient homes Wales needs that is rooted in reality.

We want to see initial investment prioritised to support fuel poor households, and further investment over a truly deliverable time period that will allow the supply chain in Wales to scale up alongside demand.

We must take action to protect communities from the worst impacts of the crisis now, whilst building Wales’ capacity to reach our shared goals on decarbonisation and to reap the full economic and social benefits this investment can yield.

We now await the government's response to the WHQS consultation, which is expected in late December.

However, the challenge we posed through that exercise - that we need to think very differently about how we reach our shared goals - remains live in all our discussions with the government and our wider partners.

When the Minister announced the delay to implementing the Renting Homes (Wales) Act earlier this year, she reflected on the unprecedented pressures faced by landlords, and the need to ensure the right systems and processes were in place to support tenants, and ensure they understand their rights within the new framework.

In this environment, recognising that the challenge has changed and that we need to reprioritise how we invest and where we focus our collective energies is crucial. It represents an understanding that the rising cost of living is the biggest challenge facing tenants today and into the foreseeable future.

In these most challenging of times we need to continue to speak out boldly and to hold firm to our commitment to doing things right. And as we hold others to account, we must leave no stone unturned to hold ourselves accountable for the services we provide to tenants who live in housing association homes.

The tragic news of Awaab Ishak’s death, caused by exposure to mould in his home, has shaken all of us. Our deepest sympathies are with Awaab’s family as they go through this extremely difficult time.

That a two year old child could die in the UK because of the condition of his home - the place that is supposed to be the safest of all - should be unthinkable. The coroner herself asked “How in the UK in 2020, does a two year old child die as a result of exposure to mould?”

Awaab’s family and other professionals repeatedly reported their concerns about mould to their landlord, but it was not addressed. They did what we ask - to talk to their landlord - but action was not taken.

We must never allow processes and systems to get in the way of listening and doing the right thing.

As housing leaders, workers and campaigners, we must work to ensure that our shared message - talk to us, we will help - is seen, believed and made real for tenants and communities.

The coroner’s report sets out the process and systems failures that contributed to inaction. I know, as leaders, you are all reflecting on the lessons of this tragedy and examining your own policies, practices and systems to ensure nothing like this could ever happen again.

While the latest Welsh Government statistics show that Welsh housing association homes continue to be brought up to a good standard by social landlords, we must relentlessly strive to make sure all our homes are safe, and a tragedy like this can never happen again.

This is a tragic event that brings together leaders in the Welsh housing association sector - at both Board and Executive level. I know that many of you will be asking yourselves whether your culture is one that encourages tenants and staff to speak out when something is not right and one where they can be confident that action will be taken as a result.

I know you will be checking and rechecking your systems and processes to make sure that they give you assurance on the quality of your homes and if something is not right that you will move swiftly to resolve it. I know that you will agree that the quality of our homes and the way we listen and respond to our tenants is a crucial leadership and governance issue.

Through all conversations we had with the government and partners ahead of the rent settlement this year, we sought to strike the right balance between affordability for tenants, and the ability of social landlords to maintain investment in vital support services and in existing homes to keep them safe, warm and affordable to live in.

This year’s rent settlement - whilst we know it is in reality a real terms cut - has given much needed financial space to protect and maintain the vital services and quality homes that our tenants rely on.

The rent setting process you are all about to embark on is a key opportunity to continue to build trust with tenants, as you work with them to understand affordability and their priorities for their homes, services and communities.

It is also a time to continue to build trust with the government and other decision makers. In recent months you have all played a huge role in sharing our progress on affordability, speaking with politicians and officials to build understanding of the rigour and care with which housing associations set affordable rents.

We have a substantial opportunity in the coming months to help shape a shared, consistent approach to assessing affordability across the social housing sector in Wales.

For a government to allow landlords to locally determine rent levels, they have to be absolutely confident they will do the right thing. We must all continue our work to talk to tenants, politicians and partners about our work on affordable rents, sharing our learning and progress, reflecting honestly on our challenges, to build the deep levels of trust and understanding needed to seize this opportunity.

This summer, we commissioned a stakeholder reputation audit with members of the Senedd, Welsh members of Parliament and local authority housing cabinet members, to understand how housing associations are perceived by key political stakeholders.

We will be sharing those details with you in the coming weeks, but I want to take the opportunity to share some encouraging findings: since our last audit in 2019, trust in housing associations appears to have improved on a number of key issues, including affordability, value for money, prioritising tenants and transparency.

This is a strong indication that the work done by the sector over recent years is visible and appreciated.

We have much more to do together to build understanding of the huge contribution housing associations can and do make to communities across Wales, but I’m pleased to be able to share that we are making good progress on the course we set.

This year's rent settlement is also notable in that for the first time the commitments we reached run both ways. The government has committed to a review of the standard viability model in light of the rent settlement and the challenging operating environment. They have also committed to review the serious additional pressures faced by our members who provide vital social care services.

I am struck by the spirit of shared endeavour behind this year's settlement. It is recognition of the role that good quality housing and support plays in helping people to live healthy and fulfilled lives, and it represents a commitment on all sides to work together to do as much as we can with the resources available to us.

In recent years we’ve campaigned for and secured record breaking investment in housing and services - almost £2 billion in capital and £700m in revenue investment for housing and prevention support - that can make a huge difference - but only if we are smart about how we invest it.

We think that we need three things:

First - a more agile and pragmatic approach to funding so that we can be responsive to the dynamic and challenging environment we find ourselves in.

We have seen some real progress here with the Transitional Accommodation Capital programme and a move to programme funding via the Optimised Retrofit programme. We would like to see this pragmatic approach rolled out more widely, to enable us to move money to make the biggest difference to increase the accessibility and quality of social housing.

Secondly, and absolutely crucially in the current environment: a reinvigorated focus on prevention.

We know this is difficult during a crisis. But it is because we are in a crisis that we need it. Only by protecting investment in prevention can we help ensure that the consequences of the current crisis do not last for generations.

Proper upstream prevention through support and investment in existing homes is the way to provide real help and support as well as reducing pressures on the NHS and local government.

Making a case for money right now is not easy but we do think that there is much more to do and will be making the case for greater investment in prevention funding, like the Housing Support Grant, in the run up to the budget at the end of the year.

And finally, we need a long term investment programme.

Building homes has never been more difficult in Wales. There is much to do to unblock the immediate barriers that are slowing down and halting development in some areas.

However, in our rush to do this we can't forget that unless we find a way to ensure that our approach to tackling the climate and nature emergencies is in lockstep with our efforts to tackle the housing crisis, we will be trapped in a cycle of short term measures that only get us so far.

There has simply not been enough action to put in place the building blocks to enable this. We need a long term and funded strategy to support us to decarbonise existing homes, which creates jobs and training opportunities and supports Welsh SMEs, alongside investment in environmental management that enables homes to be built where they are needed across Wales.

As your trade body, we are considering this challenging context and reflecting on our mission to connect and represent you. Following conversations over the summer, we are developing our next corporate plan and considering how we make sure we are in the best possible position to advocate for you and support you.

Whilst plans are drafted, we will have other chances to discuss and refine the details with you, but in the coming months there are a few things I’m already sure of. The scale of challenges we’ve seen in recent years shows no sign of abating - we will find new ways to be agile and responsive, to bring people together and work at pace to develop solutions.

We will continue to showcase the difference you are already making - building trust and understanding with our partners, and supporting you to strengthen your partnerships locally.

We will continue to speak out boldly and without fear or favour, and create an external operating environment that makes it easier for you to make the biggest difference you can to tenants, and the people and places where you work.

That clarity of purpose that brought us together 33 years ago has never mattered more. Whilst the challenges facing us are substantial, we can and must continue to make progress towards a Wales where good, affordable housing really is a reality for all.

Thank you all for your continued support. I hope you have a fantastic conference.

Diolch yn fawr.