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13 February 2014

Social housing is a key public service in Wales

Article from Wales Online:

Cardiff's Ocean Way provides an unlikely backdrop for a discourse on Keynesian economics.

At the office of the Community Housing Cymru Group, formed in 2010 to jointly champion not-for-profit housing, care and regeneration, chief executive Nick Bennett is delivering his own interpretation of the great economist’s doctrine.

“We need to be reminded of the link between housing and the broader economy,” he said surveying a table strewn with expired coffee cups suggesting some serious discussions have recently taken place.

Warming to his theme he added: “The Keynesian view is that if government wants to see an increase in jobs and growth – and we certainly want to see this in Wales where we have GDP per capita at the lower end of the UK regional scale – public investment in infrastructure, social housing and transport is the best way of kick-starting the economy.”

After a pause for reflection he said: “We are grateful that the Welsh Government has been receptive to this message which is why we have received a further £30m of public funding this year, plus an additional £4m which will continue for the next 30 years to help service the new, innovative Welsh housing bond.”

Having sat on the Williams’ Commission which recommended a major streamlining of Wales’ local government structure earlier this month Mr Bennett is quick to point out that social housing is a key public service in Wales.

He said: “If we get this right it has an impact on important areas like education since children will suffer scholastically if they don’t have a decent home, while the same is true of someone returning from hospital to a below-standard dwelling.

“In terms of the Williams review the driver there was around excellence in public service delivery and we need to be delivering quality education to ensure Wales climbs back up the educational ladder and in terms of healthcare provision is ready for the increase in an ageing population.”

Here he throws in an economic statistic in support of this contention.

He said: “We expect over the next 14 years that there will be a 30% increase in those aged over 65 whereas most economists predict that public spending will be roughly what it is now. So demand will go up while our capacity to deal with that demand is constrained.”

Business and good housing, he believes, are essential elements in economic regeneration.

To this end the Community Housing Cymru Group is working with two subsidiaries, one of which is the CREW Regeneration Wales, which raises the question: what makes for regeneration excellence?

He said: “Through our members we are spending half a billion pounds a year on this. But how can we regenerate without having that partnership with business?

“Businesses need well-qualified people whether it’s to attract inward investment or for developing indigenous firms. Both need people with skills who are numerate and literate which emanate from the housing environment.

“Our members are interested in delivery which is why we continued to build more than 2,000 houses a year when house construction in Wales fell from 10,000 per annum before the credit crunch to barely 4,000 at the peak of the recession.

“Now social housing providers continue to build 2,000 homes per year and soon the Welsh Housing and Regeneration Minister [Carl Sergeant] will be asked to consider what more we can do to increase the supply of housing needed so much in Wales.”

For many communities in Wales, Mr Bennett said, economic conditions are still depressed. He said there is a need to invest more in social housing – ensuring that new opportunities for training and employment in the most disadvantages communities are generated. In helping achieve this the housing sector spends £1bn a year, half of which is spent on regeneration with 80% of that being retained within the Welsh economy.

Defining those areas of training he would like to see to see he said: “Our members work with companies to make sure there are new skills coming into construction industry. This provision has been important since over the past five years the construction of new dwellings fell so sharply.

“More than half has been provided by housing associations so we have to ensure that we work with sector skills councils to make sure that when growth is established there are no skills shortages which would only contribute to housing inflation.”

His remedy is: “We need to be increasing supply which would eliminate housing bubbles, correct house prices and help young people get on the housing ladder.

“The need is to make sure we don’t see skills gaps emerge as the economy bounces back. If that happens then there is inflation in the construction labour market which feeds through into the cost of construction.”