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Housing body in need of shake-up

By John Simpson

Published 19/03/2013

The future of the NI Housing Executive is under scrutiny
The future of the NI Housing Executive is under scrutiny

The future of the Northern Ireland Housing Executive (NIHE), or its successor institutions, is now being scrutinised. An informed debate on various alternative options is needed.

The Programme for Government has set the challenge that proposed changes in the provision and governance of social housing should be in place by April 2015. Ideally, this should mean that all the preparatory steps, the design of a new ambition for social housing, the suggested financial framework and the necessary legislation should have been taken through consultation into an orderly operational plan.

This is a complex series of changes which must follow a coherent sequence. In an over-lapping development, the Department of Social Development will also be implementing the welfare reforms, including the introduction of universal credit and the revision of housing benefit.

The NIHE, as a major provider of social housing, has served Northern Ireland well.

With the passing of time and the accretion of a range of indirect related functions, the NIHE is currently charged with too wide a range of functions and has a reporting and financial structure that is far from fit for purpose. There are strong arguments that its landlord functions should be separated from responsibilities for inspection and regulation of social housing, independent assessment and the setting of rents, and policy on housing allocations and housing need assessments.

The current reporting arrangements, reflected in the annual report of the NIHE, mean that even an interested observer cannot get a clear picture of the accounts of the NIHE as a landlord. The accounts aggregate many different strands, some only indirectly linked to housing.

A deceptively unhelpful suggestion would be to split the NIHE as a landlord from other functions and then reconsider its landlord operations.

The minister, Nelson McCausland, has been somewhat reluctant to outline how he sees the reshaping of the landlord function after it emerges from the NIHE.

The potential reorganisation of the NIHE, or its abolition, offers the scope to set up new social housing groups with a more ambitious social remit based on financial criteria where the new groups have a defined capital base and a realistic budgetary framework. Any new housing association(s) would negotiate the transfer of responsibilities and the financial expectations. The difficult part of this negotiation will be between Mr McCausland and the Minister of Finance Sammy Wilson: what capital value will transfer with the assets, how will any new association fund the transfer (with what Government funding guarantees), and how will Sammy Wilson deal with any variation in the repayments due on the outstanding £500m NIHE debt to the UK Exchequer?

There is an important parallel development. Mr McCausland has vowed to set up an independent Rent Assessment Panel where the minister will set parameters within which the panel works but then the recommendations of the panel will be implemented.

Currently, rents for NIHE tenants are relatively low compared to rents in other social housing. The financing of the new social housing associations will be a critical factor in making the new arrangements acceptable and viable.

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