Minister for Communities Deirdre Hargey has responsibility for housing policy. Her inheritance is a confusing, expensive and heavily subsidised NI Housing Executive. Because NIHE needs to draw heavily from the public sector budget, temporising decisions are being made year on year.
The minister has postponed a modest rental increase to tenants from April until October. She has drawn attention to a five-year period when rents have been unaltered - good news for many of the 88,000 NIHE tenants. It has been less welcome news to the Stormont budget. The deferred adjustment to rents has drawn on funds that might have been available to improve housing or for other public services.
Increased public sector housing provision in NI is a necessity. There is a strong social need for a larger public sector housing programme and, in parallel, a housing regeneration programme. As the NIHE has shown, its inherited financial base means that there is a serious risk that thousands of NIHE properties will fall into serious disrepair.
The scale of the budget problems for the NIHE has been growing for many years. In major part, the deficit gap has been created by large inherited borrowed funds from the Treasury, routed through Stormont, for which the terms of the loans, carrying what by today's standards are high interest rates, have become more expensive in relation to the ability to make repayments from rental income.
The business ambitions of NIHE need to be redefined to give more momentum to meeting housing needs, modelled to respond to social criteria, on a stable financial base. The current ad hoc management of finances needs to be replaced by a restructured financial base which can be self-financing and gives a budgetary rulebook where housing management and new house building can be delegated responsibilities.
The minister and her Executive colleagues face a serious and growing problem which is likely to get worse unless a major restructuring is used to create a sustainable organisation. In the recent Stormont proposals a missing idea is a suggestion that (in line with comparable ideas in England) the inherited borrowing from the Treasury for housing should be written off. This proposal would sit comfortably alongside the mitigation proposals for other social security schemes.
The reform of housing policy here was examined at some length in a report by Dr Stewart Smyth at Birmingham Business School. That report attempts to find answers to the difficult questions of designing a 'new innovative, radical and ultimately equitable housing sector'. Although that report makes some controversial recommendations (some of which this writer with personal experience through housing associations [in which an interest should be declared]), it does serve to make suggestions stemming from an acknowledgement that this is a serious systemic issue.
Dr Smyth is unhappy with a suggestion that housing policy should be financed where the NIHE was given a mandate to be responsible to financially balance its books, as well as provide social housing. However, he suggests that it should have access to social housing (capital) grants so that it could bid for capital funds alongside housing associations.
A once-and-for-all capital restructuring and an extension of the access to capital grants, roughly as for housing associations, would be a formula to revitalise the NIHE. Then, a reshaped organisation could be given a combined remit to build and regenerate the number of available units of social housing and an obligation to pay its way. All the other aspects of social housing policy could be adapted to fit into this new organisation.
With the current arrangements, the NIHE is critically incapacitated. A reshaped set of operational tasks to set a clear development path are awaited.