Planning in uncertainty: interview with Mary Taylor of the Scottish Federation of Housing Associations

Mary Taylor, Chief Executive, Scottish Federation of Housing Associations - Image credit: SFHA

Mary Taylor laughs heartily when asked if there have been many changes in the environment in the nearly seven years she has been chief executive of the Scottish Federation of Housing Associations (SFHA), as she looks ahead to her retirement later this month.

She replies: “I love the job, because I believe in the work of housing associations and I think we do great things, so that’s never been the issue, but the environment that we work in has changed; I wouldn’t say out of all recognition, but quite dramatically.

“Things were pretty safe until 2010 and austerity has hit both the capital side of the business and the revenue side of the business and it’s meant that people in associations are, if they’re thinking ahead, having to respond to the changes in the environment, and the danger is some aren’t thinking ahead and they think it’s what it was, but actually, they have to adjust to a new world.

“And our job is to look ahead and see where those changes are coming from and both alert people or push back on some of the ones that are unhelpful or shape them to make them constructive, but also, to equip our members with an understanding of how they might need to adjust their approach – and far be it for me to ever tell them what to do, because they will decide that for themselves.”

Taylor mentions a press manager at SFHA who described the organisation as ‘the meerkats in the sector’ – “so, you know, we’ve got our heads above the parapet looking out to see what’s coming next, because people who’re getting on with the day-to-day job aren’t necessarily in a position to do that, and that is part of our role, I think.”

One of those things that the SFHA is concerned about is Universal Credit, which Taylor describes as a “potential train crash”.

The system for running it is a particular area of difficulty. In an odd twist, the ‘live’ system that was used in the early trials is not being used anymore and lessons learned not transferred to the ‘full’ system that is being used – but is not complete. She says she’s a fan of Kafka – and just as well.

Taylor explains that members who have been involved in initial trials of Universal Credit have said it is worse than it was a year ago.

However, they are having a dialogue about it at a senior level because they can’t wait until rental income and cashflows are affected. She has hope and a belief that they will get through in the end.

However, she is keen to see a DWP system in place where the housing element of Universal Credit would be able to be paid directly to landlords, as the Scottish Government has promised once the power is effectively devolved.

Taylor says: “That’s very difficult to achieve under the non-devolved Universal Credit system and you have to wait: the tenant has to wait for their assessment, the landlord has to wait until the tenant’s in arrears after they’ve had their eligibility statement, and that can really rack up weeks and weeks and weeks of arrears, and the only thing that’s good about it is it’s on a very small scale at the moment, but on a larger scale it would be…well, that’s why I go back to the point about the train crash.

“And that then feeds into all sorts of other things about what the sector is there to do, around support to people and building new homes and remaining viable and all of that.”

Rental collection rates used to be 98 per cent and now with welfare cuts they have dropped to 77 per cent – and below 77 per cent in some cases. “If that was to be replicated on a scale, that would impede our capacity or constrain our capacity hugely,” says Taylor.

And that affects another area that Taylor cites as challenging, which is the aim of building 50,000 new affordable homes, a key housing commitment of the current Scottish Government and one that the SFHA and other housing organisations pushed for ahead of last year’s Scottish Parliament election.

Taylor says: “We’ve been saying for several months now that we’ve identified a number of obstacles.

“The appetite to deliver is very clearly there. People recognise the need. They welcome the investment and the rate of the investment, but trying to achieve that target in the context of cuts to local government and Brexit, which could affect materials and labour, is quite difficult.

“Those contain the seeds of delay and inflationary pressure.

“Speaking personally, I would always rather see a system that consistently, steadily invested in a new supply of housing than bursts of activity followed by periods of famine.

“What we have at the moment is feast and famine, so we’re recovering from famine due to a drought of investment. It’s not that easy just to turn the tap on again and expect everything to flow.”

She describes problems across the sector with not having the right people in the right place with the right skills at the right time – from bricklayers to electricians and planners – and the time it takes to train people to the correct level, with Brexit threatening the ability to get the skilled workforce from elsewhere.

She also mentions a trend towards modular construction, with components manufactured offsite to minimise time onsite, where weather can affect progress.

“But that requires plant. It’s not just a case of getting a ton of people with building skills onto a site with all of the right materials.

“It requires prior investment, and prior investment requires a degree of confidence about somebody being willing to buy what they’re investing in ultimately, and that confidence isn’t there. 

“So if the confidence isn’t there, then they don’t invest, so you don’t get the benefit of some of the economies of scale that could be achieved by more modular construction.”

And Brexit doesn’t just affect new build, but also repairs and parts, with inflation-making components – for example, lifts that are built in Germany – shooting up in price.

A third area of concern is that last September, the Office for National Statistics (ONS) announced that housing associations were to be classified as public rather than private organisations, which they have been since 1987. At the moment, the Treasury is delaying acting on the ONS decision, but can only do so for so long.

The long-term consequences of a change to public classification, says Taylor, would be “almost unthinkable.” It would mean the borrowing of housing associations would have to be placed on the national accounts.

With the subsidy for social housing only running at about 50 per cent, classing the other half as public borrowing would constrain associations’ ability to borrow to deliver new housing. Taylor says it would make it “virtually impossible” to tackle the supply problem.

Housing minister Kevin Stewart promised at the SFHA conference last year that he would take steps to reverse it in law and it was included in the Programme for Government, with Taylor expecting a bill on it soon.

She says: “I would love to be leaving knowing that that was done, but I’m confident that people across the parliament understand the importance of having associations classified as ‘private non-financial corporations’ – [which] is the technical term – and that they will speed the progress of any legislation to enable that classification to be reversed.”

In terms of what she is proud to have achieved within the SFHA, she says it’s been leading the organisation through a programme of modernisation to make it “more forward-looking and more agile in response to a turbulent environment” and identifying the key issues without being side-tracked by smaller distractions, although she’s keen to highlight that has been a team effort.

Externally, it has been trying to bring the varied members in the sector together.

“In that respect, what we’ve done is allow the sector to focus on the things that it has in common, not the things that divide.

“I would like to think that I have left a united sector behind. There are still special interest groups that think they can plough their own furrow, but our focus is on the things that are common to us all and the basis of our strength as a sector.”

After seven years, it must be hard to leave at a time of such uncertainty and challenge for the sector. What does she hope to see after she is gone?

“My hope is that some of the uncertainty, some of the things we have uncertainty about, will start to resolve.

“If you approach things with a view, a positive attitude towards problems solving, you can solve just about any problem.

“If you throw up your hands and sit back and think, ‘Well, nothing can be done,’ well, then that’s when failure will start.

“But planning in all that uncertainty is really difficult. But people need to see what can become clearer sooner, and that’s economic, it’s political and it’s constitutional.

“The other thing that I would hope for is that the Scottish Parliament continues to recognise the importance of housing and the importance of communities engaging with the housing associations that operate in their areas, whatever scale they’re on, so that housing associations remain connected to those communities.”

The SFHA was at the party conferences in the spring asking people, including MSPs and party leaders, to have their picture taken with a little house saying ‘I value housing associations’ and Taylor says they got a great response.

“I’m very clear from a survey we did last year that MSPs recognise the importance of housing associations in particular and what I would like to see them do is to make sure that they sustain that commitment and they engage with the housing associations who operate in their areas and they support them to do what they’re capable of – which is a lot.

“But not on thin air. I come back to that point. It can’t be done on thin air.”