Nick Bennett says social housing has a unique capacity to lever in private sector funding
The social housing scene in Wales has changed dramatically over the past five years with an influx of yes votes for local stock transfer ballots. As a result the wider economic impact of the sector has continued to grow, even in these austere times. Welsh housing associations are mature social businesses and, as the findings of the latest report on their activities by Welsh Economic Research Unit at Cardiff University suggests, they have the ability to assist Welsh communities to emerge from austerity.
This is the second of a new series outlining the potential impact major investment projects can have on the Welsh economy. Tomorrow Peter Hain makes the case for the Severn Barrage. On Saturday we look at a major new £250 million sports project for the Heads of the Valleys.
The independent report, commissioned by Community Housing Cymru, notes that 1,973 new affordable homes were built in 2011-12, more than a quarter of the 7,500 target set by Welsh Government. The Social Housing Grant was used to build 73 per cent of those 1,973 new homes. In 2011-12 the Grant’s budget grew from £69.2m to £96.9 million, with additional funding coming from the Economic Stimulus Package and other Welsh Government reserves, internal transfers and receipts.
However, with a predicted 40 per cent cut in investment over the coming years, production could fall to around 850 homes a year. Critically the social housing sector is the only area of major capital expenditure which is levering in so much additional private sector investment. If current investment is not sustained, we are in danger of failing to reach the 7,500 target.
Bricks and mortar aside, providing good quality housing also has to be matched with improving social and environmental conditions in order to ensure that residents enjoy a high quality of life. Matching housing aspirations with improvements in employment, health and education are all part of the wider regeneration process and Welsh housing associations are playing a key role.
The Economic Research Unit report demonstrates this. Welsh housing associations spent £951 million in 2011-12. This was an increase of 16 per cent from the previous year and almost 80 per cent of that spend was retained in Wales. The amount spent regenerating Welsh communities also increased to £493.2 million, up 14 per cent on the previous year. Of this spend 57 per cent was allocated to repair and maintenance to bring housing association properties up to the Welsh Housing Quality Standard (WHQS).
The contribution the sector made to employment also rose, with 7,500 people directly employed by a housing association. For every direct job provided, almost two other jobs were supported by the sector. In 2011-12 this amounted to 20,200 full time equivalents across Wales, a rise of 15 per cent from the previous year.
If Wales is to recover economically, policy makers need to invest in housing. By investing in our sector – a sector with the ability and track record to deliver – we can build our way out of recession and create hundreds of jobs in the process, while increasing supply to ensure that the people of Wales have access to secure and affordable housing, in communities where they want to live.