To be or not to be a Registered Provider?

Friday 01 February 2019

Blog by Andrea Jones of Brighton & Hove CLT

I’m not going to start this post by explaining what being a Registered Provider with the Regulator for Social Housing means and involves since there is plenty of information out there about this. I am just going to briefly tell the story of why we started out assuming we would not become an RP and why we have now changed our minds.

I do need to explain that Brighton & Hove CLT is a city-wide CLT, which is fairly unusual. It exists to:

  • make community led housing accessible to more people in Brighton & Hove

  • provide an alternative for people who are trapped in the private rented sector, which is one third of the city’s population

  • hold land in trust for community benefit in perpetuity.

We run a programme of CLH support that is funded by the first wave of MHCLG Community Housing Fund money given to local authorities in 2017 to tackle pressures created by high rates of second home. We submitted a business case for how this money could be best spent to Brighton & Hove City Council and they awarded us the whole of their allocation to set up and deliver a Hub of support. We currently support 15 active CLH groups.

Why we assumed we would not become a Registered Provider with Homes England

The first reason was we didn't want to duplicate existing provision. Housing associations provide social housing and our reason for being is about creating something different to social housing.

We didn't see the point in competing over funding with other organisations that are already invested in creating social housing, which we support. In other words, we didn't want to slip into becoming a new generation of small Housing Associations, with all the associated problems, including right to buy.

Another reason was about being genuinely community led. We didn't want to sign up to anything that would limit the autonomy of our community led housing groups and their schemes. Tom Chance described these concerns in his blog post promoting RP status back in September 2018 . Brighton groups are mostly seeking to take back control over the design of their homes and communities. If we became an RP we thought the groups wouldn't have the scope to design and run their own schemes and live in the ways they wanted to.

It was also about the ability to innovate. CLH is about developing new and innovative forms of both housing and ways of organising and living and being expected to conform to the expectations of a state agency didn’t’ seem to bode well for truly innovative developments.

The simple fact of Homes England counting success by the ‘number of units’ was evidence of how stifling of innovation the culture of HE was likely to be and how far removed it is from the creative ways that CLH groups are tackling the affordability crisis in our city.

The final main reason was that we didn’t want to become a fully-fledged organisation unless we were needed. We wanted to avoid building an empire for its own sake. We have run the Brighton and Hove support programme on a shoestring keeping super-light and lean in our overheads: we run a team of 6 part-time advisors and enablers with no office, extremely efficiently, so that the money we received is focused directly on the CLH groups and the schemes. We knew that becoming an RP would involve an increase in administration and overheads and we only wanted to do that if there was clear evidence of a need.

Why we changed our mind?

In a nutshell the cost of land and properties in Brighton and Hove makes it virtually impossible to deliver genuinely affordable housing without some grant. The evidence of this in Brighton is already abundant so I won’t repeat except to say how house prices increased 43% in just 5 years compared with 7% for wages (between 2011 & 2016).

We have explored a range of financing strategies with ethical and commercial lending being our backbone, supplemented by social finance investment and raising money within our communities of support, but it will just be too slow. We have explored becoming a charity, but it doesn't sit well with our principles and our approach which are about self-sufficiency where possible, mutual support and solidarity.

We don't see the people in our CLH groups as ‘beneficiaries’, we see them as resourceful and innovative people facing huge challenges in a deeply flawed housing system and our job is to work alongside them to overcome the obstacles. We have explored partnering with a Housing Association, but the big ones won’t return our calls and the smaller ones seem to be struggling with their own futures.

Being an RP gives us the extra advantages that we need in a city like ours. Property and land purchases for RPs are exempt from Stamp duty (as they are for charities); on one project of ours costing £1.7 million that is a £100k saving! It opens to door to competing for certain Section 106 opportunities arising through local planning and we can see that we can provide a unique role in this, where we can meaningfully connect development opportunities to local people in housing need and involve them, instead of superficial consultation processes.

We need to have a wide range of strategies for raising funds and being an RP – being regulated and conforming to RP standards – is likely to make BHCLT more credible to lenders, investors and some of our supporters.

The other challenge is the speed at which you have to act if you want to secure a property or land deal in Brighton and Hove. Viability could be achieved if we can get in early, before planning permission is secured on properties or sites. But there is a swarm of property developers from around the world (yes, really, even on small sites) geared up to grabbing the profit from planning gain.

To compete in it we have to be able to move as fast to offer the cash as they can. No tall order. That’s why we need to grow our own ‘war chest’ of finance. We could achieve affordability if we could just close the deal on some properties and land because our groups are SO creative in the ways they build and live together once we have those in place. We have realised that our role – as an umbrella CLT for the whole city – is most useful doing this high-risk shark-fighting work in the property and land market on behalf of CLH groups.

In the end, we have decided to go down the route of becoming a Registered Provider because it seems the only way we can enable our groups to deliver their schemes more quickly with – hopefully - the minimum possible impact on their ability to run their own lives and create innovative solutions.

Building an organisation that is close to grassroots CLH groups and can grow its ability to secure properties and land is the only chance we have of making progress in a mad local market. We are doing it so that we can enable diverse kinds of people to stay living in our city, including the key workers that we all depend on.

Learning from others

We have talked to lots of useful people along the way: the people from Bristol and Heart of Hastings CLTs have been brilliant, Tom Hopkins from CCH has pointed us towards learning from existing ‘parent’ RPs; Anthony Collins have given us some advice pro bono; Blase Lambert from CCH allowed us time to discuss with other CLH enablers across the country at Trafford Hall this past weekend in January.

We are hopeful that we can do this and stay true to our objectives. Maybe we can all work positively with The Regulator to create a new style of smaller RPs that deliver something new and exciting. Keep you posted on how it goes!

The Brighton & Hove Community led Housing Programme team

 

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