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TAI 2016 preview: Mutual support

In the rush to City Deals and the Northern Powerhouse, how can small local housing organisations and their workers and tenants continue to have a say over their future? Mike Owen and Gareth Swarbrick make the co-operative case.

George Osborne’s 2016 Budget announced a new £1.2 billion Capital Region deal for Cardiff and the surrounding hinterland. South Wales is following the lead of Greater Manchester in creating a city region devolution deal.

Ten local authorities from Bridgend across to Monmouth and the valleys will be given greater freedoms and flexibilities to grow the local economy. The UK Government’s professed goal is to give these city regions the power and flexibility to develop their own local approaches to driving economic growth across conurbations and with it to counter balance the economic power of London and the south east.

Greater Manchester and the so- called Northern Powerhouse is the most advanced of the English regions, having just seen its third devolution deal announced in the Chancellor’s Budget as well as last year’s devolution of a £6 billion a year health and social care budget.

A huge challenge for these city regions is to continue to drive economic growth whilst making sure that the wider regions benefit and that towns, neighbourhoods and people are not left behind. The sums being talked about are enormous and for Wales there is potentially £3 billion under discussion. The challenge for housing associations is to have a coherent offer to Government and the key decision-makers – to be part of the change. The speed at which these proposed ‘deals’ are moving
in policy and governance terms is frighteningly fast. In South Wales the proposals are being developed by powerful local authority leaders pulling councils and councillors behind them. Nobody can afford not to be part of this but what can relatively small and local housing associations offer?

The mutuals at Merthyr Valleys Homes and at Rochdale Boroughwide Housing were about people beginning the process of taking back control with housing as the starting point. So where do these organisations that offer local control and a new way of doing business fit? How can they offer can they offer anything to a shiny city regional deal with new economic paradigms? How can they deliver greater home ownership? How can they work with large regions that want to want to work with risk takers and big housing organisations with plenty of free reserves and strong assets bases?

There are some stark similarities between Greater Manchester and the valley regions of south Wales. Cardiff and Manchester are both strong, growing cities with employment, commercial and property growth in the both the city areas. There has been an explosion of apartments and commercial developments whilst the hinterlands of both cities remain challenged. This is particularly the case for those boroughs across the northern arc of Greater Manchester. Rochdale and Merthyr Tydfil could have been twin towns. Rochdale was the birthplace of the co-operative movement and Merthyr Tydfil was the home of the labour movement, both in their time strong industrial towns. And both are a short commute from the centre of the bigger cities.

It is obvious that a Treasury that
is headed up by George Osborne
will not be interested in offers from housing associations of more rented housing and for the replacement of older obsolete properties or even special higher SHG to kick start local projects. It wants new offers and sees this economic growth being delivered through an economy that is not reliant on the state and where benefit levels are an irrelevance as everybody is working. Housing providers need
to respond to this but in terms that will deliver real results in the localities they work in and for the communities they serve.

One of most important developments in housing association governance in recent years has been the emergence of a new mutual model – which brings together tenants and employees as co-owners. This model has been pioneered in Wales by Merthyr Valleys Homes following in the footsteps of Rochdale Boroughwide Housing. This mutual approach to housing organisation has been about breaking down the barriers between provider and recipient and developing a new economic model in which tenants and employees share power and work together to deliver on common goals and objectives.

Merthyr Valleys Homes took the decision to become a mutual for this very reason. So many households are so far away from having any control over their lives. For some households every decision is made for them, from health, through education to welfare and housing. From the cradle to the grave might have been the clarion
call for the post war years but many people have become alienated from the state and from society. They do not see it a state working for them. They have no say in this system that manage their lives. Merthyr is changing with more tenants of working wage now in work but in receipt of benefits than not in work.

Rochdale Boroughwide Housing became a mutual in 2012. It is now working with over 20 other housing providers in Greater Manchester
to shape and help deliver Greater Manchester’s approach to both growth and the reform of public services. Housing providers are working with
the Greater Manchester Combined Authority on a Memorandum of Understanding setting out how this will happen. Within this context Rochdale Boroughwide Housing is seeking to strengthen its role as a community anchor organisation reaffirming its commitment to Rochdale – its people and place. This means asking serious questions about how in tough and austere times Rochdale Boroughwide Housing can maximise its contribution at a local level whilst offering
something to Greater Manchester-wide developments. Tenant and employee members at Rochdale are at the heart of this conversation – being played out as they reduces their annual running costs by £6 million following the central Government imposed four-year rent cut.

One of the lessons from the economic growth across London is that it has not been uniform and has not benefited every community. Many London boroughs have super output areas where poverty and deprivation are still some of the highest in the
UK. It is therefore critical that people who are living and working in the communities that are furthest from the new economies of the city regions have the best chance. One of the
risks of devolution is that growth
is concentrated in city centres and increased inequality is the result.

Tenants and employees at Merthyr are designing their new corporate vision and as in Rochdale it will seeking to bridge the gap between top down macroeconomic solutions for a region and giving local people control. Merthyr Valleys Homes

has already got evidence that
inward investment does occur at greater rate when we invest in our neighbourhoods. Over the last five years houses prices in communities like Gellideg, Trefechan, Mandeg and Gurnos have all increased at almost double the rate for the borough. RBH is working hard to ensure
that its investment programmes support wider economic investment particularly in central Rochdale itself.

In Merthyr and Rochdale this
new mutual way of doing business
is an opportunity to bridge the gap between the region and the people living and working in some of the
most challenging neighbourhoods. Together tenants and employees will continue to design better and more efficient local management, influence on the capital investment and ensure that inward investment continues to add value. They will continue to link training and apprentices to the people that will benefit from them the most. Mutuals can not only help bridge the gap but will also allow the voice of their members to be heard at this new city region level.

Mike Owen is chief executive of Merthyr Valleys Homes and Gareth Swarbrick
is chief executive of Rochdale Boroughwide Housing. They are speaking in the session on ‘Our mutual friends – co-operative and mutual housing’ on Day 1 of TAI

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