Brexit leaves domestic policy in the shadows
CIH head of membership Rebecca Clarke reflects on the impact of the uncertainties that Brexit has cast on domestic policy, and urges housing professionals to embrace the challenge that Brexit presents to think differently about how they behave and operate.
“The government cannot be consumed by Brexit. There is so much more to do” – and yet, despite Theresa May’s words bellowing around Parliament ahead of yet another vote on her deal, the government has indeed been consumed by Brexit.
Domestic policy and most importantly the British people are being left in the shadows of what is fast becoming one of the biggest political farces in decades. The country has fast descended into meltdown that has shifted the political landscape. Housing has to have been one of the biggest victims at the hands of Brexit.
Pre-Brexit we appeared to be in one of the most favourable climates, with the emergence of the green paper and government seemingly taking a very active role in progressing and amending housing policy in light of the tragedy at Grenfell and the infamous Rent Reduction Act. There was greater focus across the board, with other legislative changes to things like homelessness. There seemed to be a true appetite to start tackling our housing crisis. However, Brexit has now taken over and any momentum gained has now slowed dramatically.
For us in the housing sector, whilst Brexit has slowed down some of our progress, it is also fair to say it has managed to highlight some of the deep seated and long running issues that many of us have grappled with for decades. I had the pleasure of being on the CAMIP panel recently, hosted by echelon, where it was abundantly clear that the worries concerning the impact of Brexit on the sector were not breaking news.
1. Skills – here at CIH we are acutely aware that the sector is experiencing a severe skills gap. We have an ageing workforce, with many senior leaders due to exit the sector in coming years. Where do we fill the gaps? Where is the succession? In the construction sector, who are pivotal to us being able to deliver the affordable homes that we so desperately need, there is a reliance on labour from the EU. If we are to crash out of the EU with ‘no deal’ we could easily see a situation where there is an end to the free movement of people and much tougher criteria for them to meet. For those migrant workers who come to work on our developments, will they meet the skills criteria to continue working in the UK? Many are suggesting that the UK has been experiencing a ‘brain drain’ effect where skills and investment in growing our own have declined, leading to an over reliance on imported labour. The threat of Brexit and the uncertainty surrounding it have only highlighted this.
2. Supply – back to construction again, but in the middle of the biggest housing crisis since WW2, Brexit threatens to bring a halt to our supply chain. Some materials have as much as 70 per cent of all UK supply imported from the EU. Over 50 per cent of our overall imports come from the continent so it is easy to see where the fear over increased tariffs stem from. The more expensive supplies become, the greater the risk that SME builders whom we used to rely on for over 80 per cent of our developments could go under. Those organisations that are big enough to stockpile and have planned ahead in the event of a ‘no deal’ still have no idea as to whether or not it will be enough.
The risk doesn’t stop there. What about the impact increased tariffs could have on our maintenance professionals and the day-to-day running of our operations within organisations? There is a real threat that we may be unable to access much needed parts for things like boilers and fire doors. The risks attached to this speak for themselves. We are expecting costs to increase for these whichever way the deal goes, so again operational margins will be squeezed, and some organisations could face difficult decisions over things like cyclical repairs schemes.
3. The care sector – many have preoccupied themselves with issues that effect our ability to deliver new homes. For those providers who are still heavily invested in the care sector, Brexit presents another skills threat. In London it is thought that over 70 per cent of care sector workers come from the EU. If the criteria were to change for their eligibility to work here, then again, we could be left with a gaping hole and massive risk to our ability to deliver a quality service to our customers when they need it most.
4. Money – whenever we talk about any of the factors mentioned above, a lot of the arguments boil back down to chronic lack of investment. The declining value of the pound will no doubt see budgets tightened again. What impact will this have on central government funding for local authorities? At a time where councils are looking to develop after the lifting of the borrowing cap and invest more into affordable housing and homelessness prevention, budget cuts will only make this challenge starker. For housing associations, how will cuts impact following the rent reduction coming to an end? The chronic uncertainty attached with almost every element of Brexit makes it impossible to plan ahead and there is a risk that progressive housing policy will come to a complete standstill.
5. Britain divided – the culmination of a lot of these factors will no doubt carry huge potential to worsen the UK divide. The private sector in the big cities like London will become more and more demanding in competing for the shrinking skills base. Where will this leave rural communities or smaller communities in the other parts of the country? The premium on skills and supplies will naturally follow the money and can we as a sector compete with that? Evidence shows that we are already struggling to attract the right talent, and this only looks set to get harder.
Many organisations have hit the panic button and, rightly so, have started trying to prepare for the different eventualities of Brexit. The Regulator recently wrote to all providers asking them to consider the impact that Brexit could have on their operational delivery and their wider business plans. Will they still be able to deliver at the rate they predicted? Will the market still be there? Boards have reacted and started to probe and recent IDAs have also covered Brexit. There is no doubt that we should be mindful and do what we can, but there is a risk that we too could end up mirroring the government in becoming fixated with Brexit and coming to a standstill.
But, one thing to note is that it doesn’t all have to be doom and gloom. Brexit could indeed bring opportunity. It will challenge us to think differently about how we behave and operate as housing professionals. We need to be ethical, keeping our customers and tenants at the heart of what we do. Their safety and quality of service they receive should remain at the forefront of our work. The fact that Brexit has exacerbated some of the longstanding issues within our sector could act as a catalyst for change. We have long known about the skills gap, so now is the time to make conscious decisions to invest the money we do have in our staff and in enhancing our professionalism. No matter what happens with Brexit, social housing and the need for more of it remains exactly the same. There will be much less of a likelihood of a downturn, compared to what could be seen in the private sector. Therefore, social housing should be seen as the safe bet.
If we buck the Brexit trend and portray positivity, share best practice and celebrate our successes in the face of adversity then there is a chance that we could be one of the only sectors to grow. As housing professionals we need to remain true to our purpose, to the people who live in our homes and ensure that we get the best deal for housing out of Brexit, not just for now but for years to come.