Providers need to be alive to the risk of contractors becoming insolvent and how to limit the resulting inevitable disruption.
The Conservative manifesto was dominated by Brexit. There was a firm commitment to leaving the EU, no matter what the end result of the negotiations over the next two years. This is unlikely to change with the involvement of the DUP. The more significant issue is whether those strongly in favour of the EU on the Conservative benches choose to back the government position and, in the very tight margins on any vote, the decisions of a small number of MPs could have huge impact.
Domestically, in the manifesto there was a sense of keeping things ticking over while the focus of government is on those negotiations. A number of proposals in the manifesto were well trailed in the Autumn Statement, so there was some feeling of déjà vu. Details of the manifesto have ‘evolved’ during the campaign, so the core message appeared to be “I’ll do Brexit – trust me” and an implication that domestic policy may shift, in the light of how negotiations with the EU unfold. This must be even more the case now that any significant vote will require DUP support. The fact that Northern Ireland has a boundary with the Republic of Ireland, and so with an EU member, puts Northern Ireland into a different position from the rest of the UK. It will be very interesting to see how they might use their unexpected power to influence the Brexit negotiations to reflect that. Their declared position is for a soft, rather than hard, Brexit.
With such a precarious position and the focus on Brexit, we expect a Green Paper with a long-term plan for social care will be well behind the proposed plan to publish in the summer. It was Theresa May’s u-turn regarding a cap on care costs that did so much to undermine her “strong and stable” message and we can now expect a cap on social care costs to be introduced. Cross-party support for any green paper will be crucial and we hope the new Government interprets the election result as supporting more central government funding to properly fund the increasing demand for social care. Means testing of home care, if this can be passed through Parliament, will lead to fewer home care customers and major issues for those not qualifying; there will be even greater pressure on costs in the coming months. The Care Quality Commission will have additional responsibilities in relation to the health functions carried out by local authorities, which is likely to stretch their resources.
On mental health, we have been acting for clients with mental health impairments for years to get them the rights they deserve; the proposed bill may well be an important step forward and we welcome the attention on mental health issues in the manifesto. Sheree Green, Court of Protection lead at Anthony Collins Solicitors and Chair of the Law Society’s Mental Health and Disability Committee, will play a key part in helping to make the new legislation work.
At least 100 new free schools a year will mean a significant increase in the pace of this programme, which will only add to the growing competition between schools for pupils. We can expect the drive to convert schools into more multi-academy trusts will continue, with the 8% real-terms reduction on school budgets by 2020 contributing to the acceleration of the academies programme. For the majority of schools, financial survival will require collaboration. We will watch to see how far councils get in their wish to establish multi-academy trusts, though there’s no indication that the government may be minded to allow this.
The manifesto also confirms support for selective education, and further funding reform for schools, which will no doubt concern many in the sector already struggling with the impact of the reforms to date.
- New housing
A million homes between 2015 and 2020 in total, and another 500,000 by 2022, have been promised. The number of those homes to be social housing has not been announced. The proposed rent level for those new units is also not entirely clear; the manifesto stated “social rent”, whereas Gavin Barwell (now a former MP) last week told Inside Housing the level will be “affordable”. This prompted an announcement from Conservative Central Office that the party will “be supporting new council housing at below market rents. Councils will be in the lead in deciding the precise form of tenure – we expect a mixture of social and affordable rent, as at present.” Whatever the detail of that announcement, the manifesto acknowledged the contribution of the housing association sector and a desire to increase that contribution.
- New investment
The expectation that the combination of a reduction in the cost of housing (both market and build costs) equals “more private capital is invested in more productive investment” will certainly be met if private rents remain high. For housing associations, the increased corporate investment in the private rental sector combined with the links to Local Housing Allowance (LHA) may, in some areas, mean the emergence of true competitors. The current sector focus on value-for-money (and the forthcoming Homes and Communities Agency announcement on that) is reflecting the reality that, in some locations, housing associations have to have a sound proposition to offer a rationale for their tenants to stay with them.
- Voluntary right-to-buy
This has not been abandoned, but there is no commitment to a national programme and, in the new political situation, our view is that further development of the voluntary right-to-buy must be unlikely.
- Supported housing
The acknowledgement that there is a crisis, especially at the “sharp end”, is welcome but until the LHA rate proposal is scrapped, providers are going to be nervous about future investment. Clarity on the nature of the proposed “help” is keenly awaited!
The overall direction of austerity and public sector reform continues. The pressure on councils to be more commercial, something many councils are already embracing with alacrity, isn’t going to go away. There is continued support on the manifesto for mayoralties, combined authorities and Local Enterprise Partnerships, and on their development of local industrial strategies as part of the national plan for industry. The support for devolution highlighted in the Autumn Statement is re-affirmed.
We also welcome the proposal to allow some councils to build new housing, though note this will be “only those councils who will build high-quality, sustainable and integrated communities.” It is not clear yet how those Councils will be chosen, or exactly what kind of housing (at what sort of rent levels – see above), this might be.
Here there is more to say on what is not in the manifesto. There is precious little on the role of the third-sector, on co-operatives, or on social enterprise. Some will see this as a good thing – many in the sector remember with consternation the time and money wasted on ill-conceived projects in past manifestos.
The manifesto does include acknowledgement of alternative supply chains, and the use of the apprenticeship levy. There are also the proposals to require PLCs to engage with their employees that, although welcome, do not go as far as many would wish. Those from the co-operative sector might well look for a broader promotion of employee involvement or ownership. The promise of more frequent reviews of business rate levels may also not be entirely comforting!
For charities involved in culture or the arts there is welcome indication of future support and an emphasis on more of that support being outside London. And for rural communities, there is support for “pharmacies and village shops” in those areas.
Of course, the manifesto is not the only indication of future policy and recent events in London and Manchester make it more likely that there will be further support for efforts around community cohesion and support. Those in social business and the third-sector are used to having to be inventive; the next few months are likely to be no different!
In the end, perhaps one of the key messages of this election was the public don’t like to be taken for granted. The calling of an election, seemingly to shake off the legitimate activity of opposition, was perhaps interpreted negatively by the electorate. We have long promoted collaboration – between different sectors, different organisations, and with communities. Now that collaboration will be forced onto our politicians this might change the character of our politics, and promote the seeking of shared solutions. We look forward to navigating the new landscape with you.
For further information
If you would like to talk to us about the outcome of the general election or how can we can support you, please contact us.
Housing associations must continue to deliver core functions effectively and compliantly notwithstanding the uncertainty over the standards to which you will be held in the future.
Over the last few years the meaning of “asset management” has changed from being all about repairs to understanding that assets might not stay in an organisation forever.
The Grenfell Tower tragedy has understandably prompted a fundamental reconsideration of how building safety is approached for High-Rise Residential Buildings.
Results from the latest three-yearly valuation of the Local Government Pension Scheme (LGPS) are starting to trickle through.
The potential for Brexit with or without a deal causes uncertainty, and credit rating agencies do not like uncertainty.
Let’s face it, Wills are underappreciated and often overlooked. In fact, around 54% of the British public do not have one!
A recent case throws light on the scope of the exemption for “land transactions” from the need for an OJEU tender process.
A leaked report into maternity services at the Shrewsbury and Telford Hospitals NHS Trust revealed by The Independent has been described as the “largest maternity scandal in NHS history”.
The Pensions Regulator is showing its determination to improve the prudent management of Local Government Pension funds by digging deep into the internal workings of these funds.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.