With the Brexit process having now started in earnest and a general election on the horizon, Steffan Evans takes a look at three challenges that housing associations in Wales will face as the Brexit process develops.
One of the first significant challenges, and one of the debates set to dominate British politics in the next two years, will be the question of where powers currently exercised by the EU should be transferred to after Brexit.
In other words, should powers in areas such as agriculture and the environment return to Westminster, or to the devolved legislatures at Hollyrood, Stormont and Cardiff Bay?
Whilst the EU has very limited powers that directly concern the work of housing associations, this debate is still likely to have an impact on the social housing sector in Wales, and this impact is likely to be twofold.
Firstly, the EU holds power in areas that indirectly affect the Welsh housing sector. For example, EU legislation in areas such as the environment, health and safety at the work place, and employment does affect the way Welsh housing associations operate on a day-to-day basis. A question that the Welsh housing sector must therefore grapple with is whether it wants to see these powers transferred to Westminster or to Cardiff Bay.
Furthermore, if the National Assembly does gain significant further powers in areas such as agriculture the Welsh housing sector will face greater competition when seeking legislative time and financial support in Wales. It would therefore, seem vital that the housing sector engages continually with the Welsh Government and individual Assembly Members as the Brexit process proceeds.
A second challenge will be gaining access to the limited resources during the Brexit process of the Welsh Government and the National Assembly. With the general election, the Great Repeal Bill and the Brexit negotiations dominating the political landscape for the foreseeable future, it seems likely that the legislative time that may previously have been given to policy areas such as housing, will now be allocated to discussions on Brexit.
Given also that the resources of the civil service will also become increasingly stretched as they deal with with Brexit it appears imperative that the housing sector in Wales takes advantage of any opportunity to affect change when the opportunity arises. Take for example the Welsh Government’s recently tabled legislation to abolish the right to buy in Wales. With strong indications that further legislation will be forthcoming as the Welsh Government seeks to reverse the Office for National Statistics decision to reclassify Welsh housing associations as part of the public sector, the Welsh housing sector does appear to be presented with such opportunities. If it does not take advantage of these openings, it may be a long time before the sector has an opportunity to seek change again.
A final challenge that may confront the sector in Wales could be if the Welsh economy weakens any further. Any increase in inflation is likely to put pressure on tenants, which in turn could lead to an increase in rent arrears – a clear challenge for housing associations in Wales. A further threat that could emerge from this economic uncertainty is an increase in the price of borrowing. Given that many Welsh housing associations are currently operating very close to their gearing covenants, this could have a serious impact on the sector’s ability to borrow funds.
In addition to this, the loss of EU funds from some of the poorest Welsh communities could have a further impact on Welsh housing associations. If this money is not replaced by new funds from Westminster, the Welsh Government is likely to be faced with some very difficult decisions as to how it continues to invest in community regeneration.
This presents both a challenge and an opportunity for Welsh housing associations. The Welsh Government may place pressure on organisations already working in such communities, such as housing associations, to take on some of these services. And it this is not funded properly, this could stretch the financial resources of these associations, reducing their ability to deliver their core services.
Alternatively, this could provide housing associations with new opportunities to work within their communities, and to deliver improved services to their tenants and to society more broadly.
It is therefore important that Welsh housing associations take stock of their position before these new opportunities and challenges emerge.
Steffan is a PhD student at the School of Law and Politics at Cardiff University and is a member of the Wales Governance Centre. Steffan’s primary research interest include devolution, public law and housing.
Steffan has recently joined TPAS Cymru as Participation Officer.
This blog first appeared on the Thinking Wales blog.
This post represents the views of the author and neither those of the Welsh Brexit blog, nor Cardiff University.