Phil Shanks: Don’t waste time in solving the social housing problem

As mere citizens, however, we must rely on endless door knocking, letter writing and phone calling to bend the ears of ministers, despite the fact that in my case, I am offering an immediate answer to Britain’s growing social housing needs.

While the Prime Minister is swift to announce new initiatives, delivery is somewhat slower – except, of course, when it comes to implementing widespread cuts.

Unfortunately, government operates by committee and projects must navigate an impressive array of hoops before action is taken. But at a time when private sector rents look set to rise by 20 per cent by 2017 – driven by a substantial under supply of affordable social housing – further delay is simply unacceptable.

I share an ambition with the Communities Secretary Eric Pickles to provide more affordable, more sustainable homes for the future. For years we have been paying far too much for our social housing. Having viewed the consultation document on the Supported Housing review, I have noted with mounting concern that the key cost drivers, especially for the non-registered social landlord voluntary sector, are not being addressed.

Increasing the availability of social housing by grants and front loading building projects will only scratch the surface of the current waiting list, not to mention anticipated future demand.

Ensuring that the funding of the bricks and mortar is at the very lowest cost levels possible and is applied consistently across the country is essential.

Attempts by Her Majesty’s Government to force rent levels down are destined to fail if the amount of social housing stock is not increased. What is needed is a systematic rolling programme that utilises properties that can be returned to available stock alongside new developments.

If we can make realistic progress on the provision of an adequate supply of low cost social housing, then the very same laws of supply and demand that work so well for landlords today will finally turn to favour tenants. Rents will come down and then the battle will shift from price to quality.

To achieve these ambitions we need a new funding mechanism; a new strata of funding for social housing which utilises private finance. This funding would be directed and guaranteed by the local authority. The money would be borrowed on terms and at rates that substantially undercut the return rates required by private landlords. It could provide a midpoint cost option which lies in-between the fully grant aided and the private landlord. But where will this money come from?

If, instead of buying bonds from banks, Cameron & Co injected money directly into a new tier of housing finance by purchasing bonds issued by a social impact organisation, this funding could be placed at the disposal of local authorities: they, in turn, would service it through new rental flows.

The consequent creation of jobs would be direct and immediate: availability of low cost social housing would release families and individuals from “rent poverty”. With lower rents to pay, more money would be leftover in the household budget. The Government would gain substantially from any measure that reduces rent cost and, in turn, housing benefits.

Unfortunately, I and other entrepreneurs, who are creating viable solutions such as this, are hampered by the ponderous speed of the public sector. But the need to act has in itself become a fundamental requirement. And it is in this light that the ability of enterprise and commerce to respond almost immediately to demand seems such a valuable resource. I have both created businesses and worked at a senior level in the public sector.

It is therefore from a place of first hand experience that I highlight the monumental difference in the speed of response between the private and the public sector. In the time it takes to set up shop with private finance, a publicly funded programme will only have jumped through the first hoop.

A stronger partnership with the private sector doesn’t have to cost a single penny. Unlocking the private sector’s ability to raise money and respond to an immediate social need can be done by simply issuing contracts with strict performance criteria.

To the Government, I simply say this: my door is open. So is that of my fellow entrepreneurs. We understand the challenge ahead and have solutions to meet immediate demand for social services. The need to act is now. Let’s hope it doesn’t take months of committee meetings to reach that same conclusion.