Firm Foundations is fundamental according to Jo and perhaps an irrelevance according to Archie. Tony felt it was fairly harmless whilst Graham gave delegates a picture of what is going on in England.

Jo noted that in the UK budget 2008 announcement there is no more money for housing. Overall the budget has increased by 1% but this will feel like a cut compared to the 5% increase of the past. In Scotland there is an uplift in the affordable housing budget overt the next 3 years – other budgets such as transport have actually gone down. So budgets are getting tighter whilst housing management costs are rising and rents are rising. Jo said something will have to give. See looked at what had happened to Scottish Water recently in terms of efficiency drives and suggested housing may face a similar experience.

Tony wondered if we could build more homes for less subsidy. He presented some evidence that suggested it may be possible but then added infrastructure costs such as water connections may make efficiency targets unobtainable. He felt that many RSL were already pretty efficient and was concerned that pushing for a few lead developers may have knock on effects for local authorities’ strategic functions. Overall Firm Foundations is probably harmless but it is far from being a national housing policy. However he does believe that Firm Foundations may contain a sting in the tail. He thinks that if local authorities get money to build housing it will inevitably lead a national rent setting policy.

Archie said Cordale are not looking to do it for less looking to but to do it for nothing. There was going to be no more ‘please sir can I have some more’, for Government funding, instead they intended to fund their future through social enterprise and other initiatives. Cordale is proud to be doing it differently and for them Firm Foundations is an irrelevance. If anything it is too narrow Archie thinks many RSLs are taking too narrow a view – it is about much more than housing supply it should be about self sufficient communities. Using a group structures they are doing social enterprise, buying and selling shops, creating health centres and building schools. The future is to make money and reinvest this back into the community - oh and also build homes.

Graham enlightened the audience on developments in England where there have been absolute reductions in subsidy levels. Grant levels for 2008/11 are down by 8% for building rented housing and 12% for housing for low cost home ownership. Rents are controlled by the Government so there is no scope to raise additional funding here. The report Unlocking the Door concluded that housing associations have the capacity to borrow £6.8bn more than planned and also cope with a 10% reduction in grant rates. He said regulation will be used by the Housing Corporation to drive efficiency savings. This may offer a glimpse of the future in Scotland.

However, some RSLs are refusing to accept the changes. There is a stand off developing between RSLs and the Housing Corporation with a number not applying for grant in the hope that the Corporation will be pushed into offering better deals.