The problems at Peabody have once again brought into focus the fallibility of a major housing association (see pages 8-9). Peabody, like Places for People, is one of the flagships of the fleet.
Both have been exposed to have problems below deck: Places for People, by a row over governance at the end of last year; Peabody, by problems of a totally different nature. Its woes are the legacy of old houses that are expensive to refurbish, resulting in the association struggling to meet the decent homes standard against a background of income limited by the straitjacket of rent restructuring.

Despite this, Peabody has forged ahead as a pioneering developer of innovative schemes. It picked up a clutch of architectural awards in the process and attracted the eye of the government, but financially has paid the price (see page 7).

The Places for People row was all about members of the board asking too many questions; it has to be asked whether the board members at Peabody were probing enough. Some will see its decision to be the torch bearer of modern methods of construction and low-energy homes as brave and enlightened; others as foolhardy. It would be a shame, though, if other RSLs were deterred from trying anything new because of Peabody's experience. The key is to be more clear about the risks and costs involved.

To be fair, Peabody has been trying to find a solution to meeting the decent homes crisis for some time, cranking up its investment and going cap in hand, with no avail, to the Housing Corporation as far back as 2000.

It's not surprising that bid was turned down. Politically, it would have sent out all the wrong signals for the regulator to be bailing out an association seen as one of the country's richest. The acting chief executive and new chair have no option but to do what they have done and take decisive action to save money by pruning back on development projects and staff.

It would be a shame if other RSLs were deterred from trying anything new because of Peabody’s woes

Peabody is also pledging to increase sales of its more dilapidated stock to generate the cash to get all its homes up to scratch by the 2010 deadline. With affordable homes for rent in the South-east in such scarce supply, selling one is one too many. But again, Peabody has no choice.

However, the many other RSLs faced with the same predicament don't have the luxury of selling the family silver. So just how are those with ageing stock going to pay for its modernisation?

This week Peabody made another plea for help to which these others could soon add their voices. It is lobbying the Housing Corporation for concessions on rent restructuring – to increase its rents faster than the given formula.

Source

Housing Today