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A casual look at the housing press over the past 12 months would give a visitor from Mars the strong impression that all is not well in the housing world.

Governance issues, critical housing inspectorate reports, Treasury concerns that the sector is inefficient, worries about being able to meet the decent homes standard by 2010, potential cuts in the newly introduced Supporting People care services funding regime – all are a cause for concern.

Then we have the UK's lack of production in off-site manufacturing, with more red and amber lights than expected. This is limiting the number of players in a market that corporation chief executive Norman Perry hopes will double its unit production.

Add to these the fuss about over-generous pay-offs, the changes at the top of the corporation and the challenges it faces from the Audit Commission and the regional housing boards and by any standards we have had an exciting 12 months.

But if we stop and think for a moment and take a balanced view, we might realise that we can learn from all this and improve what we do.

I have absolutely no doubt that the inspectorate is driving up customer service standards. Sensible associations will take advantage of this free consultancy.

Managing billions of pounds of public money does need high standards of governance, regardless of whether board members are paid. We must take note of the Rowntree study and the National Housing Federation's code review on governance.

Although we may not think we are inefficient – such a judgement only applies to everybody else – there are undoubtedly opportunities for streamlining the way we do things; for example, the NHF's initiative in setting up a procurement club that has proven its worth.

We must understand that the Treasury, in particular, will want more for less. It will not take no for an answer, so we might as well take some action ourselves.

As regards the rush to off-site manufacture, or modern methods of construction, as it is now known, it is sad that manufacturing in this country seems to be way behind that elsewhere, and that much of the OSM market will now go to Poland and Sweden. Of course, we must bear in mind the views of tenants who want to live in traditional houses like those built by Barratt, Wimpey and others, who have long memories of system build. But the skills shortage in the construction industry, coinciding with a building boom, means that we don't really have an option besides OSM. We might as well ensure we get the best product possible and control the costs.

Throw off the chains of government
So many of the solutions to the sector's problems seem to be in our own hands. But I do have some genuine concerns about the constraints on the sector's ability to deliver and we need government support to release these shackles.

It would help if the Treasury accepted that surpluses are nothing to be ashamed of. Associations require positive cashflows to survive

Perhaps the most urgent is government help to deal with my old hobby-horse, rental income. If this is flat but we are expected to improve housing stock quality and deliver better customer service at a time when the costs of the two main areas of expenditure – salaries and maintenance – are running well ahead of inflation, the sector will at some point come a cropper.

A relaxation of the controls introduced by rent restructuring, with the consequent additional income ringfenced to achieve the decent homes standard, would do much to improve the services we give. Just stop and think what an additional £1 per week per property would do to your rental income and by extension your repairs budget – deputy prime minister, please note.

If the government does not respond positively, it will jeopardise the sector's ability to hit the standard and force some associations to cut back on development: all this at a time when the Barker report is arguing for more affordable housing.

In addition, it would be very helpful if the Housing Corporation's tight rules on the use of recycled capital grant and disposal proceeds funds were relaxed, in order to allow all that money to be used to meet decent homes. The suggestion by Baroness Dean's low-cost homeownership taskforce that these funds should go towards shared ownership fails to recognise the requirements of existing stock. We need flexibility subject to local needs.

The corporation's proposal to use social housing assets as security for non-social housing activities in mixed-tenure developments is welcome. Equally, so would be the conversion of social housing grant into a grant proper, rather than a loan. This would improve the health of associations' balance sheets, giving them greater ability to borrow.

Pioneers of mixed-tenure developments would gain much encouragement if the government made this change. They would also produce more homes.

It would help if the Treasury and ODPM accepted that reserves, a positive cashflow and surpluses are nothing to be ashamed of. Associations require positive cashflows to survive. The fact that many are financially sound should be a cause for celebration, not concern.

Lastly, housing associations must remember that they are independent organisations with long-term responsibilities and liabilities, operating in a political environment where decisions are not always made for sound business reasons. To be less cryptic, there will be occasions where we will refuse to get involved in major government initiatives because they are seen as too risky, and will instead concentrate on our bread-and-butter work.

Government rightly wishes to squeeze the lemon to deliver its very ambitious and greatly welcomed major housing programmes, but associations must avoid a risk too far. There is already some evidence that not all are taking this view.

I believe that through a combination of self-improvement, the relaxation of some of the rules governing the sector and a greater acceptance of the need for housing associations to be financially strong, the sector will be able to make a much more significant impact. This, after all, is what the government wants.