Wednesday, February 28, 2007

ALMOs and council housing - the balance sheet so far

The Department for Communities and Local Government has recently issued a Housing Research Summary on Arms Length Management Organisations: Early impacts and process lessons. It is based on research by London South Bank University on these relatively new council-owned companies managing increasing numbers of council homes. It is timely with the tenth ALMO getting the top “three stars” inspection rating last month.

The study’s found:

Overall, ALMOs are delivering significant improvements to homes, contributing to improving the quality of life and the living conditions of residents and communities in local areas.

Its key findings included:

ALMOs are seen as key drivers in creating stable and sustainable communities. Better resourcing of tenant participation is improving access and social inclusiveness. ALMOs are also providing new opportunities for tenant involvement through improved representative structures.

ALMOs have developed new partnerships involving construction and employment

ALMOs have led to significant organisational and cultural change. They are committed to staff, board training and development. There is an impetus to provide the best homes and services for tenants and leaseholders.

It also found ALMOs developing a range of services to local authorities and housing associations. Interesting, it also noted the possibility of ALMOs managing the stock of housing associations – an issue that I have discussed here.

The Study did identify problems and challenges such as the relationships with sponsoring local authorities – but the balance sheet for the development of ALMOs is generally very positive.

Monday, February 26, 2007

E-government and

The people behind (and the No10 e-petitions that everyone has heard of) have a new innovation.

At Mysociety's you can enter your postcode and enter details of whatever problem - which is then reported directly to the council responsible.

I've not tried it. It will be interesting to see if it works (and if the councils work).

Hopefully there will be monitoring of response rates as Mysociety did earlier with

Social housing - the Hills report and the Cave review

The Hills report on social housing last week was a bit of an anti-climax. There was (thankfully) no suggestion that 4 million tenants should lose their security of tenure. However, given the problems of social housing, perhaps we could have expected some more radical proposals.

I was particularly disappointed that there was no reference to the role of mutualism in social housing – particularly housing co-operatives and tenant-led housing associations (like the Community Gateway in Preston).

(For those who do not have time to read the full report, there is an article by John Hills summarising his findings and recommendations in Inside Housing - pdf available.)

We are now waiting for the report of the Cave review on the regulation of social housing. The National Housing Federation have gone ahead and recommended a form of self-regulation for housing associations – despite the scepticism of many board members and managers in housing associations.

The submission of the lenders to the social housing sector (pdf available) suggests that housing associations will lose between £200million and £400million if self-regulation was introduced and housing associations had to borrow on commercial terms. The Council of Mortgage Lenders stress the importance of independent regulation of governance and finance although they recognise the role of self-regulation and accountability to residents in matters of service delivery.

The Housing Corporation response to the Cave review has also rejected self-regulation as “insufficient to protect resident and tax-payer interests”.

Interestingly both the Council of Mortgage Lenders and the Housing Corporation want to “co-locate” regulation and investment – presumably under the umbrella of Communities England. I would favour an independent and strong but light(ish) touch Office of Housing Regulation overseeing a level-playing field for all social housing whether housing associations, local authorities or private sector.

Tuesday, February 20, 2007

FE colleges - the story of Barnsley College

Today’s Guardian carries a fascinating account of the problems that Barnsley College had – leading to the corruption conviction of a former lecturer last week.

I saw several Further Education colleges fail in the 1990s but was not familiar with the details of what happened at Barnsley College.

From the article it looks like another case where weak governance was part of the mix.

Many of the problems at colleges back then were also the product of a faulty response to the then government’s pressure on colleges to cut costs and grow at an incredible (often a literally unbelievable) rate – this often involved sub-contracting new provision out to “franchising” partners.

The response of the Further Education Funding Council (the forerunner of the Learning and Skills Council) was always to tighten regulations. Unfortunately this had its own problems.

I think that governance is now stronger at colleges but I fear that some problems may start to re-emerge as the funding constraints increasingly tighten towards the end of the decade.

Monday, February 19, 2007

Mapping Third Sector expansion in health and social care

Last week the Department of Health published the results of research (PDF available, 4.2MB) examining the potential contribution that the third sector can make in health and social care. The research involved surveys of third sector organisations (TSOs)and local authorities.

The research estimated that 35,000 TSOs currently provide health and/or social care in England with a further 1600 planning to do so in the next three to five years. The total funding for these services amounts to an annual £12billion.

Local authorities were very positive about the services provided by TSOs, with overall levels of satisfaction over 80%. Local authorities felt the organisations provided good value for money, high quality and responsive services.

Lets hope that TSOs have the business skills, and the financial and governance capacity to manage expansion.

Friday, February 16, 2007

Defend Council Housing and "predatory social landlords"

Defend Council Housing have just issued a new briefing (pdf available). It attacks housing associations as you’d expect.

Government's claim that tenants won't be worse off with privatisation but Registered Social Landlords provide 'assured' not secure tenancies and so have higher evictionrates; they charge tenants more in rents and service charges and they are unaccountable.

A single contract for council and housing association tenants is on the horizon – that will take away one argument against stock transfer. Increasingly there is a leveling of the playing field on rents too. Housing associations are unaccountable? Tenant surveys suggest that housing association tenants are more satisfied with their opportunities to participate in decision-making than council tenants. Hopefully we will see housing associations working even harder on this with resident scrutiny panels and/or other forms of enhanced accountability.

Shelter's Adam Sampson, speaking at a fringe meeting at Labour conference, expressed his concern that RSLs were becoming increasingly dominated by the banks and focuson homes for sale rather than their tenants.

Housing associations are only responding to the government’s agenda. Hopefully we will soon see the (long awaited) step change in building for social rent.

I know that housing associations are not perfect. They could do better and at times they can be prone to complacency. But they are not the villains of DCH mythology.

(I should also say that I think that the government should offer another route to Decent Homes improvement funding where councils choose to retain existing arrangements for council housing and these arrangements are demonstrably working.)

What I find so frustrating about so much of the rhetoric from DCH – as well as the prejudice against housing associations - is that it seems to assume that all is well with council housing. There is an unwillingness to suggest any thing other than more cash. Any change in the form of council housing – such as council-owned Arm’s Length Management Organisations – is immediately condemned as “privatisation”.

At least there are people like the Confederation of Cooperative Housing who show more open-mindedness and promote new models of social housing.

Thursday, February 15, 2007

Social enterprises: a business planning guide

As a consultant, I know I should not be pointing people at free resources, but I can’t help myself...

The Scottish social enterprise Forth Sector has published A business planning guide to developing a social enterprise. It looks like a document that could be a lot of use to would-be social entrepreneurs (and indeed anyone keen to set up a new not-for-profit).

A world of warning – the pdf is 3.6MB so make sure you use broadband.

Tuesday, February 13, 2007

Ruth Kelly on Housing Policy and Social Housing

Media coverage (online and in the press) has inevitably focused on Ruth Kelly’s suggestion that all council and housing association tenants should be offered a new "right to own" and encouraged to buy anything from 10% upwards of their homes. Her speech to the Fabian Society is now available online. It talks about a lot more than this.

It sets out four “big policy challenges” in housing:

First - more homes in decent communties. Getting a first foot on the housing ladder is harder than ever today. It is clear that building more homes, in well-planned communities, will be vital to help first-time buyers.

Second - greener homes. With housing responsible for 27 per cent of national carbon emissions, housing policy must play its part in tackling climate change.

Third - while in recent years the rising value of property has brought benefits for homeowners, some have been excluded. As it gets harder to get the first foot on the ladder, how do we ensure that no-one is left behind?

Four - making social housing more responsive to each individual, taking into account their own particular circumstances. Social tenants want and deserve more than a one-size-fits-all approach.

Ruth Kelly also talks about going beyond the 30,000 socially homes per year that are currently being built. There do seem to be other indications that the 2007 Comprehensive Spending Review will crank up the rate the social house building although linked with an emphasis on efficiency and innovation. (I suspect that this will not really compare with the 120,000 social homes being promised by Segolene Royal in the French presidential election.)

In the speech there are mentions of the Hills and Cave reviews although Ruth Kelly is careful not to pre-empt them. She does however note:

people can sometimes be frustrated by managers whose performance is poor. So we should think about how we can give people more opportunities to influence decisions when they want better for their estates.

This is could be read as code on the introduction of contestability in social housing management – a topic I wrote about a week ago – as well as the more obvious reference to resident involvement.

Saturday, February 10, 2007

Pandemic flu and public services

With the current avian flu outbreak in East Anglia, its worth thinking about the readiness of public services for a pandemic influenza outbreak.

I think we are a bit wary of scares and consultants talking up risks after the 2000 Millennium Bug - but I think this is different.

The World Health Organisation believe that pandemic flu is “
inevitable”. The absence rates are likely to be high and pretty unpredictable. Infection rates of up to 30% have been seen in some flu outbreaks. Also don’t forget those absent due to caring for family members or just too scared to work, use the bus, etc.

The readiness of the public and not-for-profit sector is variable.

The NHS appears well prepared – as you would expect.

There is lots of guidance (pdfs attached) for
schools, FE colleges and HE institutions – I just hope someone is reading and using it! I do know one FE college that has run a pandemic flu simulation exercise but they may be unusual as they learned a lot from managing biohazards during the Foot & Mouth outbreak.

The social housing sector is, I fear, way behind. (Hopefully I will be proven wrong.) I’ve seen housing associations update Business Continuity Plans omitting what is possibly the biggest threat of disruption. The risks will be particularly serious where associations run social care provision.

I don’t blame housing associations – where is the guidance from the National Housing Federation, the Housing Corporation and the Department for Communities and Local Government? (Again, please someone, prove me wrong.)

The situation in the voluntary and community sector may be just as unprepared – or worse - even though these organisations have a vital role in our society – particularly in relation to some of the most vulnerable.

I would suggest that any organisation without contingency plans for pandemic flu make use of the guidance from the
government, the Health & Safety Executive and the private sector as well as the information available for other sectors and business organisations (pdf attached) – and do so urgently.

Friday, February 09, 2007

Age and governance - a legal risk and some wider thoughts

According to Inside Housing last week (but unfortunately not on the IH website), housing associations with paid board members are exposed to legal challenge on age bars on boards:

A shake-up of employment law has left social landlords vulnerable to legal action from paid board members, lawyers have warned.

Measures introduced by the Employment Equality (Age) Regulations 2006 late last year could pave the way for disgruntled board members to file employment claims against housing associations.

Chief among concerns are new rules that dictate how organisations can impose a compulsory retirement age on board members.

I’ll leave to one side the issue of the iniquity of age bars in organisations committed to equality and that the fact that older board members can make an effective contribution to governance.

I would suggest that housing associations put their rules right asap but also think about this in a broader context.

Firstly, housing associations should be adopting the National Housing Federation’s recommended practice of a nine year cap on board membership. I believe the overwhelming majority of associations do so. However, many also have the bizarre provision for capped members rejoining after one year which weakens the cap as a means of refreshing boards with new blood.

Secondly, housing associations should be ensuring that their boards do have a mix of ages. While the NHF Board Members conference last week had quite a few delegates under 50 (and the numbers seem to grow each year along with other evidence of diversity), there is a case for housing associations to work hard to recruit a few more young-ish board members. Linked to that housing associations should be thinking about the practicalities of the timing of meetings, the payment of childcare costs, etc.

Thirdly, housing associations need to think about how they can get the voice of younger residents heard in decision making processes. I’m not an expert in this field so I’ve no easy answers, but I do know it is important.

Thursday, February 08, 2007

Housing associations, chief executives' pay and rumuneration committees

The average salary for a housing association chief executive is £88,000, according to the newly published Survey of Salaries and benefits in housing associations.

The survey shows that average salary increases have gone up to 4.75% in 2006, which includes both cost-of-living and performance related increases. This is more than the public sector average.

I don’t see any thing to worry about housing association chief execs being paid that much - providing there are appropriate arrangements for the scrutiny of executive remuneration and rigorous performance review. How many housing associations to have robust remuneration committees?

Tuesday, February 06, 2007

Social housing - an earlier Hills report and the re-education of bureaucrats

Two weeks today the report of the Hills review on social housing is published (not to be confused with the Cave review of social housing regulation). The "left-leaning" Institute of Public Policy Research has re-published on its website the final report and various research reports of its own review of social housing back in 2000.

It is interesting to see that several ideas in the final Housing United report (pdf available) fed into government policy although not all - in particular, the comprehensive vision of Community Housing and blurring boundaries between "tenures of equal esteem".

Among the research reports, there is one from Professor John Hills himself (pdf available). Much of the report is about housing finance, particularly reform of housing benefit. However, he did make some interesting comments on giving tenants the right to exit from unsatisfactory landlords.

It will be interesting to see if the Cave report on regulation will recommend the re-education of Housing Corporation regulators. Maybe Martin Cave will be inspired by the example of the governor of the Russian region of Ulyanovsk who has sent 2000 bureaucrats back to school.

Sunday, February 04, 2007

College governance and Learner Voice - learning from others

During the session on leadership at yesterday's National Housing Federation board members conference, the Chair and Chief Executive of St Basil’s referred to the homeless charity’s Youth Advisory Board.

Reading about the YAB in the St Basil's Annual Review and elsewhere, it would appear that FE colleges could perhaps learn something.

The recent Personalising Further Education consultation from the Department for Education and Skills stresses voice for learners. In particular:

[The DFES] also expect learners to play a key role in institutional governance with college governing bodies including at least two learner governors.

Student governors are sadly seen as tokens. They are often unsupported, untrained and unmentored. Sometimes they are unrepresentative too. Hopefully this will change with training programmes and other measures.

FE Colleges should look to go further than the two learner governors. They should be considering how they could develop bodies - similar to the St Basil’s YAB - with boards of learners fully integrated into decision-making, considering policies, participating in internal inspections and self-assessment. I know that some colleges do go some way towards this but few have such a radical approach.

Saturday, February 03, 2007

Good governance and audit committees - "trust and verify"

At today’s NHF Board Member’s Conference plenary on leadership and governance Oliver Nyumbu (a management consultant and the Chair of St Basil’s) quoted Ronald Reagan's words on arms control negotiations and applied them to the role of boards: “Trust and verify”.

Reagan wasn’t known for his words of wisdom but this got me thinking about disarmament verification, audit committees and governance more generally …

Oliver Nyumbu was spot-on with the relevance of that quote.

When board members (or governors or trustees or whatever) sit around a big table with senior managers (who have the huge informational advantage from being there 200 plus days a year), trust is inevitable - or board members would never sleep.

So do board members actually verify the assurances and information that they get?

When I do audit committee training at FE colleges and housing associations, I emphasise that the audit committee is there to give comfort (or wave a warning flag) to the rest of the board on the robustness of the information that they get. Too many audit committees see themselves as there to give senior managers and/or auditors a hard time – rather than to verify what they are being told by managers.

It always seems a little strange to me that being on the audit committee is avoided and dreaded by so many board members. Being on that committee, board members can harness the time, effort and reports of auditors for the purposes of verification. Audit committee members should be best informed and equipped members of the board.

Arguably the whole board can play a role – they need to be critical friends, confident to challenge senior managers.

Sadly some boards fail to do that. (And, of course, some chief executives want just that – they prefer rubber stamps.)

Cave Review - HAs, self-regulation, contestability and a daft idea

Yesterday evening I was at the National Housing Federation's (NHF) conference for housing association board members. The evening plenary session was on the future regulation of HAs.

One of the speakers was Julian Ashbury who is a member of the Cave Review team on social housing regulation (covering regulation for HAs, council housing and, potentially, private sector involvement in social housing). He spoke about the issues for the Review in a personal capacity.

Ashbury was clearly lukewarm about the NHF’s core proposal of self-regulation. He likened self-regulation to the weak regulation by the medical profession and the Press Council – unchallenging and too “producer-friendly”. (He didn’t mention how the NHF’s espousal of self-regulation could be perceived by the stakeholders and critics of HAs.)

There was more positive talk of “co-regulation” – allowing a degree of self-regulation that is regulator-approved and externally validated. A bit vague but surely more reassuring for tenants (and voters in stock transfer ballots).

I was interested in Ashbury’s thoughts on “market-style incentives”. In particular, he suggested making poorly-performing HAs (and others) give up the management of stock to those who can manage it better. (I said something similar here the other day.) This is essentially “contestability” (the idea that performance can be improved by the credible threat of competition) although he did not use the term. There is nothing more powerful than the thought of losing “business” to make an organisation raise its game.

Ashbury (and James Tickell advises the NHF) recognised the role for residents in the framework. Interestingly he advocated a national voice for residents with a right to be consulted by the social housing regulator – something similar to Energywatch and Passenger Focus.

I should add Ashbury seemed to float one positively daft idea. Letting HAs charge more (less) rent if they get better (worse) satisfaction rates in tenant surveys. Does he not realise that residents might spot that, claim dissatisfaction and vote for lower rents?

I hope some of these ideas from Ashbury are shared and espoused by his colleague Martin Cave when he writes the Review report. Whatever happens, we are in for an interesting debate as well as potentially more freedom and flexibility for HAs and other social landlords – with greater reliance upon good governance and less on strict regulation.

Thursday, February 01, 2007

Public services, the private sector and social enterprises

This week there have been two interesting articles on the role of the public, private and third sectors in delivering public services.

Stefan Stern in the FT suggests that private sector methods find their limits in the public sector:

People who choose careers in the public sector have usually done so because they want to provide a good service, not because they want to compete commercially with rival companies. The language of markets and "contestability" is lost on them. The management challenge is to raise performance without jeopardising that service ethos.

I think that Martin Narey's article about the prison service makes a strong argument against that. (See my blog post on this article.)

Tim Smit (chief executive and co-founder of the Eden Project) makes the case for social enterprise in the Guardian:

I think it's fantastically exciting, because we can do it and it works. I think social enterprise is the future model for organising our collective state assets.

I certainly agree with that – especially customer-directed mutually-owned organisations such as housing co-ops and community gateway associations.