RSL efficiency gains – too good to be true?

Reading the Housing Corporation’s recent thematic review of Efficiency (which, to be fair, does include a handful of good practice casestudies), I was reminded of the breathless triumphalism of Soviet Weekly greeting the over-achievement of grain targets:

The 2005-06 gains reported by associations reflect savings well ahead of CLG’s interim targets set for the year. The actual recorded savings of £81 million for capital works, £130 million for management and maintenance and £27 million for commodities exceed the respective targets of £2 million, £35 million and £10 million by a total of £191 million.

While many housing associations are working hard to improve, are they really generating efficiencies of 4% of total expenditure – an average £162 per year per home?

I’m not entirely convinced that a world of burgeoning efficiency is reflected in the Housing Corporation’s own Global accounts of housing associations for 2005-06 – even allowing for other cost pressures. The global accounts show that costs are rising with turnover with operating margins reducing rather than increasing.

Perhaps I sound cynical, but I fear that there is a lot of cynicism out there. (Personally I don’t view the requirement for annual efficiency statement as a joke – I think it should be treated seriously and seized as an opportunity to drive change and promote efficiency.)

I’ve also seen some claimed efficiency gains. One housing association that I know claimed an increase in tenant satisfaction as an “efficiency gain” but without identifying any action leading to this gain and without factoring in any costs incurred in delivering the gain.

If housing associations are over-stating their efficiency, they will be the ones paying the price. Local government is now facing a funding squeeze as its been so successful in over-achieving its ability to do more for less.