Friday, August 22, 2008

Shared ownership - A problem shared?

This month’s Roof special on Affordability makes rather depressing reading – with perhaps the exception of the new Homes and Communities Agency chair promising things will only get better (after they get initially worse).

I’ve always been a bit of a sceptic with shared ownership. It is of course a cheap form of affordable housing for the public purse and a cheap form of asset ownership for families. But there have been problems with viewing it as a panacea – as well as issues such as with key worker schemes and Social HomeBuy.

Now Roof depressingly reports that shared ownership accounts for between a fifth and a quarter of the workload of some debt advisers. If they haven’t done so already, housing associations need to critically review the way that they assess the ability of applicants to sustain shared ownership. There is some bad practice out there – and it could lead to more people losing their homes.

Friday, August 15, 2008

The Housing Corporation's traffic lights set to be turned off – but what about other tick box exercises?

Everyone loves traffic lights when it comes to regulation, governance and management. So many reports are brightened up by red, amber and green. So it was with mixed feelings that I read that the new social housing regulator is likely to turn the lights off.

According to Public Finance magazine, Peter Marsh, the chief executive designate of the new regulator, believes that the traffic lights seen in Housing Corporation Assessments encourage a 'tick-box' culture without fully revealing to tenants how well their landlord is performing. There is also a belief that most associations gain green lights but do not have any further incentive to improve.

Perhaps there is too much complacency with the reality of continuous improvement not matching the rhetoric. Yet turning the lights off might not transform things.

Hopefully the new regulatory regime will see radical changes in the annual ritual involving housing association boards agreeing and submitting a self-assessment compliance statement against the Housing Corporation’s Regulatory Code. This exercise involves presenting evidence to justify a tick against a range of criteria. It is the epitome of box ticking even though the Housing Corporation allows a degree of flexibility and stresses that it should report on improvement. I fear that it does not.

Perhaps we might have a more robust assessment of organisational health and performance. There should be an expectation that strengths and weaknesses should be highlighted and honesty encouraged with the exercise driving improvement. Such an assessment should be directed more towards the customers rather than the regulators.

Tough times and the third sector

The impact of the current economic downturn on the third sector has been in the news. This week Oxfam announced plans for job loses and cost savings. While charities face falling income and rising costs – the people who need them most, need them even more. Earlier in the summer an NCVO study found that the third sector was expecting “tough times”.

The think tank
nfpSynergy has published an interesting mini-report on what happens to charities in a recession. They believe that this is a 10-month delay between an economic downturn and its subsequent effect on charities income although the falling disposable income is almost immediate.

I think the nfpSynergy research is useful but we need to be wary. Looking at the last two and a half decades tells us only so much as we have not had a recession for over a decade – and we might still escape one now. The combination of inflationary pressures and credit crunch is both toxic and unusual.

nfpSynergy link the economic downturn to risk management. I wonder how many charities and other third sector organisations included an economic downtown in their risk reviews and prepared contingency plans?

Going green in HE, FE and elsewhere in the public and third sectors: revolving funds and useful advice

It was good to read last week that the Higher Education Funding Council is launching with Salix Finance a £30m Revolving Green Fund to support the introduction of carbon-saving projects. Earlier in the year the Learning and Skills Council launched similar funding (and I believe that there will be more finance in the future.)

Even when funding bodies are not providing financial support, the public and third sectors can do something. I have come across a useful source of information on Canny Buying. This site is aimed at organisations in Scotland but sustainability has relevance south of the border too.

Saturday, August 09, 2008

No exit (interview) from governance: saying thanks and learning from ex-board members

The recent review of the third sector’s Code of Good Governance recommended that the Code be updated with a second edition. One thing that the update might consider would be encouraging exit interviews when board members, trustees, governors or whatever leave a boards.

I must confess that this is not my brilliant idea. It was suggested in one of the podcasts on the On Being Board website from BoardStar. (I suspect that this practice may be commoner in the USA than the UK as I have seen reference to it on another American website.)

The case for exit interviews for departing board members is perhaps obvious. They allow the organisation to say thanks for the contribution of the individual. They give the organisation the opportunity to learn as the individual is able to highlight issues and weaknesses with greater candour than perhaps previously.

No doubt many organisations who think exit interviews are useful for staff leavers forget to have them for board members who have the task of giving the organisation its strategic direction and monitoring its performance.

Disappearing universities: financial viability and demographic factors

Last weekend the Financial Times reported that the credit ratings agency Standard & Poor’s had warned of “certain universities ceasing to exist”.

The S&P identified the issue of changing demographics. They noted official forecasts that by 2020 there will be 16 per cent fewer 18-year-olds in the UK. (The implications of which will be felt by FE and sixth form colleges even sooner unless the government is successful in raising participation rates at 16-18.)

S&P distinguishes between “the newer, less research-oriented universities” and “leading universities”, which will continue enjoy strong demand from UK pupils.

The report expects the disappearing universities to go by merger rather than going bust. However, it is a little depressing if institutions cease to be financially viable largely through external factors no fault of their own. (Of course, badly managed institutions will go that bit sooner and with more mess!)

Monday, August 04, 2008

Governance: what is it?

On the Health Service Journal website there is an article on the role of NHS boards and their duty to the public. Paul Stanton argues:

There is significant confusion and muddle in the DH and the NHS about the nature of governance. It is not uncommon to hear senior figures talking about boards managing or leading their organisations. This implies a fundamental lack of clarity about the explicit separation that should exist between the task of a board, which is primarily legislative (making policy, setting strategic goals and holding the executive, and through them the organisation, to account) and the task of the executive (albeit some executives are also corporate directors within the legislative board), which is to lead and manage the organisation so that policies are implemented, strategic goals are achieved and the local community is served.

He credits the American non-profit governance guru John Carver whose model distinguishes governance and management. The board's role is primarily to set policies - essentially, the ends.

While Carver was influential in thinking about the governance of FE colleges soon after they were incorporated as autonomous bodies, his thinking does not get enough attention in the public and third sectors where many bodies drift and range far and wide rather than focusing on their core tasks.

An alternative take on governance was the recent comment that "[Good] governance is a little bit like porn" from Robert Daines, the co-director of Stanford University's Rock Center for Corporate Governance. (This was apparently referring to a Supreme Court judge's comment about recognizing obscenity. "I can spot it when I see it, but it is hard to say what it is.") Who ever said governance was boring.

Governor workload and remuneration in FE Colleges: an Irish problem

While I am generally sceptical about board remuneration – particularly for smaller organisations – I can see a case for chairs of boards in the public and third sectors being paid. There was an article in the Irish press this weekend reporting that four of the six chairs of Northern Ireland's newly merged further education colleges have now resigned due to an escalating workload in the absence of payment for their services.

When the positions were created, the commitment was estimated at eight to 10 meetings per year, but the appointees said they attended up to 70 meetings a year.

Friday, August 01, 2008

More on pay, incentives and motivation: donating unpaid overtime in the for-profit and not-for-profit sectors

There is an interesting article in the Spring issue of Research in Public Policy from Bristol University’s Centre for Market and Public Organisation.

The article summarises some CMPO research In search of the public service ethos. While people talk of a public service ethos, do they actually demonstrate it in behaviour through donating labour in the form of unpaid overtime. It crunched raw data that showed 46% of employees in education, health and social care in the non-profit sector do some unpaid overtime compared with 29% of their counterparts in the for-profit sector.

After adjusting for demographic variables and for the possibility that unpaid overtime may be motivated by the prospect of promotion or bonuses, it concluded that people working in welfare services in the non-profit sector are 12% more likely to do unpaid overtime than those in the for-profit sector.

The authors point out that:

[The] estimate of the premium suggests that an additional 120 million hours are donated in the public sector compared with similar people working in similar jobs in the private sector. This is equivalent to an extra 60,000 people.

But before we get to the unlikely scenario of advocates of keeping the NHS (and other public services) public using the argument that the private sector is bad because it fails to extract unpaid labour from its employees, its worth noting that the researchers did not find that people changed behaviour when they moved between the for-profit and non-profit sectors.

Where does that leave us? Perhaps the research strengthens the case for a mixed economy in public services. The existence of non-profits and for-profits may allow better matching of people to the sector and the motivational structure that works for them. Of course, non-profits cover a range of models and the research did not explore the interesting question of how public sector or third sector employees may work differently.

Thoughts on pay: declining pay rises

Pay is in the news a lot. If its not local government workers striking over pay rises below inflation, its Carol Vorderman saying that a 90% pay cut doesn’t add up for her.

On her podcast, the management columnist Lucy Kellaway condemned Mervin King for not taking part of his remuneration package as Governor of the Bank of England. She suggested that if a chief executive declines a pay rise, he (or she) should be dismissed for presiding over a dysfunctional pay system. She advocated sacking remuneration committees as a solution to excessive pay.

Before public and third sector organisations sack anyone, they should check that their remuneration committees demonstrate best practice in terms of rigorous scrutiny of pay and performance.