The Housing Green Paper and the need for action

Today’s housing Green Paper will make interesting reading.

There was coverage in the Financial Times yesterday on the broad outlines of the Green Paper. The Building newsletter suggested that the "comeback for council housing" will involve Special Purpose Vehicle partnerships being developed between councils and either private developers and housing associations. I hope it will create opportunities for the ALMOs and new forms of social and co-operative housing like community land trusts.

The need for action on the housing crisis was further highlighted for me by an article about young people renting space in empty commercial property. It is an interesting and more mainstream variant on the squatting movement’s use of empty housing.

Board remuneration: over-laden pack animals on public and third sector boards

I won’t make a habit of quoting the accountancy press, but an article in Friday’s Accountancy Age did make me think. It asked who would be a non-executive director?

It suggested that it was “disconcerting” that NEDs were expected to have expertise and knowledge from accounting to law as well as bear the burden of multiplying risks like “over-laden pack animals”.

The article was mainly concerned with FTSE NEDs, yet according to the Independent Commission on Good Governance in Public Services there are over 450,000 people in the UK who hold governance positions (excluding local government councillors). They are governors in schools, hospitals, police authorities, housing associations and national public bodies.

Many – probably most – of those huge army of board members and governors in the public and third sectors are unpaid. This is a credit to British civil society.

It is inevitable (and often desirable) that the larger boards and governing bodies of larger organisations will move towards more professionalised governance – in the sense of “board remuneration”. However, it would be sad if the voluntary ethos was lost.

The over-laden pack animals – loaded with more and more risks to think about - will increasingly expect carrots.

Boardroom battles - lessons for governance and appraisal of chief executives

Boardroom battles - with the resignation of both a chief executive and a Chair (ex-MP Kerry Pollard) at William Sutton Homes - have recently raged within the Affinity Sutton group, one of the largest housing association groups in the country. Such problems aren’t very helpful in terms of reputation, partnerships, etc.

If you are curious about the publicly known (and complicated) details, I’d recommend a look in Inside Housing or the Borehamwood & Elstree Times.

More importantly, I think all organisations – whether housing associations, third sector or whatever – should have a quick look at their procedures for chief executive appraisal. (I fear that internal auditors don't often review this area - something for audit committees to ponder.)

Chief executive appraisal appears to be at the heart of the Affinity Sutton problems. It is not unusual either – before now, I’ve been asked to review the problems arising chief execs leaving.

Generally, I believe that the performance review of chief executive is a critical but neglected function of governance. It is easy to forget the basic but easy things like documenting appraisals and ensuring board members are aware of the results of appraisals. Of course, appraisal arrangements have to be well thought through and clear to all concerned where there are parent and subsidiary organisations in a group structure – as with Affinity Sutton and William Sutton.

Let Affinity Sutton be a lesson to us all.

The future of ALMOs - through the community gateway?

It was interesting to read in this week’s Inside Housing that some arm’s length management organisations are looking at the community gateway model of stock transfer pioneered in Preston.

As I've said before, I am a big fan of the community gateway model as a form of mutually owned and led housing association committed to supporting and working through resident involvement. The community gateway was designed to reassure residents doubtful about stock transfer and traditional forms of housing association.

If some ALMOs move towards stock transfer into community gateways that is good news for ALMO residents. However, I hope that we continue to see ALMOs surviving and prospering beyond their contract contracts to manage council housing. ALMOs are keeping council housing in municipal ownership while introducing new and better management than what went before.

Of course any change in the status of ALMOs must be with the consent of residents. (Defend Council Housing would love to see any evidence of the "two-stage privatisation" that they have sought to scare council tenants with.)

Changing charities and delivering public services

This week’s Society supplement in Guardian had a balanced and thoughtful article by Adam Sampson, the chief executive of Shelter. It explored the issues faced by increasing involvement of voluntary organisations (aka the third sector) in bidding for and delivering government funded work as part of the government's reform of public services.

Sampson concluded:

Rising to the challenge being dangled by the government is not the problem. It is finding a way to deliver more without compromising what makes us unique in the first place.

The article contrasts with some of the thinking coming from Nick Seddon at Civitas (an “independent” but pretty traditional right-wing think tank). Seddon advocates denying charitable funding to charities that deliver government funded services.

Some of Seddon’s analysis got an airing on the BBC’s recent Analysis documentary on Changing Charities (the transcript is still available).

While there are organisational dilemmas and challenges for the third sector in delivering government funded work, I believe that much of the third sector is up to it and can make a vital contribution to a mixed economy in public services.

A new word to learn: over-policying

On today’s Business Daily on BBC World Service, there was reference to over-policying in the USA. Over-policying is having a policy for everything. Sounds familiar?

Anyone in the UK public sector and many outside will be conscious of over-policying – and often ground down by it. Sometimes it is a requirement of legislators and often regulators. With initiatives and fads, the canon of policy accumulates at an incredible rate.

I am a believer in the policy governance model developed by the American organisational guru John Carver. In this model, governance is largely about setting ends and determining certain prohibited means – with the title “policy” used sparingly to refer to these ends . (Probably best to read one of his books for a proper introduction!)

Too many organisations use the words “policy” and “procedure” interchangeably. And then give the board members or governors shed loads of paper at every meeting to give them the illusion of being “in control”.

Little time is spent on consolidating policies. Even less on making them consistent. (When I do work on governance with FE colleges it is usual for “whistle-blowing” policies to be inconsistent with - or even contradict – anti fraud policies.)

More generally, rather than delivering change and improvement, the focus is on writing new policies which will gain dust on the shelf.

Sometimes Orwellian technology is introduced to make sure staff read policies, sign-up and then get pass marks in a little test.

I probably sound cynical, but I’m not. Surely it doesn’t have to be this way?

While organisations cannot avoid the demands of legislators, funders and regulators, they can try to avoid over-policying. Instead of rushing to introduce a new policy, perhaps they could think first:

1. Can this policy be integrated into an existing one? If so, consolidate them
2. Is this policy consistent with an existing one? If so, make sure.
3. Can this policy be made clear and concise? Of course, you can try.
4. Is this really a policy at all? If not, call it a procedure or whatever, which management can adopt without bothering board members or governors.

New council housing - welcome but ...

While the commitment to dealing with the housing shortage was evident, it was unclear from Gordon Brown’s not-the-Queen’s-Speech whether we are to see a revival of council house building.

There has been much speculation about council house building. I welcome the prospect (with caveats) although I am wary about the “Fourth Option” advocated by Defend Council Housing. I favour linking reform and investment in social housing as much as elsewhere in public services.

If there is to be more council housing, we need to be sure that:

1. There is no return to the mono tenure estates of yesteryear. Any new council houses should be in a mixed and sustainable communities.
2. There is capacity in terms of design, build and project management generally. As council house building has not happened for a couple of decades, council may be lacking some of the skills required. That will mean councils teaming up with partners such as housing associations.
3. The new council homes will be well managed – the obvious candidates are the high performing Arms Length Management Organisations. (These organisations are hated by the Defend Council Homes campaign but are proving great for their tenants as shown by so many good and excellent inspection reports.)
   

The red tape cutting challenge: regulatory reform and public services

In the last week of the Blair era the Cabinet Office published Cutting bureaucracy for our public services (pdf available). Hopefully this document will not be lost in the reshuffle and “change”.

It is easy to mock a document talking of Simplification Plans and targets for reducing targets as well as bragging that “the Department for Communities and Local Government has pledged to cut 800 Local Government targets to 200”. (I’ve seen “bureaucracy-busting” in the FE sector - and not much red tape was blown away.) Nevertheless the strategy should be welcomed as it recognises:

So targets and inspections have a critical role to play. But as we move into the next phase of public sector reform, it makes sense to look to see what unnecessary bureaucracy there might be and what more we can do to empower the front-line to respond to the wishes of the public.

This shift was evident in the late-Blair thinking on public services and reform. The strategy promises:
The commitment to better regulation in the public sector will be led from the very top. Lets hope it still is.

One novel element of the strategy is the commitment that:

everyone [in public services] has the opportunity to suggest ideas for reducing burdens, including those on the public sector through the www.betterregulation.gov.uk website.

The strategy commits Whitehall to respond to ideas or suggestions within 90 days, outlining whether they have been taken forward and explaining why a particular decision has been made.

Those on the front line in public services (and their unions and other representative bodies) should take up this challenge.

Maintaining trust: PIs, partnering and housing associations

According to the BBC, the Housing Corporation has launched an investigation after 5 Live Report alleged that it had uncovered evidence that a leading housing maintenance firm had falsified performance figures.

The case does raise some questions on how housing associations can be sure that performance information is reliable. I would certainly suggest that associations:

1. Periodically commission external validation of performance indicator systems whatever the future of social housing regulation is. (I declare an interest - I do PI system validation.)
2. Ensure that their audit committees (and, hence, their internal auditors) do consider the robustness of PI information - including PI collected by contractors and used to monitor partners

The alleged problems do make the case for associations (and other not-for-profits) creating a culture that stresses ethics both in within the organisation and in what is sometimes called the "extended enterprises" - not least suppliers and partners. Whistleblowing policies are a key part of this.

Profile of a fraudster - internal controls, financial loss and reputational risk

I do applaud the work of the KPMG sponsored Audit Committee Institute. It provides a useful resource for audit committee members in the private, public and third sector (and those involved in corporate governance outside audit committees) even if a lot of its work is focused on big private sector entities. In the latest Audit Committee Quarterly published by the Institute there is an interesting article on the profile of a fraudster.

Based on a major study of fraud cases by KPMG International, the research finds that 85 percent of fraudsters are male. The typical fraudster is aged between 36 and 55. By the time he starts enriching himself by illegal means, he has usually been employed by the company for six or more years. He typically works in the finance department and commits the fraud single-handed. In 86 percent of cases he is at management level – and in two thirds of cases he is a member of senior management. Greed and opportunity are his motivating factors.

Some of that isn’t new. But it is a useful reminder of how tighter internal controls, more widely publicised fraud reporting mechanisms and an anti-fraud culture are important. They are normally worth it. Total financial loss caused per fraudster was more than 1m euros in almost half the cases in the study.

Amongst the cases KPMG analysed, in Europe the highest proportion occurred in the public sector (29 percent of cases). That is fairly in line with the rest of the economy given the size of Europe’s public sector. It shows that the professional ethos, caring professions, the relative absence of "profit motive", etc can't entirely innoculate the public sector from fraud and the less desirable aspects of human nature.

The article doesn’t refer on reputational damage but that can be significant - perhaps potentially outwearing financial loss, sometimes aggravating it. An American accountant at a large not-for-profit was convicted of fraud associated with funding a dominatrix. No one likes to drop their coins into a collecting box if it will end up in an accountant being whipped or walked over in stilettos.

Parliamentary scepticism on efficiency gains

Last week the Treasury select committee issued its report on The 2007 Comprehensive Spending Review: prospects and processes.

Interestingly the report noted the National Audit Office’s concerns about the robustness of measurement processes for efficiency gains. The Treasury committee addressed these issues in its conclusions:

We recommend that the Government ensure that a clearer performance measurement framework is established for the efficiency programme from 2008-09 onwards, including a greater role for external audit of service quality than hitherto.

It also recommended a coherent framework for the verification and reporting of savings on a consistent basis as part of the forthcoming Comprehensive Spending Review. (It also qureried the value of the fairly arbitrary head count targets that have been adopted.)

I would personally have recommended a healthy scepticism to almost all fanfares, reports, etc on the size of efficiency gains being delivered. I'm all for efficiency (better procurement, lean processes, more productive time and the rest) but I suspect that too many figures are affected by wishful thinking and sloppy measurement.

Getting rid of consultants - NAO launch toolkit

Everyone (or at least many people) hate consultants. There has been plenty of discussion and media coverage about the numbers of consultants (“Blair’s barmy army”) and the cost of them to the public sector. So it is interesting to see that the National Audit Office is trying to help central government departments to secure efficiency gains in this area.

(I should declare an interest as I work with FE colleges, housing associations and other organisations delivering public services on governance and finance - the clue is in the heading to this blog.)

The NAO has launched an interactive toolkit for use before commissioning consultants. It is meant to provide an analysis of areas of weakness, guidance on how to improve value for money and good practice case studies. Presumably the toolkit is just as relevant to other public sector and not-for-profit organisations outside Whitehall.

The NAO toolkit is available at www.nao.org.uk/efficiency. Unfortunately when I tried using it, it didn’t work.

Interest rates - the pain for some public services (but not all)

Today the Financial Times is predicting a quarter point increase in interest rates next week. The Bank of England may be setting interest rates at 6% by Christmas.

As I’ve noted before, this is not only bad news for families with mortgages or other debt – but it adds to the pressures on many providers of public services such as further education colleges and housing associations. Hopefully some of the pain will be eased by finance directors thinking ahead and managing these risks.

Many general further education and sixth form colleges are now borrowing as an integral part of property strategies aimed at transforming tatty buildings into “world class” places of learning. Interesting school sixth forms don’t have to borrow as their capital needs are met 100% - not a very level playing field!

It goes without saying the providers of public services will have to raise their game on finding efficiencies. Otherwise we’ll be back to a world of cuts.

Cave Report - the single regulator and resident scrutiny panels

The Cave Report on social housing regulation (a pdf is available of the full report as well as an executive summary) has arrived at last! It is a pity that the government appears to be lukewarm on the recommendation of a single regulator for social housing. Surely Cave was right to query the silos in social housing regulation - why should ALMO or council tenants be regulated differently from housing association tenants?

Many of the Cave recommendations were perhaps heralded in advance.

My only initial criticism would be that the idea of resident scrutiny panels as a form of accountability is supported but does not feature very prominently in the report. I would argue that such panels can be more effective forms of voice for tenants than one or two tenant board members - especially for the increasing number of large social landlords.

Third Sector - the DCLG's strategy and the NAO's findings

The Department for Communities & Local Government’s heart is in the right place. Its Third Sector Strategy discussion paper (mentioned here when it was issued) does propose practical ways of making the department more Third Sector friendly as well as developing community asset ownership.

Whether or not the Third Sector Strategy will be enough to protect community and voluntary organisations from the tightening of public finances (and the associated Efficiency Agenda) is more doubtful. Moreover, small Third Sector organisations face many of the regulatory burdens of any other small business.

Last week the National Audit Office issued a report on Local Area Agreements and The Third Sector: Public Service Delivery (pdf available). This noted that the new LAAs which cover an increasing amount of local government funding have not been used to create for “a level playing field” Third Sector organisations competing with other suppliers. Thankfully some of the recommendations are already in DCLG’s Third Sector Strategy document.

Social enterprise in the NHS - not tilting at Windmills

The Kings Fund and several other key players in the debate about NHS reform ran a a two-day simulation event of a health economy model from 2008 to 2011. The publication Windmill 2007: The Future of Health Care Reforms in England (pdf available) draws out the main findings from the exercise involving more than 100 participants including clinicians, managers, policy-makers, regulators and analysts.

On the subject of the role for social enterprise, Windmill 2007 queried whether this was "a missed opportunity". It noted:

The government has supported the development of social enterprise as a means of combining commercial rigour with the benefits and values of the third sector. However, within the NHS, the model is poorly understood – by both commissioners and providers – and it is questionable whether social enterprise will operate on a scale that will enable it to become the model for mainstream service providers.

Let us hope the government, NHS employers and the representatives of NHS employees read the report and act on the recommendations. These include PCTs preparing their directly employed staff to work at arm’s length or outside the NHS and the Royal Colleges and other representative bodies enabling their members to understand and prepare for change.

Social enterprises (and through them professionals, patients and communities) playing a leading role in healthcare in a post-monopoly NHS is an opportunity that shouldn’t be missed.

Regulation of social housing - the Dutch model

The Cave Review on the regulation of social housing is due to report soon. It was due in “the spring”. (Spring must have been officially postponed.) It is unlikely to favour the kind of self-regulation favoured by the National Housing Federation and some (definitely not all) of its housing association members.

For some time Dutch social housing and its self-regulation has engendered much enthusiasm among some housing circles. (Perhaps understandably when you visit the Netherlands and housing seems so much better there than here.)

Interestingly the Dutch housing associations have come in for stick recently. The director of the Dutch government's bureau for economic policy analysis said that there was too little supervision of Dutch housing associations. He argued that they were building too few houses and putting their money instead into other things.

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.

Need for third sector to respond to the DCLG strategy

The Department of Communities and Local Government has published a discussion paper in preparing its Third Sector strategy.

DCLG says that it wants to hear from the third sector about the proposals in the discussion paper.

The Third Sector needs to engage with this consultation. Alongside the traditional consultation process, there is a web forum on the issues.

A quick skim read of the discussion paper suggests that DCLG has not taken on board the possibility that the Third Sector may be a casualty of the “efficiency agenda” and tightening public finances at local level. Likewise there is no direct reference to the burden of red tape on small organisations in the Third Sector.

Good news on waiting lists - but lets not forget the flaws of targets in the NHS, housing, etc

It was welcome to read some good news about the NHS on Friday.

The NHS is on target to achieve the "historic goal" of eliminating long waits for treatment. By the end of 2008, no patient will have to wait more than 18 weeks from GP referral to hospital admission.

The chief executive of the King's Fund observed that the NHS had made "huge strides" forward. (Of course, it should do given the huge injection of resources.)

The Health Minister Andy Burnham was quoted by the Independent as saying: “I don't believe there should be further national targets for the NHS." (And certainly No 10 was thinking in terms of shifting the balance of public sector reform away from over-reliance on central targets.)

Let hope this is so. Targets have perhaps been a necessary evil – but they have harmful effects. They focus on what is measurable to the detriment of others concerns; they have unforeseen consequences (as with GP appointments); they encourage can encourage manipulation of data; they often centralise power in the hands of the target-setters rather than the customers etc.

One effect that I believe is often overlooked is a threshold effect. Where targets are set in terms of triggers or thresholds – as in waiting times less than 18 weeks – there is effort to get cases just over (or under) the threshold with cases failing the target getting relegated on To Do lists.

The classic case for me is responsive repairs waiting times for housing association. Generally emergency repairs are completed within 24 hours, urgent repairs one week and routine repairs one month. The average repairs times will be just inside the thresholds for the later categories. For the repairs that miss the target, the completion times will often be very long. If you are a housing association board member and don’t believe me – ask the managers at your housing association for the data.

Trades unions, mutualism and public services

Just when it seemed like enthusiasm for the third sector was universal, it appears that the General Secretary of the TUC has not heard of it. Brendan Barber writes in Public Finance magazine about "public value" and reform of public services simply in terms of the public sector and the private sector.

The trades union movement should be encouraging new mutually owned forms of public services which empower both those who work in public services and those who use them. After all the trades union movement and the co-operative movement grew as comrades in the nineteenth century.

Jerks and the public sector

The McKinsey Quarterly carries an interesting article on jerks in the workplace and building a civilized workplace.

In the article Robert Sutton argues for zero tolerance of harassment of workers. A “no jerks” policy as adopted by the software company Successfactors.

The article lists the “dirty dozen” seen with workplace jerks:

1. Personal insults
2. Invading coworkers personal territory
3. Uninvited physical contact
4. Threats and intimidation, verbal and nonverbal
5. Sarcastic jokes and teasing used as insult delivery
6. Withering emails
7. Status slaps intended to humiliate victims
8. Public shaming or status degradation rituals
9. Rude interruptions
10. Two-faced attacks
11. Dirty looks
12. Treating people as if they were invisible

The article discusses calculating a Total Cost of Jerks. It quotes one company where one star salesperson—generated additional costs of $160,000.

Jerks are a problem in all sectors of the economy. How much do they affect productivity in public sector organisations like the NHS?

FE colleges - the cinderella of education policy

My curiosity about the post-Blair future for public services led me to start reading Over to you, Mr Brown by Anthony Giddens - the guru of the Third Way.

It is a fairly interesting read supporting a move away from state monopolies in public services.

What disappointed me was that Giddens started to write about “universities and colleges” in the section on public services – but as you read on, it was clear that he wasn’t at all interested in further education colleges. He was only referring to higher education.

For him “universities and colleges” is all about universities teaching degrees courses. (Like at Cambridge University and the London School of Economics - where he worked.) What about the FE colleges that do so much to give learners skills for citizenship and for the workplace?

Giddens isn’t unique – the parties and the media often overlook FE and the hundreds of thousands of young people and adult learners in colleges.

Gordon Brown and public sector reform

The Brown government’s views on public sector reform are somewhat hard to discern although the pace of change in the NHS may soon be slower. However, there is an interesting debate on reform going on.

The Society section of the Guardian website is carrying both an article by a former Downing Street adviser and a selection of views on the role of choice in changing public services.

Although I see choice and competition in public services as a driver for improvement and efficiency, the cartoon above does amuse me.

NHS under-spend - "boom and bust" lives on

It was depressing to read this week that the NHS had under-spent £500million as a result of a starvation diet in the latter months of 2006/7. (The under-spent was achieved in some areas by a sharp change of gear with the temporary introduction of maximum waiting times despite the minimum waiting times so central to NHS objectives.)

The diet was required to avoid the political embarrassment of the NHS £90billion budget being overspent by a pound.

Isn’t this one of the strongest arguments for the NHS being considered a set of healthcare entitlements rather than a nationalised industry?

In January the Reform think tank published an analysis on NHS developments that policy that policy was marked by “stop-go” (NHS reform: the empire strikes back, pdf available). It’s a pity that the NHS is still infected by “boom and bust” in contrast to a wider economy marked by stability and success.

Juries, boards and diversity

While recently traveling on crawling Russian trains and decrepit ex-Aeroflot planes I have been able to read some books. My holiday reading included the book by James Surowiecki on The Wisdom of Crowds. It is an interesting set of essays on the effectiveness of collective wisdom - collective wisdom even trumping individual experts. (He does explore when and how groups don't work as in stock market bubbles.)

I would recommend that you read the book if you haven't already. (Its been out a couple of years.)

I was particularly interested in the chapter on Committees, Juries, and Teams. Many of Surowiecki's comments have a bearing on governance and management.

Surowiecki argues that juries are either verdict-based (starting with the verdict and working back) or evidence-based. He also points to the influence on group decisions of the status and talkativeness of individual group members.

In making small groups work better Surowiecki stresses the importance of diversity of group members. This militates against "groupthink" and improves the chances of a "devil's advocate" emerging who can challenge and test the evidence and recommendations being put forward.

I see Surowieck's arguments supporting the case that boards and governing bodies should have a real social, gender, ethnic and skill mix. This isn't "political correctness" or just "tokenism" (although it can be, if done badly) - it is a vital contribution to making decision-making more effective.

Police, performance indicators and customer service

The claims from the Police Federation that Performance Indicators are distorting police work is hardly surprising.

The stress on PIs seen throughout public services is perhaps accentuated in the case of the police due to its peculiarities.

When I last visited my local police station (a minor motoring offence, I hasten to add), it wasn't open at the advertised hours and the bell/link to another local station that was (also) meant to be open just rang and rang. When I phoned to complain later, I discovered that the local constabulary had no mechanism for complaints unless it was about bent coppers. (Perhaps I was misinformed - if I was, thats not too impressive either.)

What other public service would consider normal or reasonable the absence of a feedback loop in the form of assessing and addressing complaints? Housing associations aren't only expected to have complaints processes - but they are meant to have one that does feed into performance improvement through organisational learning.

Surely there needs to be a focus on building a culture of customer service rather than just focussing (and perhaps manipulating) a set of PI "metrics".

Apologies for the scarcity of postings

I’m not able to log on much at the moment. Normal service will resume soon.

Maxwell: the "Bouncing Czech", leadership and public services

(To be precise Bob Maxwell was a Ruthenian from the borders of modern Ukraine and Slovakia rather than a Czech.)

I am disappointed to be missing this week's BBC2 drama about Bob Maxwell.

Maxwell was living proof of the saying (from Russia or Scandinavia or Japan – you choose) that “the fish rots from the head”.

According to the management writer John Argenti, corporate collapse is associated with:

- One-man rule
- A non-participating board
- An unbalanced top team
- A lack of management depth
- A weak finance function

The public and not-for-profit sector has seen its share of collapse and scandal – and in deed many of those symptoms (and causes) listed. Not long ago there was the Barnsley College trial which highlighted some of the problems.

While public services reform is ongoing (and vital), there remains the need to strengthen governance in public services.

Public services need strong leadership – but not the all-powerful strong Leader.

Rising interest rates and public services

Naturally the discussion of interest rates focuses on the impact on families with mortgages, credit cards, etc – especially if there are suggestions that interest rates of 7.5% might be required.

But interest rates have major implications for public services.

For example, many Further Education colleges have embarked on (or are proposing) ambitious “accommodation strategies” driven by the Learning and Skills Council’s commitment to “world class buildings” – if interest rates rise on the loan finance required, life becomes much harder.

Toilet paper, efficiency and sustainability

While I have several Sheryl Crow CDs, I do not agree with her call for eco-rationing of toilet paper.

Having said that, I do think that public sector and not-for-profit organisations should be linking the efficiency agenda with the cause of sustainability.

How many housing associations, FE colleges, charities, etc have sought advice from the Carbon Trust or similar organisations on reducing waste in the consumption of energy?

Affordable housing and "Key Workers"

The Financial Times this week criticised the government's investment of resources in housing to help a few thousand "Key Workers":

For the price of the average London home, you could get a brand new Ferrari 599 with enough left over for a passable second-hand yacht. For nurses and police officers in London and other parts of Britain - so called "key workers" - stratospheric house prices are a problem. Government housing subsidies only make the problem worse: if houses are to be affordable, the only answer is to build a lot more of them.

I share this sentiment.

I must say that I also have a problem with the whole concept of "Key Workers" - what about the rest of us? Teachers, nurses and other front line public sector workers are vital (and for a long time they had worse pay than other similarly qualified professionals), but I'm not convinced that non-Key Workers should be treated less favourably in the housing market.

If those deemed to be "Key workers" are leaving their professions because they can't afford to buy in London and other high demand, wouldn't it be better to pay them more? And if necessary, have local pay settlements that reflect local conditions?

Controlling pandemic flu in 1918 and business continuity in public services now

I am a bit doubtful about the preparedness of much of the public sector and not-for-profit sector for a pandemic flu outbreak - as I've already mentioned on this blog.

Recent American research on the 1918 pandemic (which killed more people than world war one) has considered how different cities responded. Using mathematical models, they reported that large differences in death rates could be explained by the prevention measures, particularly their timing. Cities that instituted quarantine, school closings, bans on public gatherings and other such procedures early in the epidemic had peak death rates 30 percent to 50 percent lower than those that did not.

Are our public services ready for the kind of business disruption likely to result from pandemic control measures – let alone any outbreak itself?

Social housing regulation - tenants' views

Recently the Department for Communities and Local Government published the output of the tenants’ focus groups for the Cave Review of social housing regulation. (The document can be downloaded.)

As you’d expect from a series of focus group meetings there were a variety of views expressed. Important themes can be found in the key findings:

- local management arrangements in organisations of a “human scale”;

- a common framework and regulator for all housing organisations – including the private sector;

- removing benefit dis-incentives that discourage tenant involvement on boards;

- a national organisation giving tenants a voice alongside the Audit Commission, National Housing Federation and the Chartered Institute of Housing; and

- more choice for tenants – including choice of landlord.

I agree with all those – and have argued on this blog for them!

Hopefully the Cave report will reflect the views of tenants.

The radical, critical and thoughtful contributions of tenants to the housing debate contrasts with the empty rhetoric and anti-housing association stereotyping in this month’s Red Pepper Housing Special (I’ll be cancelling my subscription) or on the Defend Council Housing website.

NHS independence day - coming soon?

Today’s Financial Times carries an interesting article about plans being prepared for greater independence for the NHS.

I am a sceptic about proposals for an NHS constitution and “independence” unless such moves enshrine and promote choice and voice for patients and communities.

The idea of less central interference from politicians and Whitehall is welcome. But can politicians sit on their hands when they get the blame – rightly or wrongly – for everything that goes wrong anywhere in a £90 billion business?

Efficiency, annual savings and the CSR07

Tucked away on the Treasury website among the pages about the 2007 Comprehensive Spending review (CSR07) there is the comment that:

Through this work the Government has identified scope to deliver annual savings of 3 per cent across departments over the CSR07 period, together with cuts to administration budgets of 5 per cent per year in real terms, thereby releasing resources for reallocation to frontline services.

Is that really possible?

I have my doubts. There is work throughout public services on leaner processes, smarter procurement, cost reduction, etc. But is there enough?

In February the National Audit Office cast doubt on the robustness of some of the existing efficiency claimed against current targets of 2.5% annual savings. The NAO could be certain of about a quarter (£3.5bn) of the savings claimed by the government. But queried the rest.

The Local Government Association has just issued various documents on the CSR07 including a factsheet on efficiency issues. It points out that the easy savings have been made and not all spending can be made more efficient due to long-term contracts. The LGA conclude that the 3% annual savings are “undeliverable”.

The new annual savings in the CSR07 will be vital for maintaining and improving public services in a more bracing environment for public finances. Unless public services can deliver on these savings and work a lot smarter, we could be faced with cuts rather than efficiencies over the rest of the decade.

Blair, Brown and public sector reform - diversity of providers

Last week's government's policy review document on Building on progress: Public services (pdf) included 11 references to a diversity of providers as well as a section entitled "Opening up supply".

But rewinding to last summer's Releasing the resources to meet the challenges ahead: value for money in the 2007 Comprehensive Spending Review (pdf) document published by (and concisely titled by) the Treasury last summer there was a list of the key elements of public service reform as:

1. establishing clear goals, national standards and accountability for performance;
2. devolving decision-making to the frontline and improving the capability and capacity of public servants;
3. engaging public service users and communities in the design, delivery and governance of public services; and
4. empowering users, including through the exercise of choice.

No mention of diversity of provision there. In 55 pages there is only one reference to "diversity and competition among providers" - in the Foreward by the Prime Minister and Chancellor of the Exchequer.

Does this mean anything? A lot? Perhaps not. It does cast some doubt on the suggestion that the velocity of reform will be sustained under a Brown premiership.

FE Governance - does size matter?

On yesterday's The Bottom Line on Radio 4 (available on Listen Again for one week), there was a discussion about the optimal size of project teams. One of the business people suggested that six or seven was the best size with the maximum practical size being - with complexity of communication increasing exponentially above that.

That wasn't a revolutionary or unique insight - there has been plenty of research on the size of teams - but it struck me that many governance "teams" are a lot bigger in public services.

In social housing the National Housing Federation is encouraging small boards - urging housing associations to avoid having boards more than 12 members. Things are different in Further Education colleges, where governing bodies are typically about 18 members - normally coming from particular constituencies.

Big boards and governing bodies have to constantly confront the risk of degenerating into talking shops. Sir Walter Puckey could have been talking about FE governing bodies when he commented:

Too many board meetings display verbosity among a few and almost complete silence from the rest.

Its not the fault of FE colleges. The Instrument and Articles constituting governing bodies, creates a one-size-fits-almost-all template with limited flexibility around the edges. (There have been cases of FE colleges seeking even larger governing bodies than required by the Instrument and Articles - often after mergers where there was felt to be a need for 11 a side or whatever on the new governing body.)

While the Department for Education and Skills can reasonably have some rules on how governing bodies are constituted, why can't FE colleges be allowed to try new approaches and constitutions that reflect their specific requirements, culture, history, etc?

If "super-colleges" emerge with large turnovers and varied activities, there will be an even stronger case for allowing colleges to try forms of governance more akin to plcs with small boards - perhaps including executive directors. (This form of governance may emerge happen by the backdoor if the private sector take over the activities of failing colleges through contestability.)

There is certainly a need for the voice of customers, staff, local authorities, local civic society,
etc. But would this be better served through some kind of stakeholder council influencing strategy and holding directors to account? This is the model developed with NHS Foundation Trusts.

Even if such a model isn't considered appropriate for any FE colleges, it would be good see smaller and more effective boards and governing bodies.

The budget - the real story for public services

Wednesday's budget will be a budget for business according to Gordon Brown in the Financial Times today.

It'll be a budget for social policy - education, families and welfare to work schemes - according to a Brown ally, John McFall, on ePolitix today. (The ePolitix podcast is notable also for its dropped plastic cup, the rustling of papers and the emergency services sirens in the background.)

The certainty is that the real event is the Comprehensive Spending Review - with a tightening of public spending constraints and a greater expectation that public services will have to deliver "more for less" through efficiencies.

Monte Carlo: public services and risk management

I was pleased to read in Inside Housing that the Housing Corporation is to require the use of Monte Carlo scenario modelling in appraising the capacity of housing associations to deliver development programmes.

The article is not very clear on what Monte Carlo modelling is. Essentially it is a tool for factoring in uncertainties into financial forecasting. Uncertain variables can compound or counteract each other – Monte Carlo techniques factor this in and calculate a most likely outcome as well as a broader range of outcomes. (Apologies to investment analysts and other experts.) The Housing Corporation published a short paper on the use of Monte Carlo models as a risk management technique a couple of years ago. (Be careful googling "models".)

Generally I don’t like regulators telling independent organisations what to do. But I do hope that other funding bodies will encourage organisations, such as FE colleges, to use scenario modelling.

Far too often organisations delivering public services are only asked to forecast a single future - a gross simplification and dangerous too. In a world in uncertainty in terms of inflation rates, interest rates, pay rises and funding levels, it is vital that organisations manage risks – especially when they are being asked to embark on ambitious plan to build (and borrow for) more homes, new campuses, etc etc.

Regulation in the news: the NHS and social housing

Red tape is in the news this week.

According to the NHS Confederation, bureaucracy in the NHS is increasing with 56 bodies having a role in inspecting, assessing or monitoring the NHS. Is this necessary? (Report pdf available.)

With greater patient choice and more diversity of providers there should surely competition should replace regulation to some extent at least. Regulation should focus more promoting competition among providers (like OFCOM and other regulators) and disseminating information for “consumers”.

There is the on-going debate about regulation in social housing with the Cave review. This week Inside Housing has an interesting overview of the arguments from the various interested parties. (Sadly the article is not on the IH website.)

I strongly favour proposals for contestability and “choice based management” with the tenants able to exercise choice when their landlords fail them. This mechanism has been suggested by the Audit Commission in their submission to the Cave Review.

Affordable housing and community land trusts - more than talk?

On Saturday I went to the annual conference of the Labour Housing Group. The key note speaker was the Labour MP and former housing minister Nick Raynsford who spoke about the successes of the Labour government (particularly the decent homes standard and improving the quality of social housing) as well as the challenges ahead – notably the need for more new build to meet housing need.

In the afternoon there was an interesting discussion on the issue of mutual home ownership. David Rodgers of the CDS spoke on how these offer the promise of affordability with:

1. The public sector transferring land to a community land trust at nil cost so home buyers only buying the bricks and mortar.

2. The residential property being bought through a co-operative entity with the members buying equity stakes in the entity’s units in a manner similar to a pension fund.

(More information, including A simple guide to Mutual Home Ownership, is available on the CDS website.)

This does sound like an effective mechanism for enabling local people to get on the housing ladder in high cost areas. It has been supported by the Labour party and Liberal Democrats. It now appears to be a Conservative party “policy initiative”. It also figured in the recommendations of the Affordable Rural Housing Commission.

Let’s hope there is some action on this - as well as talk. It appears more promising than the suggestion that of 10% shared ownership.

Further education colleges and choice

This week’s debate about Brighton & Hove City Council’s approach to over-subscribed schools (“lottery” to the media; “equal preference” to the Council; “random selection” to the experts) was interesting.

The issue has arisen from the need to manage fairly the challenges of schools choice. (I’d recommend the podcast on schools choice from Bristol University’s Centre for Market and Public Organisation for background on these kinds of issues.)

For a long time I've been waiting for the simple idea of choice arriving on the agenda of the further education sector. There is now lots of talk of “personalisation” and “contestability” (for the uninitiated - reducing barriers to entry for new providers). Recently “learner choice” has been spotted in the pipeline.

Yet since the creation of the Learning & Skills Council (and to some extent before) there has been pressure for mergers. While some mergers have made sense – particularly where well-managed colleges have effectively rescued weaker ones – others seem to have been driven by a belief in rationalisation and reducing to the sector to 150 or so colleges. There is a real risk that the scope for learner choice as well as the impetus for innovation and the possibility of meaningful benchmarking could be merged away.

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.

E-government and Neighbourhoodfixit.com

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

At Mysociety's neighbourhoodfixit.com 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 writetothem.com

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.

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.

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.

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.

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.

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.

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.

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.

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?

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.

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.

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.

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.