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.