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.