01 October 2004
Inefficient landlords face closer inspection
Housing associations have been warned to expect even closer scrutiny of their costs as the Housing Corporation embarks on light-touch regulation for some landlords.
The corporation's risk-based framework, announced at the NHF conference, held on September 22–24, should mean less regulation for about 100 well-run associations. In other cases, the corporation will focus on specific areas of risk or weakness. High-risk landlords without a good management record will be regulated more tightly than at present.
While the corporation is cutting regulation, it has vowed to continue putting pressure on registered social landlords considered to be inefficient.
However, following pressure from the federation, the corporation has changed the name of its 'efficiency index', published last month, to the 'operating cost index'. Jon Rouse, the corporation's chief executive, told delegates that the new name would be used when 2004 results are published next year.
But assistant chief executive Bob Dinwiddy stressed at a workshop on September 23 that the 'e-word' would not go away. He warned that further indexes or performance measures were in the pipeline.
Describing the index as a 'can-opener', he said RSLs should accept they will come under scrutiny from the corporation and their peers. 'If associations get a reputation for being inefficient, it is of little benefit to them or anybody else.'
Colin Sherriff, chief executive of Parkside Housing Group, told the same session that RSLs might think twice about some ventures if they are judged solely on cost. 'It would be a shame if the way the efficiency index is used was to drive us away from some of the things we do,' he said.
The new regulatory framework will be geared to the size of associations, the nature of their business activities and whether they can demonstrate competence, said Dinwiddy.
'We expect an association from which we have stood back to let us know if problems arise,' he added. 'We ought to be in a position to take rapid action when real problems emerge, but the quid pro quo is that we are engaged less on a day-to-day basis.'
Boateng talks up benefit reform
Radical housing benefit reform will help to reduce the number of tenants in social housing without jobs, Paul Boateng, chief secretary to the Treasury, told the conference.
A flat-rate allowance being piloted among private landlords would allow tenants to choose where they live and give them the opportunity to find employment, he said. Forty-five per cent of council and housing association tenants are out of work.
'We need to ensure that enabling them to access social housing does not prevent them from entering employment,' Boateng said. 'We must take steps to end the dependency culture that has come to pervade social housing.'
Landlords fear an allowance will drive up rent arrears because the money will go to tenants instead of directly to them. But he claimed the pilots had shown it enabled people to make claims more quickly.
'It is inevitable that allowing tenants to exercise real choice will bring more uncertainty and risk for landlords,' he told delegates. 'Managing the transition is going to be important. We are here to listen and learn and deliver this reform with you.'
Boateng repeated calls for greater efficiency made two days earlier by Deputy Prime Minister John Prescott. But he stressed that did not mean RSLs 'delivering worse services for less'. Earlier, he praised landlords for 'keeping the flame alive' during the 1980s and 1990s when housing was not as far up the political agenda as today.
'Despite the centrality that housing has to our welfare, for far too long it has been relegated to the footnotes of public policy,' he said.
'Fragmented and competitive' sector comes under fire
A troubleshooter called in when England's largest registered social landlord, Places for People, was put under supervision said she was stunned by the reaction of other housing associations.
Julia Middleton, who was a member of the PfP board for six months, told the conference that the affair had demonstrated that housing associations were 'perfectly horrible to one another'.
Middleton, chief executive of Common Purpose, a training provider, said: 'In other sectors, when one fails, you all jump to help. I was stunned by the glee.'
PfP was placed under supervision almost a year ago following governance rows. It was given a clean bill of health by the corporation in July.
Dame Gill Morgan, chief executive of the NHS Confederation, said health trusts saw RSLs as 'fragmented and competitive', while there was confusion over their relationship with the statutory sector. 'It's difficult to know who to deal with,' she said.
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