Repairs revolution or DIY disaster?
In two months’ time the government plans to roll out a scheme which pays tenants in England to carry out their own repairs. Here, Simon Brandon examines the tenant cashback pilot projects to find out what lessons have been learned
How good does this sound? In April last year, the Communities and Local Government department trumpeted a new scheme that could be worth ‘billions’ to social tenants and local businesses. Housing minister Grant Shapps said it ‘could lead to tenants receiving cheques in the post worth thousands of pounds’.
The idea sounds simple enough: pay tenants to carry out their own low-level repairs. If a fence needs a new coat of paint, for example, a landlord could remunerate their tenant for the work, who could then do it him or herself or even shop around for a decorator and pocket the difference. The landlord - whose average annual spend on repairs and maintenance per property is £1,000, according to the government - saves money and time; the tenant earns a bit of cash, and perhaps even learns some new skills. Sounds like a win-win so far.
The Tenant Participation Advisory Service has given the idea cautious support. ‘I am a big fan of anything that encourages people to do things for themselves, because I think it delivers value for money,’ says Nigel Long, head of policy at TPAS, before adding: ‘Let’s see how it works on the ground.’
Three social landlords - Home Group, Together Housing and Hastoe Housing Association - have recently begun pilot schemes and the government is aiming for an April 2012 roll-out across England. So is tenant cashback likely to be a repairs and maintenance dream or a complete nightmare? How have the three main pilot projects fared so far?
Already this simple-sounding idea has turned out to be rather complicated in practice. As we reported earlier this month (Inside Housing, 6 January), allaying insurers’ concerns over liability for injury or damage has been a problem of varying severity for each of the participating landlords.
Hastoe’s pilot is still grounded as a result: its operations director Anne McLoughlin-Flynn says her 4,000-home organisation is ‘working through the detail … this includes ensuring we have the appropriate insurance cover for Hastoe and our residents’.
The others have had more success, but in each case the twin spectres of insurance and liability have curtailed their original plans. Uptake by tenants has not, so far, been particularly enthusiastic, with Home Group having signed up 160 tenants and Together Group just 20.
But there have been successes to report, too. The two up-and-running pilots, both funded by the housing associations themselves, only began in earnest in October. Although their approaches have turned out to be very different, each reports a positive effect on the communities involved.
The real question, however, is whether this idea is financially sustainable. Can landlords find the crucial balance between financially incentivising tenants and saving money themselves?
As yet, that question goes unanswered - both Together Housing and Home Group say it is too early to tell whether tenant cashback will be financially viable for their organisations in the long term. They will produce reports at the end of their pilots in April and October.
Also, how are housing organisations planning to tackle problems thrown up by the scheme, like false claims and the potential for tenants to claim for jobs that don’t really need doing?
Well, Together Housing and Home Group are not paying tenants per repair, so there is no risk of fraud. Instead, participants are rewarded in lump sums for maintaining their properties to a mutually agreed standard.
The organisations carry out regular checks to make sure the tenant is upholding their end of the agreement.
So, for example, if a list of agreed repairs includes re-hanging kitchen cabinet doors, when a door in a resident’s kitchen comes loose, they should fix it. The cabinet doors will be checked at the next landlord inspection - if they meet the agreed standard, whether they have needed to be repaired or not, the financial reward is still paid.
All social landlords will be required to offer opportunities for tenants to be involved in maintenance services from April. However, the government is not being prescriptive about exactly how this should happen.
The Communities and Local Government department has stated that housing organisations will have to start their own tenant cashback schemes, but it’s up to them to decide how it will work. It’s likely that other social landlords will encounter the same challenges as the pilots - so read on to find out more.
Developing pride in the community : Together Housing
Size: 35,000 homes
Signed up: 20 tenants
Annual repairs and maintenance spend: Green Vale Homes and Twin Valley Homes - the two housing association members of Together Housing involved in the pilot - spent £4.1 million and £6.6 million respectively on repairs and maintenance in 2010/11
Pilot cost so far: £4,000
Together Housing Group was formed in April 2011 after the merger of three housing associations in the north of England. Two of its partner associations, 3,674-home Green Vale Homes in Rossendale and 8,500-home Twin Valley Homes in Darwen, both in Lancashire, offered to pilot the scheme, but their plans soon had to be drastically scaled back.
‘During consultation with our insurers and the Health and Safety Executive [the national independent watchdog for work-related health, safety and illness], we decided we had to back off what we originally wanted to deliver,’ says Ian Rumsam, Together Housing’s head of repairs and maintenance.
‘It is a statutory obligation for us to maintain those properties, and we cannot transfer that,’ he explains. ‘By training our tenants to carry out low-level responsive repairs on their properties and incentivising them to do that work, you have the possibility of creating an employer/employee relationship.’
And once you do that, Mr Rumsam adds, you leave yourself ‘wide open to litigation’ if they are injured.
Together Housing decided to take a different, less ambitious approach. It focused its efforts on areas with poorly maintained housing and a high demand on its housing management services, and offered to reward tenants living there who could demonstrate they were sticking to the terms in their original tenancy agreement.
‘An awful lot of tenants only really look at the tenancy agreement once, and that’s when they sign it,’
Mr Rumsam says. ‘We have resurrected the importance of it, and we have identified exactly what it means to manage a property in-line with the tenancy agreement’.
The agreements include stipulations of works that should be carried out by the residents as a matter of course - keeping the garden clear of rubbish, for example - but which are not always carried out. Together’s plan is to use the carrot of financial reward (£60 over six months, split into three payments of £20) rather than the stick of intensive housing management to get tenants to look after their properties and the surrounding areas.
It has already produced some ‘brilliant results’, Mr Rumsam says. But the scheme will be made harder to sell in the future, as Together aims to remove the financial incentive after the pilot ends. The housing association hopes that once tenants are engaged, they will want to continue maintaining their homes without needing to be rewarded.
‘If there is no incentive [tenants] may not want to engage as actively,’ says Mr Rumsam. ‘But at the same time, we have developed a lot of pride within this community, and most people who become proud remain proud. We are hoping it works out [after the pilot], but that remains to be seen.’
Together will not report on any savings made until the pilot ends in April.
Eliminating the risk factor: Home Group
Size: 51,000 properties
Signed up: 160 tenants
Annual repairs and maintenance spend: £76.1 million in 2010/11
Pilot cost so far: £20,000
Home Group has rolled out three pilots in different parts of England. Problems around insurance and liability have affected the 54,000-home landlord’s plans, but the organisation has found a way through.
‘[The added risk] was raised as a specific issue at the beginning by our risk team, our legal team and our insurers,’ says Rosemary du Rose, Home Group’s executive director for customer services. ‘We asked them what would overcome the situation.’
Tenants who volunteer to participate in the cashback pilot now have to sign up to a set of terms and conditions, as well as taking out home contents insurance with an element of personal liability. It was also decided to exclude flats from the pilots to remove any risk to residents living above, below or beside the property on which work was being carried out.
You can never fully negate the element of risk, as Ms du Rose admits, but this is a position with which the landlord, its insurers and tenants who have signed up, are happy.
‘It has been a relatively good take-up,’ says Ms du Rose. The target was 250 tenants, but attracting signatures proved harder than expected. ‘They thought it was too good to be true,’ Ms du Rose adds. ‘Marketing it was a challenge.
We found the best way of getting sign-ups was for housing officers to talk directly with customers.’
Geography aside, the three schemes differ in how their participants are rewarded. Tenants taking part in Egremont, Cumbria, are given a four-week rent holiday in return for sticking to the terms and conditions. Those in Middlesbrough receive a payment of cash or B&Q vouchers in advance, with a second payment offered six months later. The third group, in Braintree, Essex, will receive their award in arrears - the first payment six months after the start of the pilot, with a second payment after a year.
‘We are trying to see what works best over the course of the pilot,’ says Ms du Rose. The reward in each case totals £400. ‘That has helped us attract people, but we are waiting to see whether that fits commercially.’
Home Group is waiting until October when its pilot ends before it determines the costs and benefits of tenant cashback.
So far, however, Ms du Rose is cautiously optimistic. ‘We know what it costs to maintain a property over a year… early indications show that we are seeing a 50 per cent reduction in the number of repairs to [participating] properties.’
So far, so good. But there is a measure of mitigation here, too: ‘Remember this time last year [late December] it was very bad weather, and this year it has been good weather. We want to see what happens over 12 months, and we will have to take out those seasonal trends.’
The tenant’s view
‘We got a letter in the post. Me and my friend thought it was a gimmick to get us to do more work,’ says Anne Imeson, a 67-year old Home Group tenant from Middlesbrough and a cashback pilot participant. ‘But we thought we’d go to the meeting with an open mind.
‘We were all given leaflets about what the pilot scheme contained and what we had to do. I couldn’t believe people called [the housing association’s repairs service] out to put light bulbs in. The majority of work on this pilot I was doing anyway.’
The list includes the specific jobs tenants are expected to perform, such as gardening, painting fences or fixing dripping taps.
Rewarding tenants who, like Ms Imeson, are already carrying out these kinds of low-level repairs could end up as a net cost to the landlord, but Home Group’s executive director for customer services Rosemary du Rose doesn’t see it that way.
‘If they are maintaining their properties to a high standard, our customers have said, “why not reward us for doing that?”’ says Ms du Rose. ‘It is good role modelling, good customer behaviour. We were hoping for some of that.’
Ms Imeson, meanwhile, is happy to be recognised for the work she does, and her reward is likely to be reinvested in her property, too. Both she and her neighbours have been given vouchers to spend at B&Q. ‘I’m going to keep mine for screen plants,’ Ms Imeson says. ‘My neighbour who just moved in has joined the scheme, so she used the B&Q vouchers to decorate.
‘It’s only early days, isn’t it, but I’ve had no problems. I can’t knock it.’