An open book
The government wants to extend the Freedom of Information Act to cover housing associations. So, would the move help tenants hold their landlords to account or waste precious time and money? Lydia Stockdale finds out
What does he want? Transparency! When does he want it? Now!
At last year’s Chartered Institute of Housing conference housing minister Grant Shapps called on housing associations to follow the government’s lead to open up to more public scrutiny in a bid to help them drive efficiency and provide a better service to tenants.
Mr Shapps used his speech at the conference to announce that the Ministry of Justice would consult social landlords on whether to extend the scope of the Freedom of Information Act to include housing associations, many of which receive substantial public investment.
‘Housing associations have a long and distinguished track record of providing the affordable homes millions of tenants rely on. But with more pressure on the public purse than ever, all organisations that receive public investment should become more transparent and open to the taxpayers who put the pennies in the purse,’ he said.
Because housing associations receive public funding, Mr Shapps believes they should be subject to the same transparency arrangements as full public bodies, such as local authorities - and this includes having to respond to FOI requests.
‘I’m delighted that housing associations will soon be consulted on whether they should be included under the Freedom of Information Act,’ he said at the conference. ‘Transparency is not just a nice-to-have add-on, it is vital for driving down costs and ensuring more is achieved with every taxpayers’ pound.’
The Ministry of Justice has since informed the National Housing Federation that proposals to extend the Freedom of Information Act to housing associations are likely to be brought forward during 2012.
‘We are consulting housing associations as part of our ongoing consultation with more than 200 bodies with a possible view to including them within the scope of the Freedom of Information Act,’ a spokesperson for the Ministry of Justice confirms.
John Bryant, policy leader at the NHF, says the organisation ‘expects further discussions with the Ministry of Justice in due course’.
In the meantime, Inside Housing understands some associations have been contacted by the Communities and Local Government department, which is gathering information about the kind of transparency tenants want to see. So what would responding to FOI requests from members of the public and the media mean for housing associations? And would the move really make the housing sector more transparent for tenants?
It’s safe to say that the NHF, which represents 1,200 housing associations in England plans to argue against the government’s proposal to make its members subject to FOI requests. ‘Our concern is that they may add administrative burdens on housing associations,’ explains Mr Bryant. ‘This could take valuable time and resources from their central function of providing much-needed affordable housing.’
Indeed, figures published by global economics consultancy Frontier Economics, show the average cost of responding to a single FOI request is £293.
David Orr, chief executive of the NHF, believes housing associations are already open enough. ‘Social landlords have routinely published chief executives’ pay for 15 years, long before the practice became common in other sectors, and they make public board members’ pay, annual reports and accounts,’ he says.
‘Effective tenant scrutiny - in the form of tenant surveys, tenant panels and mystery shopping - plays an important role in ensuring they are open and accountable organisations operating for community benefit.’
Debbie Larner, head of practice at the CIH, believes housing associations have bigger things to worry about at the moment.
‘There are massive challenges for them to deal with and this is a distraction,’ she says. ‘Organisations are saying the government doesn’t need to push us down the right road - we absolutely don’t need legalisation to make us transparent.’
Bigger fish to fry
The pressures Ms Larner refers to include the fallout of the government’s Welfare Reform Act, which received royal assent last week, and the fact that, from next month, social landlords will be finding their feet under their new regulator, the Homes and Communities Agency - which will place greater emphasis on value for money. Whether responding to FOI requests will offer value for money to tenants, and indeed the taxpayer, is something questioned by even the most transparent organisations.
In line with Mr Shapps’ department’s own transparency policies, Viridian Housing, which owns nearly 16,000 homes, will begin publishing expenses over £500 in just a couple of weeks’ time. It will also make information about salaries over £50,000 publicly available. The organisation has decided to make this bold move because it wants to meet its ‘obligation to tenants’, explains chief executive Matthew Fox.
‘We think there’s a change in expectation about what being appropriately transparent means,’ he says. ‘We are subject to a new standard from our regulator about value for money - the best way they can decide that is if they have supporting information. We want, in time, for people to really understand the information.’
Nevertheless, Mr Fox draws the line at FOI being expanded to cover organisations like his. ‘We do think that the Freedom of Information Act is probably aimed at those who have a democratic mandate,’ he says.
Viridian’s efforts to make more details available to its tenants have resulted in it giving existing employees additional work to do. ‘At this stage we are not recruiting extra staff,’ he says. However, if the Freedom of Information Act was to incorporate housing associations, Viridian has calculated it would need to take on two new employees. ‘We don’t think that would mean value for money for our customers,’ he says.
Mark Henderson, chief executive of Home Group, the first organisation to begin publishing expenses over £500, continues to try to find new ways to be open with its tenants. For example, the 54,000-home landlord has set up e-petitions so that residents can show support for subjects they want their landlord’s board to discuss. If more then 200 people sign a petition, it is added to the board’s agenda.
‘There’s more work to be done around making information understandable,’ Mr Henderson says.
‘It’s particularly important we give “context” to the information.’
But the former Northumberland Council chief executive has personal experience of dealing with FOI requests, and he does not believe his organisation should be obligated to provide information under this legislation. ‘Responding to FOI requests takes huge amounts of effort and resources,’ he says.
When Mr Henderson was at Northumberland Council before joining Home Group in 2008, ‘the local press had people full time firing out questions’, he recalls. ‘Some were asking for entirely right and sensible information, but often the requests for information that had already been published. [The journalists] then claimed stories were a “scoop”, but the information is publicly available.
‘Too many media organisations used FOI to create silly stories instead of using it to hold organisations to account,’ Mr Henderson says, citing one particular request that asked about the amount his local authority spent on tea and biscuits.
If housing associations are open and transparent there should be no need for FOI, Mr Henderson believes. ‘Organisations should already be accountable to customers in a way that they need,’ he says.
Fair playing field
Like many in the housing sector, Mr Henderson questions why the government is singling housing associations out. ‘There are lots organisations are very similar to housing associations in terms of government grants,’ he says, pointing to organisations such as Network Rail, security firm G4S, services company Serco and any of the private house builders in receipt of Homes and Communities Agency funding including Taylor Wimpey, Bellway Homes and Bovis Homes.
The CIH’s Ms Larner offers some explanation when she says, ‘the rhetoric is that stock-holding local authorities are subject to FOI, so [the government] doesn’t see why housing associations shouldn’t be’.
However, housing associations stress they are not public bodies - if they were, their private debt (which totals £40 billion according to Tenant Services Authority figures for 2009) would need to be placed on the public sector balance sheet - and nobody is likely to want that, points out
Whether or not this would be the case is questionable, says Lynn Aglionby, lead partner for information law at Trowers & Hamlins.
‘We just don’t know until the consultation is published,’ she says. ‘It could be that the Freedom of Information Act will apply to everything, or just the parts of housing associations’ businesses that are connected to public funds.’
If housing associations are eventually made subject to the Freedom of Information Act, ‘they will be classed as a public authority only for the purposes of the act but not generally’. The government is currently advocating housing associations should voluntarily publish all their expenses over £500 - whether this will have any impact on the decision to make them subject to FOIs remains to be seen, she adds.
Home Group’s Mr Henderson believes every organsiation, whether public or private, should want to be open about how they spend their money. ‘Transparency is good for business. It helps the business understand itself better,’ he concludes - but emphasises that the extension of FOI to housing associations would be unnecessary and costly at a time when housing associations are already facing huge challenges.
The housing sector has no qualms in joining the housing minister in his call for greater transparency, but he can expect stiff opposition over them opening their books to FOI requests.
The price of freedom
More than 121,000 requests under the Freedom of Information Act were made to public sector organisations in the UK in 2005.
This cost £35.5 million, according to figures gathered by global economics consultancy Frontier Economics, for a report entitled Independent review of the impact of the Freedom of Information Act, which was commissioned by the previous government and published in October 2006.
The average time taken to compile the information needed for a single request is 7.5 hours at an average cost of £293, says University College London’s constitution unit’s analysis of the statistics, The cost of Freedom of Information, published in 2010.
However, Ben Worthy, research associate at the unit says these figures are generally believed to be ‘very generous’, and that, ‘the cost of FOI is very difficult to calculate’.