HCA: Landlords must get better value for money
The social housing regulator has called on housing providers to do more to achieve value for money, after finding it cannot account for significant variations in costs between providers.
The Homes and Communities Agency has today published a piece of work examining reasons for cost variations in the sector. Understanding unit costs of housing providers: regression analysis uses 170,000 pieces of data to look at the impact of factors including regional wage differences, deprivation, group structures and types of homes, on cost variations.
The research found that the average operating cost per unit in the sector is £3,500 per year. Costs deviate by £1,430 per unit, and of these, there is a margin of error of £1,000. The document says: ‘Therefore, there is still considerable variability in costs – on average 29 per cent above or below the mean – which cannot be explained by the factors considered here.’
Matthew Bailes, director of regulation at the HCA, said: ‘There are clear differences between providers that our analysis cannot explain.
‘This reinforces the need for boards to have a firm grip on value for money and they should be considering a number of options, including driving out unnecessary costs, as part of their management strategies.’
The research found that the operating cost per unit is £750 higher in the most deprived areas compared to areas of average deprivation and that each unit of supported housing adds £7,000 to social housing letting costs.
The analysis also shows that reduced decent homes work and fewer stock transfers have led to downward pressure on costs.