Friday, 28 April 2017

Digital revolution

Welfare reform has placed a heavy burden on social landlords’ resources but results from an exclusive new survey reveal that many organisations are turning to technology to lighten the load. Jess McCabe reports

Luddite machine breakers in the 19th century risked everything when they destroyed the early labour-saving technology of the industrial age. They were losing their jobs to machines, leaving them in destitution. But today’s housing professionals aren’t too worried about being replaced by a robot or an iPad app.

Instead, an exclusive survey by Inside Housing and outsourcing firm Capita completed by 485 respondents reveals that housing professionals are overwhelmingly hopeful about the digital revolution, and the promise it holds to help them cope with welfare reforms. Many of these reforms, such as the bedroom tax which affects tenants with spare rooms, and universal credit, which combines many benefits - including housing benefit - into a single monthly payment direct to claimants, are expected to hit social landlords hard, as tenants struggle to pay their rent.


Social landlords hope technology can reduce this burden, by saving them money. If they can encourage tenants to become more tech-savvy, there are additional benefits because the government’s ‘digital by default approach’ to universal credit means claimants must make their applications online.

Roger Birkinshaw, housing director at Capita, notes that under universal credit, ‘there will be a huge bind on resources from a housing association’s point of view, in terms of assistance and helping people’.

‘It’s in their best interest if universal credit applications are completed correctly. The housing association has then got a much better chance of being able to continue to get its income,’ he says.

The first of the changes brought in under the Welfare Reform Act 2012, such as the bedroom tax, are already beginning to have an impact, our survey confirms. Three out of four survey respondents say the number of tenants in rent arrears is already increasing, and 11.4 per cent have seen a rise of more than 20 per cent.

Twenty three per cent of survey respondents who reported increased costs of various kinds as a result of welfare reform say their organisations will react with staff redundancies.

So what does technology have to offer social landlords in these trying times? Can it help housing professionals and tenants survive the changes ahead? And can human contact ever truly be replaced?

Techno sceptics
Not everyone is buying into the digital revolution. Some of the housing professionals who completed our survey remain sceptical about potential technological solutions, such as encouraging tenants to use smartphone apps, to the challenges posed by welfare reform.


One respondent, who compared the idea that technology could produce efficiency savings to ‘putting lipstick on a pig’, reported that there is nothing to be done to ameliorate welfare reforms. ‘Our customers only come in [to our office] to say how dejected they are,’ they say.

Another respondent, who reported a 15 to 20 per cent increase in the number of their organisation’s tenants in arrears, says: ‘60 per cent of tenants on housing benefit don’t consider [interaction through technology, such as social media and using online forums] is a form of communication that reaches out to them. Face to face is more appropriate.’

Another pointed out ‘if people don’t have the money to pay, technology isn’t going to make them pay’.

Others expressed concerns that when the cost of new technology is added to the extra staff costs involved in dealing with the fallout of the government’s welfare reforms, they didn’t believe that savings could really be made.
Although this makes sense, the techno-optimists do have convincing numbers on their side. As well as rising rent arrears, most respondents said they are also receiving a larger number of phone calls, emails and face-to-face queries from tenants as a result of welfare reform. For example, 12 per cent report a 20 per cent or more increase in telephone enquiries as a result of welfare reforms. All of this spells one thing: rising costs for organisations.

We can get an idea of exactly how high these costs will be by looking at calculations showing how much each customer interaction costs local authorities, according to annual research carried out by Socitm, a membership body for IT professionals.

In 2012, answering an enquiry face to face cost a council £8.62 per visit, an enquiry via telephone cost £2.83, whereas an online enquiry cost just 15p a go - and this is falling.


Socitm projects that English councils could potentially save £134 million to £421 million a year by encouraging people to get in touch online.

Housing providers therefore hope that ‘channel shifting’ - or encouraging tenants to get in touch in less expensive ways - means they can claw back some of the lost income and increased costs involved in dealing with welfare reform.

Digital strategies
Perhaps it is not surprising that a massive 85.6 per cent of our survey respondents believe it is possible to make efficiency savings through the use of appropriate technology, with 64.6 per cent of these respondents believing that savings can be made in the area of online services.

Social landlords are already starting to take some of these steps, such as adding new functions to their website and building new apps, although just 11.4 per cent say their organisation has invested in new technology to manage the changes.

One respondent, Nick Atkin, chief executive of Halton Housing Trust, puts the dilemma bluntly: ‘Two thirds of our income is going to be at risk from universal credit. I need to shift a load of people to be collecting rent. The best-case scenario is that our arrears levels stay exactly like they are [3.4 per cent of rent debit].’

Mr Atkin says he hopes the trust’s new digital strategy, which it is in the middle of implementing, will cut down the number of calls it receives, as more tenants find the information or help they need online. This should allow it to free up 15 front line staff to be switched into rent collection, he adds.


In addition to this, 6,401-home Halton is already training a team ‘to provide much more intensive support for about 10 per cent of our customer base who we feel won’t be able to cope on their own’.

Halton believes that more tenants have come online in the past few years - but it is also considering more radical ideas to encourage late adopters to join the internet age, such as giving away cheap smartphones pre-loaded with the trust’s own apps, that will allow tenants to do things like report repairs and manage their rent accounts. As part of the deal, the tenants in receipt of the free kit will agree to access services digitally for a set period of time.

Many social landlords are in the midst of refashioning their ‘digital inclusion’ strategies, in the hope of encouraging more and more tenants to get online. This will be of even more importance when universal credit, which is being phased in from October, finally replaces a myriad of existing benefits, and tenants will be expected to apply to the government for it online.

Hounslow Council, one of the survey respondents, is in a typical position. ‘At the moment we are drafting a digital inclusion strategy,’ reports Stavroulla Kokkinou, the 16,500-home west London borough’s welfare reform manager. ‘We are looking into various options to increase people’s access to the internet, such as having some sort of pop-up internet café that’s mobile, that we can take out to residents.’

Other ideas include providing internet-enabled computers in the reception areas of council buildings, and training up community volunteers to help some of the borough’s less technically adept residents to get online - although this can pose problems in relation to the confidentiality of the data involved in things like completing a universal credit application.

But even when tenants are safely online, at the moment there are still limits to how much of their interaction with their landlord can be carried out digitally. Based on our survey, it’s safe to conclude that landlords do already communicate with tenants by such varied means as email (almost 70 per cent), and social media (42.3 per cent), and the less-popular set-top boxes (6.8 per cent).

That said, if tenants want to pay their rent, check if they’re in arrears, report a repair, make a complaint, or interact with their landlord in other ways, they still might not actually be able to online.


Even the functions that are most popular, such as making a payment or a complaint, are only possible on the online offerings of about half of our survey respondents’ organisations. Just 25.7 per cent of respondents enable tenants to review their rent account online. So it’s surprising that about a quarter of respondents either agree or strongly agree that their organisation already provides the full range of digital services.

These are not exactly the ultramodern housing associations of the future - the feedback given by those who completed our survey suggests many housing providers will need to work to catch up with standard services offered by the average mobile phone or utility company, or bank.

Customer demand
Boris Worrall, who has the forward-thinking title ‘executive director futures’ at 36,000-home Orbit, explains that currently just 5 per cent of the landlord’s customers access services online. By 2020, it has a target of increasing this to 75 per cent. ‘That’s going to require a lot of hard work,’ he acknowledges.

As well as welfare reform, the other big driver behind this ambition is demographic change, he adds. In the future, more tenants will simply expect services to be available via a smartphone app or website.

This is backed up by our survey results. Nearly half of respondents already either agree or strongly agree that ‘the customer expects 24/7 convenience store access to services’. And although the largest proportion - at 30.1 per cent - of respondents are neutral on whether smartphone and smart device service channels are essential, 38.5 per cent either agree or strongly agree, and just 1.8 per cent strongly disagree.

Capita’s Mr Birkinshaw expresses surprise that expectations of the importance of 24/7 digital services is relatively low.

‘I would expect it to be 99 per cent would strongly agree,’ he says. ‘We’ve moved into it [accessing digital services at all hours of the day] in other sectors, why wouldn’t social housing move into that?’

Mr Worrall stresses that the change isn’t just about technology and ‘kit’, but also a change in culture - this includes the use of social media to have a two-way exchange with tenants.

‘Residents want [us] to get it right first time. They also want a customer interface that is less formal, that is more immediate,’ he says.

In other words, a way of interacting that is more like social media - even if it’s not actually taking place on Twitter or Facebook. Orbit is looking at numerous other ideas - including developing apps that housing professionals can use when assisting tenants with financial inclusion and energy efficiency advice.

That said, the end of the human housing officer isn’t exactly nigh. Almost 60 per cent of respondents agree that ‘housing officer-assisted access to services will always be essential for some of our customers’.

As Hounslow’s Ms Kokkinou cautions: ‘There’s a small percentage of tenants who will definitely not be able to do that [use online services]. We need to be realistic - by ensuring that there is support for those people; support needs to be shaped to the individual’s needs. For example, not everyone can visit local offices to access the internet, there may be a need for the support to go out to them.’

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