We must be different

Imagine a world where everyone recognises housing association as leaders in social impact. We are some way from it. In proving our worth and value for money we are punching well below our weight.

Writing in Inside Housing, Julian Ashby - chair of the Homes and Communities Agency (HCA) Regulation Committee - says Value for Money (VFM) self-assessments have been seen as something to satisfy the regulator rather than an opportunity to provide compelling evidence to “a sceptical external world”.

Herein lies the problem. While the sector is quick to bemoan its public image it’s not so fast to publish compelling evidence of its impact and the cost of achieving it.

The HCA is right to question the differences in operating efficiency. However, efficiency isn’t the half of it - arguably the most important aspect of a social housing provider is ‘effectiveness’.

We need to overcome equating value for money purely with efficiency. Taking this hard-nosed definition drives behaviours such as reducing staff, dropping ‘non-core’ activities or seeking mergers.

“Cost cutting often fails to address inherently inefficient operating models.”

Cost-cutting often fails to address inherently inefficient operating models. The headlong rush towards merger as a solution is a false prophet; there is no clear link between the size of housing associations and lower running costs.

In singling out cost alone we need to be cautious. Social landlords come in different flavours and we need to be careful not to return to the bad old days of comparing apples with pears.

Benchmarking is a race to mediocrity. Sitting around with your peers comparing the way you do things is almost always a bad idea. It encourages organisations to think alike. At sector level it creates groupthink, and we all know groupthink is the enemy of innovation.

There’s no evidence that benchmarking improves performance - what works for one rarely works for another. In fact the very act of best practice and benchmarking can drive standards down.

Having a homogenous housing sector - all singing off the same hymn sheet - would be catastrophic. We must be different. We must resist a herdlike regression toward the mean.

This will mean more investment in research and development - something the sector ignored during an era of plentiful grant. The only way out of a productivity decline is to boost capacity for innovation.

The future of Value For Money

Associations often respond to requests for greater public VFM by saying that they are essentially private companies. “This is a responsibility for our boards - we need to preserve our independence,” being a common retort. This shows a woeful lack of understanding of our present, never mind our future. Public trust in organisations, institutions and government is already floundering. Only honesty and accountability can rebuild it.

We now live in a digital economy where leaders are under scrutiny 24/7. No organisation, no sector, is immune from the gaze of the harshest regulator of all: us.

In this new world a better option would be to default to transparency. Moving beyond VFM self-assessments and become truly open organisations. Publishing everything, even our biggest mistakes.

I frequently praise the work of Buffer, the social media company. Their transparency dashboard features details of their salaries, profit and loss, even their emails. It shows every financial transaction, almost as it happens. When they recently had to lay off a number of employees, they blogged about it, admitting the mistakes they made with their forecast. They talk openly about the products they are developing and get user feedback on them.

I pay Buffer about £7 a month for their services and can track where every penny of that goes. Has any housing association even begun to imagine what that could look like for their tenants?

Demonstrating this level of value publicly would have been hard work even five years ago. The onset of digital tools means that this is available to all of us.

Demonstrating our value will get even easier. The blockchain - the technology that supports the Bitcoin cryptocurrency - means that soon we’ll be able to track every pound circulating within organisations. What went in and what they did with it. A secure, yet fully public, financial and social ledger that records everything, forever.

The future of value for money will balance cost with impact. It will put greater emphasis on research and development and considered risk-taking. It will not wait for self-assessments but see smart organisations turning themselves inside out .

The future housing association will provide open all hours access, allowing you to assess why they exist, how they exist and how much you pay for them to exist.

Paul Taylor, innovation coach, Bromford