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October 21, 2009

Housing Regulator view is flawed

Outside of the high walls of the ‘housing silo,’ the phenomenal achievements of Scotland’s community based housing associations rarely get a mention. Now the future of these organisations is under serious threat. The present Scottish Housing Regulator’s views on efficiency, mergers, rationalisation and competition are as depressing as they are poorly evidenced, argues an alliance of housing associations from Easterhouse

Strengthening Fragile Communities: Community Based Housing Associations in Easterhouse
Briefing Paper for Glasgow MSPs
October 2009

Easterhouse Housing and Regeneration Alliance
Briefing Paper for Glasgow MSPs

1. About this Briefing Paper

1.1 The value that community based housing associations (CBHAs) bring to areaslike Easterhouse is recognised within our local communities and by politicians from all of the main political parties. But the current direction of housing and regulation policy in Scotland is placing our future under serious threat.

1.2 CBHAs in Easterhouse want to focus on a positive agenda for the future. Our priority is to make our communities safe, attractive and sustainable places to live. We look to all of Glasgow’s MSPs to help us achieve that, in considering the forthcoming Housing (Scotland) Bill.

2. Community-Based Housing Associations in Easterhouse

2.1 EHRA is an alliance of the eight independent, community-based housing associations (CBHAs) in Greater Easterhouse. We have worked together since 1991, previously as the Greater Easterhouse Community Ownership Forum (GECOF).

2.2 Our members own and manage around 3,000 houses in local neighbourhoods throughout Greater Easterhouse. In the last 15-20 years, CBHAs have transformed the housing and the physical environment of neighbourhoods throughout the area.

2.3 Because we are led by local people, our services have been highly responsive to community needs. Local leadership and control has also ensured that our housing investment has been sustainable, unlike “top down” approaches that have seen major housing investment being followed by demolition and the break-up of communities.

2.4 Easterhouse’s CBHAs have a highly localised, neighbourhood-based approach to housing management. Staying focused on local management and local solutions is critical, because of the deep-rooted disadvantage and social problems that affect our communities. As we show in this paper, all eight CBHAs in Easterhouse have gone beyond their original purpose as housing providers. We are now making a substantial impact in addressing the wider regeneration needs of our local communities.

3. Our Main Concerns for the Future

3.1 We are pleased that Ministers listened to the concerns we expressed earlier this year about Lead Developers and competition for Housing Association Grant (HAG). We hope its proposals for “Investment Reform” will now be re-shaped in a way that allows CBHAs to be directly involved in new house building. For our part, we are investigating how CBHAs in Easterhouse could work together collaboratively for this purpose. But in the meantime, the changes made to HAG subsidy levels in 2008/2009 continue to affect our ability to develop new housing on a financially sustainable basis.

3.2 We have focused in this paper on two more recent policy developments:

The draft Housing (Scotland) Bill published in April 2009, which is due to come before Parliament next year;

Statements by the present Scottish Housing Regulator (SHR), about the need for future restructuring of the Scottish housing association sector.

Taken together, these factors threaten the future of smaller and/or communitybased housing associations, which have proved so successful in disadvantaged communities in Glasgow and beyond.

3.3 Two proposals in the draft Housing (Scotland) Bill give us particular concern:

Registration as a social landlord in Scotland would be opened up a) to profitdistributing bodies, and b) to bodies from outside Scotland.

Existing registered social landlords, such as EHRA’s members, would need to apply for registration with the new Scottish Housing Regulator.

3.4 The Scottish Housing Regulator‘s recent report “Shaping Up for Improvement” sets out its views about the overall performance of Scottish social landlords. The report paints a negative picture, particularly in relation to local authority landlords’ performance.

3.5 We have no problem with the Regulator’s wish to promote continuous improvement in service quality for tenants, although its conclusions are poorly evidenced. Our real concerns are that the Regulator is intent on challenging the continued existence of smaller housing associations, and that in doing so the Regulator is assuming a policy-making role for which it has no proper accountability.

3.6 In “Shaping Up for Improvement”, the Regulator:

States that mergers between housing associations, rationalisation within the housing association sector, and “a more strategic view of how to organise housing management in particular local areas” are all key issues for the future.

Proposes a possible new role for itself in “… encouraging a mixed economy of providers and greater competition in the development and management of social housing as a way of securing improvement”.

States that “Some RSLs need to consider whether a governing body made up primarily or solely of tenants will deliver the sort of governance they need in more challenging times”. And that in relation to mergers and future structures, management committees need to “… think beyond themselves and their organisations for the greater good of the tenants and communities they serve”.

3.7 80% of Scottish housing associations own less than 2,000 houses each. And tenant-led management committees are associated overwhelmingly with CBHAs. So it is clear to us that organisations such as our own are who the Regulator has in mind, in announcing mergers and restructuring as priorities for the future.

3.8 The draft Housing Bill proposes a new system of social housing regulation, with the stated aim of “improving value for tenants and the taxpayer”. “Shaping Up for Improvement” offers an ambivalent view about how CBHAs measure up:

“We have seen that in some localities the higher management costs of smaller, community based organisations can lead to better housing management outcomes… But this is by no means always the case – community based or tenant-led organisations do not, in themselves, always secure good outcomes for tenants. We have also seen larger group structures emerge over the last ten years that benefit from economies of scale, a more strategic geographical canvass, and a more business-like approach to asset management”.

4. Efficiency and Performance: Some Hard Facts

4.1 The Regulator’s views about the efficiency and performance of CBHAs do notmatch the facts:

The Regulator’s inspection gradings1 show that CBHAs do generally perform significantly better for tenants than other types of landlords.

Our own analysis, provided at Appendix 1 to this Briefing Paper, shows that the overall performance results achieved by CBHAs in Easterhouse are:

−Better than the median results for all Scottish housing associations, on almost all of the measures we examined;

−Substantially better than those of GHA in all of the areas we examined.

4.2 We have also compared our service delivery costs (management and maintenance administration costs per house) on the same basis. To test the Regulator’s assertion that CBHAs have higher management costs than larger, regional housing associations, we included 7 of these organisations in our cost analysis (Cairn, Castle Rock Edinvar, Dunedin Canmore, Home Scotland, Link, Sanctuary Scotland, and West of Scotland). The results are as follows:

4.3 So, in two of the last three years, Easterhouse CBHAs have out-performed both the national average, and the larger types of organisations that the Regulator suggests are more efficient due to economies of scale. And for the whole three years, the median cost for Easterhouse CBHAs has been substantially lower than GHA’s costs.

5. Community Regeneration

5.1 One of the central aims described in the draft Housing (Scotland) Bill is to “improve value for tenants and the taxpayer”. But the draft Bill is based on a very narrow view of what value actually means.

5.2 People living in disadvantaged communities certainly need high quality houses and services that are good value for money. But they need much more besides, to address the root causes of poverty, poor health and lack of opportunity.

5.3 All eight Easterhouse CBHAs have a strong track record in addressing these wider issues, within our own neighbourhoods and by working together. The following table provides an illustration of our members’ involvement in different types of

community regeneration activities:

Supporting individuals to enter training or employment 7

Community safety initiatives (such as CCTV, crime reduction) 7

New/improved community facilities 7

Community capacity building activities 7

Community arts, cultural and recreational events 6

Local access to information/communications technology 6

Affordable local childcare 5

Community education or learning initiatives 5

5.4 In the last three years, these are some of the major outcomes we have achieved:

743 local people supported to enter employability-related training

211 local people supported into paid employment

More than £3 million of additional income generated for local people, through our welfare rights services

82 local childcare places provided.

5.5 Our community regeneration activities have been driven by the vision and leadership of local people. And our success in getting local people to use these services is a direct result of the physical presence we have at neighbourhood level, and the highly personal relationships we have with our tenants.

5.6 CBHAs’ community regeneration work carries immense social and economic value. For example, in improving people’s health and self esteem; improving the future life chances of children and young people; bringing more people into the economic and employment mainstream; and reducing benefit dependency.

5.7 None of these factors feature in the way the draft Housing Bill proposes to measure “value for tenants and the taxpayers”. Nor are they part of how the present Scottish Housing Regulator assesses outcomes and value for money. This needs to be addressed as part of the forthcoming discussions about the Housing Bill. Efficiency and value must be about much more than simple cost cutting.

5.8 We would like to see Glasgow’s politicians supporting the part that CBHAs can play as “anchor” organisations within our communities. We can offer statutory agencies a route to engaging with people who need their services at community level. And in the right circumstances and with the right support from partners, we can play a greater role in delivering community regeneration services.

6. Partnership Working: The Forgotten Factor?

6.1 The Regulator’s big idea for achieving greater efficiency and more strategic approaches to neighbourhood management is to promote mergers and restructuring. Again, this is a very narrow view. It ignores our members’ long and successful track record of working collaboratively with each other and with other agencies, on both strategic and operational issues.

6.2 EHRA works in a unique way. As individual housing associations, we are responsible for the management of our local neighbourhoods and accountable to our local communities. But we do not work in isolation. Through EHRA, we have had a sustained focus on promoting strategic approaches to housing investment and neighbourhood management across Greater Easterhouse. Our work as individual housing associations is very firmly rooted in shared strategic aims and on working together to achieve these.

6.3 Partnership working through EHRA has allowed us to achieve more than we could have as individual housing associations. And it has allowed us to achieve economies of scale, where the circumstances are right. We have provided more information about areas where Easterhouse CBHAs have worked collaboratively at

Appendix 2 to this Briefing Paper.

7. Conclusions

7.1 Some parts of the draft Housing Bill, linked to the present regulatory agenda, are bad news for Glasgow’s CBHAs and for our local communities:

Profit-making bodies and very large UK-wide housing associations could become social landlords in Scotland and receive HAG to build new houses;

CBHAs face a future in which we will have to continually justify our right to existence – instead of focusing on the positive things we can achieve for our tenants and communities;

CBHAs may be placed under pressure by the Regulator to enter into mergers or to “outsource” parts of our services to larger housing associations and/or private sector contractors, with a resulting loss of community focus and control. These are not the priorities of our tenants, who are far more interested in the quality of their homes, services and neighbourhoods.

7.2 We look to MSPs to subject the forthcoming Housing Bill to close scrutiny:

There is no demand from tenants to introduce profit-making bodies to the social housing sector in Scotland.

Entry to the Scottish housing sector is being anticipated by large UK-based housing associations, some of which have already opened offices in Glasgow. The Scottish Government should look to Wales, where recent legislation has restricted eligibility to be a registered social landlord to “Welsh bodies”.

The present Scottish Housing Regulator’s views on efficiency, mergers, rationalisation and competition are as depressing as they are poorly evidenced. It is essential that the Bill brought before Parliament carefully defines the new Regulator’s role in relation to policy-making. Otherwise, the new body will be able to make policy decisions that will affect thousands of tenants, without having any proper accountability to Ministers or to Parliament.