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November 4, 2015

When bigger is not better

Adam Smith, the father of modern economics, conceived the theory of ‘economies of scale’.  The causal link between size, efficiency and profitability has dominated our thinking ever since. Particularly in relation to public services. But intuitively, albeit without much hard evidence, many people have long sensed that the mantra of bigger is better is deeply flawed. It’s a battle that the community controlled housing associations have been fighting for years, arguing that softer outcomes are as important as any of the hard metrics. And at last, here’s a report that flips Smith’s theory on its head.

Last year’s Charter report indicated that GWSF members (community controlled)  provide a high level of service as measured by key Charter indicators. This year’s report demonstrates that this has continued, and indeed improved. On twelve out of the 16 indicators, GWSF members (community controlled) as a whole show better performance than other RSLs or LAs. On 13 indicators, there is an improvement from the first year of the Charter. It is important to point out that not every member shows this improvement – on all the indicators, some members report a drop in performance. Tenants are obviously more interested in their own landlord’s performance, while the Regulator focusses on individual landlords rather than groupings such as GWSF. Particular issues that may require consideration are:

 • Achieving SHQS for some landlords

• Offering repairs by appointment, where this is not currently available

The social housing sector has responded to the Charter with improved performance, but GWSF has maintained its advantage over other landlords. This scrutiny of members’ performance supports the view that this position should continue.

To read the full report click here