My View

Wednesday 10 October 2018

Housing should have a commercial head and a social heart 

I may be Chair of ALARM but my day job is in housing: a sector that is rarely out of the news at the moment.                    

Headlines have been made recently with a greater government recognition of the role the social housing sector can play in building much needed affordable homes in the UK. The government has opened the door and we have to step through it. By ‘we’ I mean the whole of the social housing sector. 

I believe housing associations fall into one of two categories. The first is made up of the smaller community focused housing associations, whose primary focus is to provide homes and often small-scale developments. This type of association tends to have a strong customer and community focus, delivering a more personal service through a strong social purpose. Equating this to retail, these are like the corner shop: traditional organisations with good quality customer relations that meet the core housing need in areas they know well. On balance, these housing associations tend to be risk averse and do not follow large scale commercial or development agendas. However they do have a significant part to play in meeting demand and providing high quality and affordable homes in communities. 

The alternative model is the larger, commercially savvy organisation that often evolves from a merger. These are housing providers in the broadest sense: large, regional or national organisations with development and growth ambitions. These providers deliver on their social purpose but it is fair to say they have a greater appetite (and capacity) for risk. Using my retail analogy, this is the Tesco: trusted brands providing services to the many, through a less personal approach than the corner shop. These associations have grand plans to meet housing demand across a variety of tenures and are more development driven.   

Both of these models have customers at the heart of what they do. They both offer quality developments and good customer service but in different ways, and to different markets. It is fair to say there is no such thing as a ‘typical’ housing association with a ‘typical’ risk profile! 

Achieving ambitions 

A heightened focus on value for money by both the regulator and central government has had a significant impact on the sector. The introduction of a sector scorecard in 2017, measuring efficiency and promoting greater benchmarking, is the sectors way in demonstrating to government that they provide strong value for money. By placing an increased emphasis on resource, associations are keen to make the right decisions using the right resources in the right way.  

As a sector it is important that we balance local need and aspirations with viability. We cannot have a whitewash approach to development, as market factors will influence what is built where (and why). We have to build the right units in the right location at the right time. Striking the right balance between development and customers is key to having a commercial head and a social heart. 

Five years ago I was a risk manager with insurance responsibilities for a local housing association, in the corner shop category. Now I am head of the business intelligence team for a merged housing provider with greater ambitions and capacity to deliver to both new and existing customers. We need to be more informed, more insightful and more analytical. We have to make the right decisions.  

One way to achieve this is by using market insight. When we consider our development plan I look at the local risk landscape; what the competition is doing; what tenure will work best; the physical environment; the impact on local customer satisfaction; and ultimately whether a scheme is viable. I need to consider risk in the round. I hope that by reviewing all the intelligence available I can help Beyond Housing to make better quality business decisions.  

Chris Walker, Chair, ALARM and Head of Business Intelligence, Beyond Housing. 

Comment on Chris Walker’s personal blog on the ALARM discussion forum.

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