In Social Housing the essential concept of ‘Value For Money’ has been distorted and rendered no more than a bean counting exercise. How could we possibly expect anything different when responsibility for monitoring and regulation on value for money was left to the bean counters.
The Homes and Communities Agency has warned that Housing Associations must improve their performance on value for money evidence or the regulator will step in. The HCA regulators want to see:
- Social landlords providing a common framework with value for money metrics against which to measure their performance.
- Transparency in value for money statements.
- Boards having clear focus on value for money and the information to hold their organisation to key measures around unit costs.
- A clearer correlation between size and efficiency.
- The next wave of mergers more focused on efficiency savings.
At first sight their expectations seem entirely reasonable but it is only when you look more carefully at what they want that the distortion becomes apparent.
The HCA approach to value for money is so focused on efficiency that it does not take into account the other essential aspect of value for money – effectiveness.
Now, we clearly want our housing providers to be efficient. After all, a lot of their income comes to them from the taxpayer through Housing Benefit for rent payments and we really do need them to be using that money well.
Equally important though is the quality of the service they are providing and just counting the cost of a service doesn’t tell you how good it is.
Take for example a loaf of bread. If you go to the baker to buy a loaf of bread, you want to know that you are getting a good deal and that means that the baker has bought ingredients at a fair price, has been efficient at converting those ingredients into bread, has minimised the cost of transporting the loaf to the shop and pays a fair wage to the shop assistant who serves you.
All of that can determine how efficient the baker has been in providing your loaf but it tells you nothing about what it tastes like. It could be that poor ingredients have affected the flavour. The baking method may have made the bread stodgy and the shop assistant might be surly and unhelpful.
So while the process may be efficient, the effectiveness and the quality is poor.
To find out how good the service is that each Housing Association provides requires a method for assessing what it is like. It used to be that housing quangos responsible for regulating Associations cared about how good the service was and included measures of quality in their regulation including asking tenants about their experience.
It seems that, in the days since the financial crash, the bean counters have taken over and all that matters is how much it costs.
Time for a change. Cost matters but so does quality and consumers very often are happy to pay more if the quality is good.