Housing Providers: Beyond Value for Money Statements

Posted on the 25th October 2018

The socially positive ethos that inspired housing associations in the 70s still applies today. Measuring one’s social impact is essential in countering the negative narratives cited by the press by providing housing associations with the language and evidence to exemplify how they are part of the housing market solution.

Housing Associations: A Brief History

On the surface, housing associations look like relatively straightforward entities. Yes, they manage properties and develop new ones, but they are far more than that. Despite many of them operating in accordance with standard business models, they are still committed to creating vibrant communities and championing their tenants due to their pro-social beliefs and philanthropic heritage.

The role of housing associations in the housing market is not something that is particularly new, and throughout our modern day history, they have been leading players in providing quality social housing, resulting in record profits of £3.5 billion in 2017. These developments came as a product of the changing political environment in the 70s, in which councils were strained by government policy, allowing housing associations to flourish through conversions of large-scale stock transfers (LSVT).

This was also made possible as housing associations were “commercial”, in the sense that they had direct revenue streams from their tenants, which were then re-invested directly back into the housing association ecosystem. However, some criticisms that circulate today, are that housing associations are becoming too commercial, losing sight of their socially facing philosophies.

The Role of Regulators

Social housing exists because it fills a very real, and ever increasing need. Housing associations create new homes, build communities, maintain their properties, and support the tenants within that community. They can fulfil these duties because of their steady income streams. However, despite their privatised status, housing associations are monitored by the UK government and operate in a regulated market.

One of the Regulator of Social Housing’s role is to ensure that social housing is an economically viable investment, with sustainable business models. They allot time to monitoring housing associations, using value for money (VFM) statements as the dominant way by which housing associations are judged. Whilst these VFM statements are extremely important, they have a heavy focus on economic outcomes. Should there be a more formal emphasis on social value impacts too, beyond standardised VFM expectations?

We believe the narrow focus on the economic value that is expected from the VFM statements to be self-limiting, leaving a lot to be desired in terms of measuring the true impact of a housing association’s investment.

Social housing has a unique and positive part to play in housing people, helping to create thriving, mixed communities, and meeting needs that the market will not.

Chartered Institue of Housing, 2018

Beyond VFM: Social Impact

Housing associations are not like commercial developers who simply build a set of units, take the profit and leave. Instead, housing associations are instrumental in place shaping, creating sustainable communities by investing in local jobs and infrastructure, allowing the communities to become more confident and making the location a desirable place to live. Not only does this improve life chances, but it also brings wealth to the local economy. Providing houses and opportunities for employment creates a virtuous circle, increasing local spend, having a knock-on effect on reducing anti-social behaviour (ASB), incentivising people to move there.

Not only is this advantageous for the community, but it is also beneficial for the housing associations themselves. The higher the rate of employment, and the less ASB, means that rent is paid and estates are better maintained – all of which have quantifiable costs to them. Thus, there are more funds available to re-invest back into the housing association to more effectively maintain housing, build new homes, and to offer grants for community projects –  activities that have a clear social value.

By measuring and evidencing social impact, housing associations can address some of the bad press. Many of the criticisms levelled at housing associations state that they have become too commercialised, losing sight of their community-facing ethos. We feel that these arguments show a lack of understanding of how housing associations work. The Guardian reported on how: in 2016/17 there were 22,858 affordable housing completions in England and only 597 were social rent, compared to 18,280 so-called “affordable rent”. However, they failed to understand that this was due to government policy, whereby there was simply no funding available for social rent. This is where the importance of measuring comes in. Providing data which evidences the social and economic outcomes of housing associations daily activities is key in reaffirming that they still adhere to their social mandates. If there was a readily available source of data about the social impact of housing associations then perhaps this would result in a greater understanding of their achievements.


Social Housing

Measurement Matters

One of the great things about housing associations is that they still reflect their founding ethos by wanting to show their social impact. Social outcomes are key in their mission to provide houses, bring people out of poverty, and improve the wellbeing of the communities in which they operate.

More and more the expectations of companies, including housing associations, is that they show their social impact, and are transparent about their corporate social responsibility strategies. Given the very nature of housing associations, this is something that they do particularly well.

Here at Impact Reporting, we are continually developing our social value reporting tool to enable housing associations to quantify their socially impactful activities and transform them into evidence-based data. We can identify the community impact, highlighting the value so that the organisation can leverage more funds, have confidence when presenting data to stakeholders and partners, and scale-up projects. Our tool was designed by housing associations for housing associations, so should you wish to learn more about the ways in which we can help track, monitor and report of your impact chat with us here.

About the author

Lee Smorthit

Marketing and Social Value Executive at Impact Reporting

Following the completion of his MSc in Digital Marketing Communications, Lee joined the Impact team in 2018 to set a marketing direction for the company, and to apply his research capabilities to further develop the Impact tool, ensuring that our software as a service (SaaS) is client-friendly and accessible.

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