How will housing associations do more for less, asks report

Published by Max Salsbury for 24dash.com in Housing and also in Finance

Shared services and outsourcing may have a significant role in an emerging mixed market for housing associations, according to a new report.

The Chartered Institute of Housing's (CIH) report - Going to Market - analyses ways in which social providers can do more for less and suggests that the sector could utilise the emerging market best if it tapped into using shared services.

“Such an approach would require significant cultural change. Competition has often been about competing for government resources – it would require a different mentality to identify strengths and market these effectively to other service providers," said CIH senior policy and practice officer Joanne Kent-Smith, who co-wrote the report.

Going to Market aims to encourage debate in the sector and outline the issues associations need to think about when considering outsourcing or sharing services.

Its findings are based on interviews and visits to Circle Housing Group and Orbit, both of whom sponsored the report, interviews with a range of other housing associations and analysis of HouseMark benchmarking data for 2011/12.

Ms Kent-Smith added: “Outsourcing and shared services are useful tools which associations can use to help run their business, but organisations will need to be clear about: The potential risks around loss of skills, degradation of quality and unsustainable savings; and the absolute importance of good procurement and contracting arrangements and skills.

"The strength of any contract or partnership is reliant on the effectiveness of the client.”

While the report sees any ‘quick wins’ being likely to relate to back office services, it claims that associations with mediocre performance or high costs should consider outsourcing the management of some of their homes to provide a real comparison of costs and/or performance and potential opportunities for innovation.

Afzal Ismail, executive director of Orbit Services, said: “The housing sector is changing, especially in regards to the amount of funding we receive. We need to diversify our services and look at new income streams to continue to build communities.
"Outsourcing services can help this on two levels; firstly by creating an income for the service provider, but also by helping those who need support to continue to deliver their services, while keeping value for money in mind.”

Mike Ward, director of growth and mobility at Circle, added: “With all of us looking to get the absolute best value for money for our customers, the concept of shared services is one that we can see gaining real traction. As a large housing group we already deliver services on behalf of other organisations such as development and property management, and work with partners to deliver services where we do not have the skills in-house."

The report will be launched on March 20 during the National Housing Federation Finance Conference at the University of Warwick.