The recent Housemark report, “Raising the Bar”, poses interesting questions, with Inside Housing’s summary pointing to ‘significant challenges’ for the sector. In reading the report, I am reminded of the 2000-2010 period, which was dominated by the regimes of Best Value and Audit Commission inspections.
Arguably the standards that we see in routine service delivery have gone backwards since the Audit Commission inspection regime was abolished by the coalition government in 2010. Love it or loathe, and while it may have run its course before being killed off, there is considerable evidence that standards in service delivery had improved in that era.
When I first established Pennington Choices, I did some work for the Audit Commission reviewing early Best Value plans and reviews produced by in-house teams. Generally, they concluded that the service in question was ‘good’ but that improvements could be made ‘around the margins’. It was only when the inspection regime came along that many a bubble was burst, with ‘3 star’ ratings being thin on the ground. The propensity to ‘mark your own homework’ in an optimistic manner isn’t dishonest or lazy, it simply reflects the reality that as human beings we often see what we want to see, particularly where the reality before us is of our own design and making.
It’s worthwhile reminding ourselves that the ‘new’ consumer standards are not in fact new. At the core of them are the basics of being a decent housing provider and have been for as long as I’ve worked in social housing. None of us need telling that it’s not ‘okay’ to leave residents in unsafe or poor quality homes or to not deal with complaints.
We all like to think that the problem is ‘not us’. Past experience of the Audit Commission inspection era and indeed Housemark’s current analysis, together with our experience within Pennington Choices suggests that this is not the case for a lot of social landlords. 100% compliance across all property compliance areas should be the norm, not the exception. Would you choose to get on a plane with your family, from an airline that reported the level of health and safety compliance performance that the social housing sector currently does?
For as long as I can remember, when the sector has engaged in big-picture soul-searching at moments like this the conclusion often proffered is a need for better or more effective governance. In essence, Boards (and by inference, senior teams) are not doing enough to keep organisations on the straight and narrow. But why not? There are many bright, capable, and driven individuals as you would find anywhere else, and they are typically deeply committed to making a difference. Yet the sector’s end-of-term report feels very much like a ‘could do better’ message.
In the commercial sector, the market provides a natural and dynamic check and balance. Where service providers are poor, customers choose other providers, or those service providers don’t do well enough to create profit returns for their owners. The seemingly never-ending competitive process to be ‘better’ than the competition drives change, innovation with attendant risk taking, and holds organisations to account. Boards are focused on driving this, because if they don’t, then someone else will. It’s not a perfect model, but it largely works.
The social housing sector doesn’t have this context, so there is a natural tendency to drift towards ‘okay’ rather than to excel. This isn’t an argument that ‘private sector’ equals good and ‘public sector’ equals bad, often presented in the past, but rather a practical reflection of the difference in operating environments.
If we are to do better, then firstly we need to accept that ‘Governance’ as a tool for securing service performance is broadly as good as it’s going to get. Of course, improvements can be made, in particular within individual organisations where Governance is weak. But it can’t be improved ‘enough’ to have the sort of impact the sector needs. If it was going to happen, surely it would have already happened by now? So, if not that, then what?
There is arguably a case for very radical reform of the social housing sector. However, I don’t personally sense that the new Government has the appetite for this, and certainly not as part of a first-term programme.
The programme of ‘inspection’ by the Regulator of Social Housing is a matter of policy fact. Inspection has proven in the past to be an effective tool in improving standards, in essence providing the sort of ‘check and balance’ that the competitive market provides to the commercial sector. Whether the sector embraces the new inspection regime or not, it’s here. So, it makes sense to embrace it. If you’ve not tested through external inspection and challenged business critical areas of your service in the last 3 years – why not? What’s holding you back? We assess our systems for producing annual financial statements every year in the form of a statutory audit. Of course, the finances are important, but so is resident safety, the condition of homes, and wider housing management services. So why would well-run social landlords not engage in a programme of self-directed external inspection activity and not just wait for the regulator to tell you what’s wrong?
Many years ago, I studied the Jim Collins management text “Good to Great”, which was based on his research on what turns good organisations into truly great ones. He asserts “You absolutely cannot make a series of good decisions without first confronting the brutal facts.” Good advice I would suggest, and it starts with finding out what the ‘brutal truth’ looks like for your services.