Analysing Local Authority Housing Management Performance and Costs

1. Analysing Local Authority Housing Management Performance and Costs Hal Pawson, School of the Built Environment, Heriot-Watt University

2. Presentation Agenda • Recent trends in LA housing management performance in Scotland • Comparison with recent English experience • Improvement drivers in England • Housing management costs

3. Standard of LA housing performance • SG concern at ‘variability’ of housing management performance • Only 1 LA (West Lothian) so far graded ‘A’ (excellent) on housing management • Broader context: permeating impact of regulatory inspection regime post-2002 • But first round of LA inspections due for completion only in 2008/09 • Incentive for LAs to avoid ‘D’ grade but little benefit in ‘A’ rather than ‘B’

4. Recent trends in Scottish LA housing management performance (1) • Current tenants’ rent arrears on a generally declining (improving trend) • Until 2006/07, achieved alongside reducing evictions • But evictions up rather sharply in the most recent year • Fairly positive trend in overall void rate but 2007 figure remains well above the standard 2% target • Relet intervals reducing only in past 2 years

5. Recent trends in Scottish LA housing management performance (2) • Again, on repairs the evidence suggests a reasonably positive trend

6. Scottish LA housing management performance – variation between LAs • Huge variations in performance remain apparent in 2006/07

7. Setting Scottish LA performance in context • Scope for further improvement in empty property management clear from comparison with English LAs

8. Recent trends in LA housing management performance in England • The past five years has seen fairly steady improvement in all 3 key areas of housing mgmt • Since 2001/02: • Avg time to relet properties down from 39 days to 35 days • Uncollected rent down from 3% to 2.2% • % of repairs completed on time up from 93% to 96% • Avg time taken to complete non-urgent repairs down from 18 days to 12 days • Also note rent arrears evictions cut by 20% in 2006/07

9. Consumer perspectives • Survey data indicates positive trend in consumer satisfaction • Demonstrates gains in service effectiveness and quality – as well as efficiency (see PIs) • Particularly significant given challenge of rising expectations • Valuable satisfaction trend data available for England from SEH (as here) and BVPIs • Similar data for Scotland not known to be available

10. Accounting for improvement (1) • 60 (of 354) English LAs have devolved housing management to Arms Length Management Organisations (ALMOs) • LAs qualify for extra public funding to assist with Decent Homes Standard compliance if: • They have established an ALMO, and • The ALMO’s housing management service is classed by Audit Commission as 2* with good prospects • ALMO regime means landlords incentivised to achieve high performance not just to avoid failure • It has been claimed that the ALMO regime has been a powerful driver for improved management standards

11. Accounting for improvement (2)

12. Accounting for improvement (3) • Overall gains registered on all indicators (bar one) for both ALMO and non-ALMO LAs • But in every case gains more substantial for ALMOs than others – hence, clear evidence that performance incentives are effective • Fair to question sustainability of improved performance given that: • ALMO status is supposed to be temporary • The ALMO framework (unlike that for HAs) doesn’t incorporate incentives for long-term thinking • In Scottish context ALMO option of potential interest only if Treasury agreed housing debt write-off for ALMO LAs. Now that this has been rejected (for the moment, at least) possible Scottish ALMOs may be off the agenda

13. Housing Management Costs • Firm Foundations concerns about rising unit costs – see graphic • Dynamics built into this probably include: • Growing regulatory/reporting requirements • New service obligations – e.g. management of annual gas servicing • Challenge for LAs from spreading central overheads across diminishing stock • Increasingly deprived client base • Tenant and govt demands for more customer-focused service • Substantial inter-LA variation suggests need to research underlying issues Situation described as: ‘not sustainable for tenants, landlords or the Government’

14. Conclusions • Moderately encouraging trends in Scottish LA housing management performance – some return on the £2.7M annual staff costs of CS R&I • Scope for substantial further improvement implicit in (a) highly variable performance across the sector, and (b) comparable data for English LAs • Question whether Scottish regulatory regime incentivises good performance • English LA experience shows more sustained performance improvement trend: • efficiency and effectiveness • partly (but not wholly) attributable to ALMO framework • Drivers of rising unit costs need further investigation – esp. in RSL sector free from the problem of spreading overheads across shrinking stock.