Guy Daly and Kevin Gulliver Value for Whose Money? Housing Perspectives on VFM, Social Value and Social Accounting Guy Daly and Kevin Gulliver HOUSING STUDIES ASSOCIATION CONFERENCE APRIL 2014

Value for Whose Money? Introduction Aims of the paper Evolution of value for money Conceptualising social value ‘Measuring Up’ VFM and social value A Housing Association case study Conclusion

Introduction Austere times: But value for money social landlords are increasingly having to provide improved value for money as part of the government's public debt reduction strategy But value for money amounts to much more than cutting costs and/or services ‘Big society’ and ‘localism’: social landlords are aiming to increase and measure the social value of their activities

Aims of the paper The paper aims to synthesise key elements of the value for money (VFM) and social value agenda to gauge how social landlords are delivering and accounting for social value generation The paper presents findings from a recent social accounting and audit exercise with a major housing association group in the Midlands. The paper finally draws some initial conclusions about how and for whom social landlords are creating social value with a retrenching local state and public sector with a growth in needs within the communities that social housing providers tend to operate

Context Value for money (VFM) Austere times and reductions in expenditure Social housing Benefits/welfare reform Local government

Evolution of value for money (1) The three Es economy, efficiency, effectiveness CCT and, later, Best Value Quality marks Citizen’s charters John Major’s apostrophe Stock options appraisals in social housing

Evolution of value for money (2) Gershon review 2004 produce and/or improve efficiency in social housing £325 million effectiveness of procurement reduce back office and transactional costs. reductions in capital works. creation of group structures and mergers counter productive narrow focus insufficient attention paid to ‘public values, equity and social good’ stifling of innovation and creativity Mullins (2010)

Evolution of value for money (3) Housing Corporation’s Operating Costs Initiative 2006 Housing associations’ league table of economic performance Again, mergers and reductions in management costs Bigger groups, less community focused?

Evolution of value for money (4) Coalition Government Austere times Reduce costs Cuts in welfare Cuts in capital programmes Subsidising demand rather than supply Social housing VFM standard Board responsibility

Conceptualising Social Value (1) “(Our) approach is to maximise VFM in the context of the sector’s social purpose and operating environment…. Housing associations are social businesses that exist to produce social value in a broad sense…But whilst associations undoubtedly provide social value, it does not follow that they provide VFM. Like any system of production, the delivery of social value is not always as economical, efficient and effective as it might be.” Nat Fed and Housemark: Social Hearts and Business Heads Smedley (2012)

Conceptualising Social Value (2) Competing interpretations of value Some value/values easier to measure than others Various approaches SAA SROI CSR Promotion of SROI (as opposed to SAA) potentially one dimensional

‘Measuring Up’ VFM and social value - A Housing Association case study Human City Institute analysis April 2010 to March 2012 Medium sized HA 3,500 properties Social enterprise £30M turn-over

Case Study (2) Hybrid Methodology Gulliver and Prentice (2013) Environmental Scanning Social Auditing and Accounting Social Return on Investment and Social Value Community Impact Analysis Value for Money Customer and Stakeholder Involvement Stakeholder Oversight and Co-Production Gulliver and Prentice (2013) Gulliver (2014)

Measuring UP – 5 Steps What are the housing association’s mission, corporate objectives and activities – its ‘Governance Statement’? What is the context within which the housing association tries to realise its mission, meet its objectives and deliver its services? What resources are brought to bear and what are the housing association’s totality of activities? How can the results of the housing association’s work be evaluated in terms of social value created and direct and indirect impact on communities and local economies? How can the outcomes achieved by the housing association be quantified, summarised and presented?

Measuring Up – Case Study Findings and outcomes Social audit balance sheet Aligned to and development of updated values and mission of the HA Social investment strategy Aligned to tenant and community priorities A return to (and on!) social value(s) £ stretch Local employment Local social enterprises’ support Return of investment back into the HA Not cost cutting but social value creation

Conclusion – Value for whose money? Who defines value? How should value be measured? What is the purpose of VFM Cost and expenditure reduction? Or social value to/for tenants and communities? Final thought If VFM is about reducing costs/expenditure Who benefits?