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

2. School of the Built Environment Presentation Agenda Recent trends in LA housing management performance in Scotland Comparison with recent English experience Improvement drivers in England Housing management costs

3. School of the Built Environment 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. School of the Built Environment 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. School of the Built Environment Recent trends in Scottish LA housing management performance (2) Again, on repairs the evidence suggests a reasonably positive trend

6. School of the Built Environment Scottish LA housing management performance – variation between LAs Huge variations in performance remain apparent in 2006/07

7. School of the Built Environment Setting Scottish LA performance in context Scope for further improvement in empty property management clear from comparison with English LAs

8. School of the Built Environment 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. School of the Built Environment 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. School of the Built Environment 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: a)They have established an ALMO, and b)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. School of the Built Environment Accounting for improvement (2) Performance indicatorALMO LAsNon-ALMO LAsDifference 2002/03- 2006/07 2002/032006/072002/032006/07ALMO LAs Non- ALMO LAs % rent collection97.097.498.0 +0.40.0 % rent arrears3.002.762.472.35-0.24-0.12 Avg relet interval (days)44363935-8.0-4.0 % urgent repairs on time93.097.092.496.0+4.0+3.6 Avg time to complete non-urgent repairs (days) 16.39.916.412.7-6.4-3.7

12. School of the Built Environment 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. School of the Built Environment 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. School of the Built Environment 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.