from ‘woolly jumper’ to ‘pin stripe suit’: the changing governance of housing associations

From ‘woolly jumper’ to ‘pin stripe suit’:the changing governance of

housing associations

Seminar Presentation to FEGReg

Business SchoolUniversity of Huddersfield

November 28 2008

Eric SummersDept. of Strategy & Marketing

From ‘woolly jumper’ to ‘pin stripe suit’:the changing governance of

housing associations

Seminar Presentation to FEGReg

Business SchoolUniversity of Huddersfield

November 28 2008

Eric SummersDept. of Strategy & Marketing

Private sectorPublic sector

Third sector

Boundaries between the Third, Public and Private Sectors (summary amended from original by Hudson (2002))

Third Sector Organisations, includes:

Charities

Voluntary Organisations

Public Sector Organisations, includes:

Local Authorities

Central Government

Private Sector Organisations, includes:

Companies

Partnerships

Periphery of Private & Third Sector, includes:

Co-operatives

Provident Associations

Social Enterprise

Periphery of Public & Third Sector, includes:

Education Colleges

Housing Associations

Quangos

The sector

Around 2m housing association homes

Compared to 2.1m Council homes = 1.3m directly managed + 800,000 managed through Council owned Arms Length Management Organisations

But … 1165 small housing associations with less than 250 units and another 60 very large associations or group structures with more than 10,000 homes (Cave Report 2007)

Name of Housing

Association

Rental properties

Annual Turnover

Governance and other characteristics

Parish Houses Charity Housing Association

None c.£18,000 (2005-06)

Registered Charity and HC Registered

Askew Housing Trust

< 10 c.£62,000(2006-07)

Registered Charity Originally formed under Trust Deed in 1925

Douglas Haig Memorial Homes

1,300 £5.6m(2006-07)

Registered Charity and HC RegisteredFormed in 1929

Peabody Trust 18,500 £133m(2006-07)

Registered Charity and HC RegisteredFormed in 1862

Places for People Homes Limited

43,400 £338m(2006-07)

HC RegisteredFounding organisation North British HA formed in 1965

Now operates in 170 LA’s

Trans-Pennine Housing Ltd

12,580 (Calderdale +

Sheffield) plus 3,700

(Rossendale)

Data not available

HC RegisteredFormed through stock transfer from Calderdale MBC

to form Pennine Housing 2000 then stock transfer from Rossendale DC to form Green Vale Homes. Also estate transfer from Sheffield MDC into Group.

Governance impetus

Some key influences1974 Housing Act – focus on rehabilitation;

concern about municipal solutions; renewed ‘voluntary’ housing sector

1988 Housing Act – Private finance and HA’s move ‘centre stage’

1996 Nolan Committee – ‘local public spending bodies’ – changing local governance

Cadbury 1992 – duties of boardsGreenbury 1995 – directors remunerationHampel 1996 – implementation of corporate governanceCombined code 1998 – overall structureTurnbull 1999 – internal controlHiggs 2003 – role & effectiveness of non-execsSmith 2003 – audit committeesHousing Corporation 2004 – demonstrating controlFRC 2005 – internal control & combined codeHousing Corporation 2004 – improving the effectiveness of

audit committeesOPM/CIPFA 2005 – governance standard for public

servicesEtc

Report after report …..

Voluntary sector exit stage left …?

Period from 1990 – 1998:

300 newly registered HA’s (registered with Housing Corporation) BUT

60 of these newly established on transfer from Council ownership

Remainder mainly registering small groups already in existence but very small scale (almhouses, Abbeyfield societies)

Little other newly formed enterprises

Terra Nova

(Company limited by guarantee)

Company No. 5096482

Cube Great Places

(Company limited by

shares)

Space New Living Ltd

HC Reg No. L2156

(Charitable Industrial & Provident Society) I&P No. 21767R

MMHA

HC Reg No. L1230 (Charitable Industrial &

Provident Society) I&P No. 19564R

Plumlife Homes Ltd (formerly CMHA)

HC Reg No. SL3224 (Non-Charitable Industrial &


Ashiana HA

HC Reg No. LH3913 (Registered Charity

Company limited by shares) Charity No. 702905

Company No. 2327735

Great Places Housing Group

HC Reg No. L4465

(Non-Charitable Industrial & Provident Society) I&P No. 30045R

Terra Nova


Company No. 5096482

Cube Great Places

(Company limited by

shares)


HC Reg No. L2156


MMHA






Ashiana HA



Company No. 2327735


HC Reg No. L4465


Democratic governance

Stewardship governance

Terra Nova


Company No. 5096482

Cube Great Places

(Company limited by

shares)


HC Reg No. L2156


MMHA






Ashiana HA



Company No. 2327735


HC Reg No. L4465


Formed from earlier merger of two community based agencies in Rochdale & Blackburn – joined MMHA to form new Group in 2005

Terra Nova


Company No. 5096482

Cube Great Places

(Company limited by

shares)


HC Reg No. L2156


MMHA






Ashiana HA



Company No. 2327735


HC Reg No. L4465


‘Recreated’ from Salford Community HA, a traditional inner city ‘professional’ led HA – joined group in 2006

Terra Nova


Company No. 5096482

Cube Great Places

(Company limited by

shares)


HC Reg No. L2156


MMHA






Ashiana HA



Company No. 2327735


HC Reg No. L4465


Originally a church based HA (Manchester Methodists) which grew from early 1990’s from incorporation (takeover) of SELHAL and 1st Peterloo and Knutsford estate transfer

Terra Nova


Company No. 5096482

Cube Great Places

(Company limited by

shares)


HC Reg No. L2156


MMHA






Ashiana HA



Company No. 2327735


HC Reg No. L4465


Formed to deliver low cost home ownership initiatives and transfers surpluses to main group

Terra Nova


Company No. 5096482

Cube Great Places

(Company limited by

shares)


HC Reg No. L2156


MMHA






Ashiana HA



Company No. 2327735


HC Reg No. L4465


Specialist subsidiaries dealing with market rent initiatives (Cube) and as a holding company for the main office development (Terra Nova)

Terra Nova


Company No. 5096482

Cube Great Places

(Company limited by

shares)


HC Reg No. L2156


MMHA






Ashiana HA



Company No. 2327735


HC Reg No. L4465


Not shown are other new areas of business delivered through non-registered subsidiaries including New Opportunities – a social enterprise ‘facilitator’ – and Parkway HA which manages 1,500 homes transferred from Sheffield council

Now:

• 600 staff

• 14500 homes

• £100m development programme

• operates in 31 different LA areas

• just arranged a £315m loan facility

• recently incorporated another small HA (Windmill = 600 homes) into the Group

Their market analysis:

• HA’s can go bust (Ujima HA)

• HA’s only one part of social housing

• Homes for sale almost halted

• Funding difficult

• Time bomb of city centre apartments

• Waiting lists getting longer

• Shared ownership difficult

• Regulatory regime changing

• Surrounded by uncertainty

Governance review (proposals):

• ‘Professionalised’ Group Board

• 14 Non-Exec + 1 Non-Exec (C/Ex)

• Paid board members

• Formal terms & conditions, appraisal etc

Great Places Housing

Group Board

Plumlife Homes Ltd

Tenant Assembly

Yorkshire Coast Homes Board

15 Non-Execs

• created in 2003 as stock transfer

• 65 staff

• 4350 homes

• operates in 1 LA

• £15m turnover

• negligible development programme

5 Tenant Board

Members

5 Independent

Board Members

5 LA Board

Members

Democratic governance?

Advocacy governance?

Stewardship governance?

Some views

‘It is precisely because of their ambiguous status that

successive governments have been able to adapt the movement to satisfy their

own goals’ Back & Hamnett (1985). the housing association

sector of today ‘is the product of accretion of layers of organizational

responses to opportunities existing in different eras’

Mullins (2004)

Some views

‘in the past it was possible for groups of concerned people to take the initiative to form new

associations, to secure registration with the Housing

Corporation and to build up their associations into substantial

providers of housing services. Now, however, this is virtually

impossible’Malpass (2001)

Some views

‘One of the phenomena of recent times is the manner in which

formerly independent charities have become agents of the state

(e.g. housing associations) or lobbyists for more state

resources’ (Whelan, 1996, as quoted in King, 1998) with King

then going on to refer to what he calls a process of ‘nationalisation

of charity’

Private sectorPublic sector

Third sector

1961 cost-rent housing societies & co-ownership

5% philanthropy & public utility companies c.1830

onwards

Almhouses c. 1235 onwards

Stock transfer HA’s c. 1998 onwards

Many post-1974 HA’s?

Some post-1974 HA’s?

1935/1936 regional policy HA’s

21st Century HA regionalised

conglomorates …?

from ‘woolly jumper’ to ‘pin stripe suit’: the changing governance of housing associations

Documents

small housing associations

housing corporation

registered charity

lastranspennine housing

council homes

stock transfer

public servicesetcreport

voluntary sector exit