Jan 22nd 2018, 12:27
Blog 22nd January 2018
In this week’s blog, I refer to: Impact Housing Association, the Riverside Group, Homes England, Service Charges, the National Audit Office, Philip Hammond, CIPFA, Adult Social Care, the Local Government Association, the New European, Piers Morgan, David Baddiel and Voltaire.
My article in this month’s ‘AWICS Housing News’ about Impact Housing Association and its downgrade by Homes England from the top rating for governance and viability of G1/V1 to an unacceptable rating of G3/V3 has prompted several people to contact me. These include Councillors and staff of local authorities, officers of housing associations, former Impact staff and a rather interesting telephone call from a Board member at the Riverside Group. In my article I outline the governance issues that appear to have prompted Homes England to downgrade Impact Housing Association for governance and conclude that this case raises issues regarding the accountability of housing association boards that are relevant to all housing associations.
The comments that I have received include:
“What has gone wrong with Impact?” (Councillor)
“You raise some interesting points re governance. All a bit sad really.” (Housing Association Chief Executive)
“I was very interested to read your views on the Impact Housing situation in your Housing News January 2018. Your frustration, anger and disappointment with Impact really comes across. I have followed your reports on your time with Impact and can tell that you put a lot of thought, work and faith into Impact during the time you were involved with them and can understand your current frustration… I worked for Impact between about 2009 and 2013… I hope you manage to make some headway with your enquiries and look forward to reading your further reports.” (former Impact employee)
“I think the way that smaller RSLs have been managed over the past 20 years leaves them vulnerable and needing therefore to look towards larger groups. The development of people to run them also has been lacking as they are businesses first as commercial operations and a social service second. This change of necessary culture does not appear in all cases to have been taken on board.” (Local Authority Chief Executive)
It is interesting to note that I have not received any response from Impact Housing Association or Homes England. However, it appears that the current Chief Executive of Impact Housing Association has decided to block my emails. I find this a rather strange response to a shareholding member of the Association, and former Chair, who is raising concerns about the governance of the Association!
I hope to publish the February edition of the ‘AWICS Housing News’ soon and intend to include a further article about Impact Housing Association, this time covering finance and financial management. Other articles will follow!
I am currently busy finalising the preparations for our seminar: ‘All You Want to Know about Service Charges in Social Housing’ that will be held in London on 27th February 2018. As usual, this seminar is proving popular, but there are still a few places available.
According to Homes England, Service Charges income in English housing associations fell short of service charge costs by £300million (20%) in 2016, a wider margin than was the case in 2015. This represents a significant cost that could be avoided if full recovery of service costs could be achieved as is regarded as best practice. The situation in local authorities is similar.
Our next seminars are on:
The National Audit Office has reported recently on the public finances. They found that government borrowing has increased by 61% since 2009/10 and that the size of the debt now poses a significant risk to the public finances. Of the £2.0trillon liabilities on the government’s balance sheet in 2015/16, £1.3trillion was debt from borrowing, equivalent to £47,000 per household. Since 2015/16 government debt has increased, and in the November 2017 budget, Chancellor Philip Hammond announced that large-scale government borrowing would continue. The National Audit Office also found that £222billion had been spent on debt interest since 2009/10. This does not look like good financial management to me!
Meanwhile, the Chartered Institute of Public Finance & Accountancy has published its ‘Performance Tracker’. It shows that spending on adult social care fell by almost 10% in real terms between 2009/10 and 2014/15 despite the significant increase in need caused mainly by an 18% increase in the population aged over 65. Since then it has increased, funded by the Better Care Fund and the additional £2billion allocated in the March 2017 budget, but expenditure is still 5% below 2009/10 levels in real terms. Real terms expenditure therefore fell by 28% between 2009/10 and 2014/15, and the increases since then have not kept pace with the 4% annual increase in the population aged over 65. The ‘Performance Tracker’ also found some significant regional variations with authorities with higher deprivation levels and larger elderly populations struggling more.
In my work providing the Local Government Association with financial diagnostic reports to support peer reviews, I often come across local authorities that are struggling to maintain adult social care services when faced with increasing need and reducing budgets.
The ‘Performance Tracker’ also found that from 2009/10 to 2015/16, local authority spending on neighbourhood services has reduced significantly. Expenditure on trading standards fell by 33%, libraries by 31%, food safety by 22% and waste collection by 19%.
Today I have two ‘thoughts for the week’. The first comes from David Baddiel, the contemporary comedian, who wrote in the 'New European' that:
“Piers Morgan (said) I was wrong because I was on the losing side. But that’s a category error. That’s not how arguments work. The side that’s right, the side that contains the truth, isn’t always the side that wins.”
And the second comes from Voltaire, the eighteenth century French philosopher, who said that:
“It is lamentable, that to be a good patriot one must become an enemy of the rest of mankind.”