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Social landlords – if you want to build more units, you need to stop talking about units…

Senior Transformation Consultant and Social Housing sector specialist Tom Jarman, on focusing on outcomes over the long term to answer the challenges in housing.

Back in late 2018, something seemed to be afoot in housing; the Social Housing Green Paper, Theresa May’s attendance and speech at the NHF Summit in September and subsequent announcements covering borrowing caps and £2bn additional funding seemed to mark a step change. Yes, home-ownership still seems to be at the top of the hierarchy, and there remains a gap between the vision for social housing at one end of the spectrum and social housing as an ambulance service at the other. But I have worked in the social housing space since 2005, and I think it’s fair to say that the political atmosphere has blown hot and cold in that time (sub-zero indeed on occasion) and this feels different.

I think there is now an opportunity to establish a different and much more positive narrative, namely one focussed on outcome, quality and place, and far less driven by units. And the narrative needs to change because focussing on units hasn’t produced housing in the quantity we need, of the quality we need, and located in the viable communities we want.

So my argument is this; ironically, if you want numbers of units you need to stop talking units. In reality there have been very few years since the end of the Second World War where the numbers of new homes have met demand. And although recent figures are good, social housing providers are bumping along the top of the capacity that business as usual can deliver.

Volume housebuilders want to expand production, but in terms of numbers this is adding 1000s, when we need tens and tens of thousands. And very few people would argue that the answer lies in training thousands of new bricklayers. The delivery gap isn’t a challenge of better tinkering, but asks real questions that require genuine, transformative thinking, not business as usual slightly better.

But so what? As social landlords, why should you be interested? What has this got to do with your core mission?

The answer is that genuine, transformational thinking will be driven by genuine, transformational clients. And as a sector that consistently commissions between 20-25% of all newbuild housing, year after year, you are a very significant client and potential carrier for change. This change could deliver good quality, high performing, climate resilient, risk managed, operationally cost-effective homes, in places where people want to live and communities can thrive. It means delivering skills, employment, thermal comfort at low cost, financial inclusion and homes that support health.

The key to opening up this space isn’t units, but focussing on outcome over the long term. This enables industry to invest in innovation, quality and performance because they have confidence there is client pull. The current dominant practice, lowest capital cost tendering to minimum regulatory standards, shuts this space down very effectively.

At the end of the day there are commercial organisations out there that are very skilled at delivering housing units at lowest cost, but this isn’t a strength in social housing. As long term asset managers you can’t completely focus on driving down initial construction cost – you need to build properties that deliver value over the long term. A focus on cost and units very effectively undermines the opportunity to deliver on your values at a stage when it is (ironically) most cost-effective to do so.

Recent headlines highlighted a 173% rise in house prices against a 19% rise in income for 25-34 year olds. We spend billions every year on new housing, and there is an open door to push against with the right message. Let’s change the narrative away from units and cost, and start talking about what we can transform and deliver. The units will come. But so will the value – good quality housing in sustainable communities, delivering multiple holistic outcomes. This is the opportunity to build on strengths and be clear about where social housing providers are genuinely a partner in answering the challenge of housing need and quality.

I know as a sector you’re measured by cost and units, and that this establishes a culture and set of behaviours, and I know that changing this is also dependent on the key influencer, namely Homes England, both measuring differently and engaging in different behaviour itself. But as social landlords I would encourage every opportunity to shift your focus to outcomes over the long-term, as that will deliver units – and so much more.

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23 October 2019 , Durham Office

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