From woolly jumper to pin stripe suit the

From ‘woolly jumper’ to ‘pin stripe suit’: the changing governance of housing associations Seminar Presentation to FEGReg Business School University of Huddersfield November 28 2008 Eric Summers Dept. of Strategy & Marketing

Periphery of Public & Third Sector, includes: Third sector Periphery of Private & Third Sector, includes: Education Colleges Third Sector Organisations, includes: Co-operatives Housing Associations Quangos Charities Provident Associations Social Enterprise Voluntary Organisations Public Sector Organisations, includes: Private Sector Organisations, includes: Local Authorities Companies Central Government Partnerships Public sector Private sector Boundaries between the Third, Public and Private Sectors (summary amended from original by Hudson (2002))

The sector Around 2 m housing association homes Compared to 2. 1 m Council homes = 1. 3 m 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. 6 m (2006 -07) Registered Charity and HC Registered Formed in 1929 Peabody Trust 18, 500 £ 133 m (2006 -07) Registered Charity and HC Registered Formed in 1862 Places for People Homes Limited 43, 400 £ 338 m (2006 -07) HC Registered Founding organisation North British HA formed in 1965 Now operates in 170 LA’s 12, 580 (Calderdale + Sheffield) plus 3, 700 (Rossendale) Data not available HC Registered Formed 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. Trans-Pennine Housing Ltd

Governance impetus Some key influences 1974 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

Report after report …. . Cadbury 1992 – duties of boards Greenbury 1995 – directors remuneration Hampel 1996 – implementation of corporate governance Combined code 1998 – overall structure Turnbull 1999 – internal control Higgs 2003 – role & effectiveness of non-execs Smith 2003 – audit committees Housing Corporation 2004 – demonstrating control FRC 2005 – internal control & combined code Housing Corporation 2004 – improving the effectiveness of audit committees OPM/CIPFA 2005 – governance standard for public services Etc

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

Stewardship governance Democratic governance

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

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

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

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

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

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 • £ 100 m development programme • operates in 31 different LA areas • just arranged a £ 315 m 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 Tenant Assembly Plumlife Homes Ltd

• created in 2003 as stock transfer • 65 staff • 4350 homes Stewardship governance? • operates in 1 LA Yorkshire Coast Homes Board • £ 15 m turnover • negligible development programme 15 Non-Execs 5 Independent Board Members 5 LA Board Members 5 Tenant Board Members Democratic governance? Advocacy 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’

Third sector Almhouses c. 1235 onwards Some post-1974 HA’s? Many post-1974 HA’s? 1935/1936 regional policy HA’s Stock transfer HA’s c. 1998 onwards Public sector 21 st Century HA regionalised conglomorates …? 5% philanthropy & public utility companies c. 1830 onwards 1961 cost-rent housing societies & co-ownership Private sector