Some MPs and councillors complain about the lack of accountability of housing associations. This is based on two notions. Firstly, that housing associations are not run by chief officers answerable to elected councillors, but by chief executives only lightly controlled by boards whose members they help select. Secondly, they believe that because most associations are now regional or national, rather than local, they fail to take account of the genuinely local concerns of their customers. By way of an example they often claim that housing associations fail to respond to requests or complaints from tenants and other residents. They often contrast the position with that of council house managers, who they say are much more responsive because they are answerable to elected councillors.
Firstly, whilst it is true that in the past housing association boards were little more than figureheads, their roles and responsibilities have now been substantially strengthened and they are required to ensure that associations are well-governed and managed, and meet the needs of their customers in ways that fulfil their usually charitable purposes.
It is quite true that Housing Associations are run by boards rather than Councillors, although many associations do have councillors involved in their boards and sub committees. At Notting Hill, for example, we have two very good councillors – one from Kensington and Chelsea, and one from Westminster – on our committees. One is Labour and the other is Conservative, but they both function as part of their board, required to put the interests of the association before those of their authority or party.
Most organisations in Britain, which are not small companies, or family
run, have a Board of management which is responsible for the proper
running of the company. These organisations rang from large PLCs, to
small charities. The “professional” board is the model most
organisations rely on, rather than an elected or “democratic” board.
While we would strongly uphold the concept of local democracy, and
would wish to be properly accountable to it, we do not think that the
only way to run social housing is through the Council.
Of course having a good Board is key, and these days most of the larger
housing associations go to great lengths to attract people with the
right skills to manage what have become large, privately funded
organisations. At Notting Hill we generally advertise vacancies, use
head hunters or network. The board members agree a Code of Conduct, not
unlike that which Councillors sign up to. They are appraised annually,
and generally have a limit on how long they can remain (in our case it
is six years). We also pay our board members a small fee –
approximately £3000 per year.
Housing associations are not however commercial organisations, despite
a number of MPs and councillors claiming they have “moved away from
their roots” in voluntarism, and are now only interested in promoting
home ownership. We have to carry out commercial activities to subsidise
our social functions and to ensure that we can continue to let out
homes at rents far below the cost of producing and managing
them. These commercial activities such as building homes for sale, or
renting homes at market rents, help create resources for community
building and affordable housing. But they are also market-driven
activities, with all the risks that that involves, and we need on our
board people who can help the officers manage that. At the same time we
need to be accountable to our customers, who are generally people with
less choice and resource that the average Briton. Consequently our
boards are not full of bankers and accountants, but also include
tenants, housing managers and people with social concerns. The best
boards will include people from both ends of this spectrum, as well as those who can balance the two tensions effectively.
Many associations have moved away from their birthplace. Notting Hill
was born in North Kensington in 1963, but today it provides homes all
over London. Other associations have a local name which they proudly
uphold. But many, especially those which own and manage homes that were
once Council housing, have now chosen more general names like
“Harvest”, “Paragon” or “Catalyst”. Growth, competition and opportunism
have driven this expansion, and there is nothing inherently wrong with
it. But as associations get larger they do need to ensure that they
keep a strong link with their local areas, stay in
touch with councillors locally, understand their issues and strategies,
otherwise they will become remote. But councillors need to understand
that they are unlikely to have as important a relationship with an
association with just a few homes in their area as they have with the
Council’s ALMO or housing department.
However it is important that associations take seriously councillor and
MP enquiries, and respond effectively and rapidly to them. Not all of
them do, and this can result in a bad press for all.
Who are housing associations really accountable to?
The theory is that we are accountable to our tenants, who often sit on
our boards and service committees. Most associations have set up a
wide range of tenant representative bodies that we listen to and
consult with as we run our service. However the reality is that we are
accountable to our main funders and commissioners – the HCA, central
government and the local authorities and the banks; and to our
regulator and inspectors – the TSA and the Audit Commission. The
detailed requirements and conditions that they lay down mean that in
reality the tenants often come third, after everyone else’s
requirements have been met.
Increasingly we are being challenged by the regulators “to put tenants
at the heart of what we do”, and to provide tenants with more choice.
However the choices that our existing tenants most want – for example
a transfer to a larger home or a different area – are often thwarted by
the requirements and conditions that we have to meet. If we are really
going to put the interests of tenants and would-be tenants first we
must be given much greater freedom to manage the homes we own in ways
that best meet their interests. This means that our performance must
be judged mainly by how well our customers judge our services, rather
than how well we meet requirements laid down by central and local
government and the regulators they appoint.