Industry news


Sector scorecard pilot reveals size is not important


Benefit cuts leave the poor vulnerable to rent rises


Households on low incomes are being left particularly exposed to rent increases as housing costs eat up a growing proportion of their money, a thinktank has said. Analysis by the Institute for Fiscal Studies (IFS)


found that “substantial” cuts to housing benefit which now total £3bn a year has led to rental payments using up an average of 28 per cent of the non-housing benefit income of low-income private renters – up from 21 per cent in the mid-1990s. The IFS said that across Britain the proportion of


people living in private rented accommodation had more than doubled in recent decades, from eight per cent in the mid-1990s to 19 per cent in the mid-2010s, while among 25- to 34-year-olds the proportion had trebled from 12 to 37 per cent. The benefit cuts allied with rent increases have hit tenants in London the hardest. It said that over the same period, average private


sector scorecard, which has completed a pilot exercise using a new set of metrics. More than 300 landlords took part in the


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pilot exercise, which is being eagerly followed by politicians and officials at the Homes & Communities Agency and the Department for Communities and Local Government. If they were hoping to see strong links between efficiency and anything else, then they are likely to have been disappointed. The participants manage around 2.4 million


homes, accounting for more than 80 per cent of the HA sector. They also included organisations of all shapes and sizes, from the very small to the largest. But the pilot found no strong correlation between landlord size and their efficiency, perhaps supporting the case for continuing diversity across the sector. The scorecard exercise uses 15 metrics


including such factors as occupancy rates, operating margins and the number of homes developed. These were agreed before the Grenfell Tower fire which has caused a rethink about the purpose and direction of social housing, so it is possible the metrics will be refined to include more community based and social value measures. At the same time, the HCA has launched a


consultation exercise on changes to how it expects value for money to be measured, used and reported on from April 2018. The deadline for responding to the consultation is 20 December and it will be interesting to see how the vfm debate is influenced by the mixed results from the scorecard pilot and questions


inks between housing association size and their efficiency do not exist according to results from the new


over future direction. The HCA was clearly expecting all social landlords to use the 15 common metrics, plus their own in on-going monitoring work, but the results from the pilot may require a further rethink.


VARIETY Mark Henderson, chief executive of Home Group, who has led on the development of the sector scorecard, said the first tranche of results from the pilot had provided “mixed results”. “Nobody performs above average on all


indicators and nobody is below average on all indicators, and nobody is bang on in all indicators. That kind of spread reflects the nature of the activities of our organisations because we are different. It certainly hasn’t shown that it’s skewed between any particular type or size of organisation.” He added: “What it does show is that


nobody’s perfect and that we always have room for improvement. As we move the bar up we must push harder in our own organisations.” Generally there was a high satisfaction rate


among tenants, with more than eight out of 10 pleased with the service their landlord provides. Occupancy rates for homes were very high at 99.5 per cent, while spending on routine repairs was less than planned works and HAs of all sizes are building homes. Mr Henderson said: “Both big and small


associations are developing new homes at ever-increasing rates and are pushing the boundaries in terms of their ability to build out.”


rents had risen by 33 per cent in real terms. The research, funded by the Joseph Rowntree Foundation, found that tenants on lower incomes tend to spend greater fractions of their income on rent, even after accounting for the support they received through housing benefit. Their report called ‘The cost of housing for low-income renters’ is available on the IFS website. Agnes Norris Keiller, a Research Economist at IFS


and an author of the report, said: “Wider problems in the housing market are pushing up housing costs and increasing the size of the rented sector. The current approach effectively places most of the risk of further rises in costs onto low-income tenants, and little on the housing benefit bill. While containing the cost to taxpayers, it leaves housing benefit vulnerable to becoming increasingly irrelevant with respect to its purpose – maintaining the affordability of adequate housing for those on low incomes.” The lowest-income fifth spend an average of 35 per


cent of their non-housing benefit income to pay for the part of rent not covered by housing benefit, compared with 19 per cent for the highest-income fifth. The IFS said about 1.9 million privately renting


households containing 4.8 million people were entitled to less housing benefit – an average of £24 per household a week – than they would have been without cuts introduced since 2011. It said changes had also cut the entitlements of 600,000 social-renting households containing 1.3 million people by an average of £19 per household per week. Housing benefit entitlements were forecast to fall further behind rents in the coming years, the IFS said. These cuts are estimated to impact on another 400,000 people, split evenly across the private and social rented sectors. While the main focus is on the impact on families, the report highlights that working age households without children are also paying very large parts of their income in rent.


14 | HMM November 2017 | www.housingmmonline.co.uk


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