‘We are all risk managers’: developing resilience in social housing

by Ken Gibb

The social housing sector in Scotland confronts a wide array of external and internal risks, as well as the need to respond to and work with multiple stakeholders like their tenants, government, the regulator and lenders. Providers operate risk-based management practices to help them assess and mitigate these risks. At the same time, many providers are looking to a series of resilience-building processes and strategies that will support and strengthen them in the uncertain years to come.

Alongside these pressures, there is an ever-growing requirement that social housing fits within and plays a full role in what is increasingly known as the emerging Scottish approach to public policy. This is grounded in the Christie Commission principles of partnership, prevention, service integration, co-production, asset-based and efficient service delivery solutions. The local articulation of these approaches to delivery can be found in community planning partnerships, increasingly viewed as the mechanism by which place-based holistic policies should be delivered. Housing should (but does not always) play a major role in this emerging policy landscape.

Working with colleagues in Policy Scotland, we launched today a report funded by the Wheatley Group [1]. This was an exploration of the challenges facing the Scottish social housing sector, the external risks they face and the ways in which organisations are trying to embed resilience both in terms of individuals and as organisations. The study involved an evidence review, key actor consultations and four case studies carried out during the course of the second half of 2014. This post summarises key messages and draws on the summary of the report.

What are the major risks?

  • Political uncertainty.
  • On-going austerity and, specifically, reduced housing subsidy.
  • Housing supply shortages, unmet housing need and affordability problems.
  • Long term adverse changes to private finance.
  • Welfare Reform, despite the Smith Commission’s proposed approach in Scotland.
  • The growth of private renting may create both competitive threats and business opportunities.
  • Demographic trends, for instance, ageing and increased single households will shift demand and need, will require provider response and create new opportunities.
  • Labour market trends such as in-work poverty, the irregularity of many new jobs and wider trends in poverty and inequality need to be understood by front-line and integrated service delivery providers.
  • Internally-generated risks are also important and represent the past decisions, responsibilities, governance, human and other resources available, as well as the underlying outlook of providers. These path dependencies constrain providers but they also reflect their mission and outlook. They may well also bring risks.

What are the key messages from the research?

There is no simple answer as to whether the sector should reduce risk by diversifying or by returning to the core business – It is context-specific. While no combination is necessarily better than the other, individual providers will locate where they think best and most appropriate to them – but they must to do so in a strategic and informed manner.

Providers must continue to improve and invest in customer intelligence. The research found that this had not previously been a strength of the sector. While the situation had improved, due in part to welfare and other reforms, this progress must continue. Relatedly, front-line services including support services and broader issues, such as expertise in household management and financial inclusion, are likely to become more central and less peripheral in the future.

There were varied examples of partnership working. This primarily focused on customers and particularly linked to wider issues (e.g. health and social care integration). One theme was that partnerships are not just necessary for operational service reasons – developing and delivering services through partnerships is not just desirable but a necessary strategic approach for resilient housing organisations.

Providers should embrace and seek to embed the notion of the learning organisation. There are good business reasons for doing this but we also noted the importance of drawing on new ideas like scarcity of mental capacity both among impoverished customers and hard-working staff [see earlier post on scarcity and behavioural economics]. Ensuring that appropriate holistic training is deployed will make the best use of the sense found in the research that ‘we are all risk managers’. Learning is also part and parcel of good governance.

There will be significant new business development opportunities, not least as a result of demographic change and the care sector’s relentless growth. There is scope to build on the idea of whole life housing provision and flexible care solutions directly provided and in partnership with others. This opportunity, however, also brings risks and new stakeholders as well.

We suggest that three steps should be followed-up as a result of this research. First, good practice regarding risk management and resilience need to be further consolidated. Second, where do specific providers want to be – are they matching their strategic vision to their operational capacities, resilience thinking and sufficient awareness of the risks they face? Whatever the direction they resolve to follow, it should be grounded in a full evidenced analysis and wide consultation. Finally, the sector as a whole should undoubtedly debate the strategic direction of the sector in terms of just what (or who) is social housing for in the 21st century?

Note: A full report ‘Reform, Resilience and Risk: Social Housing in Scotland’ by Kenneth Gibb, Des McNulty and Tony McLaughlin is available from both Policy Scotland at the University of Glasgow [http://policyscotland.gla.ac.uk] and from the Wheatley Group. [http://www.wheatley-group.com].