Lenders and sector launch savage attack on efficiency index

The Council of Mortgage Lenders and the National Housing Federation said the index has serious flaws and needs to be rethought.

Both organisations said the index does not take account of the differences in quality of homes and services provided by different associations.

NHF chief executive Jim Coulter said: “The indicator should not proceed in its current form. It does not do what it says on the tin. It should be renamed to make it clear it’s a cost indicator only.”

The NHF offered to work with the Housing Corporation to develop a new tool measuring both cost and effectiveness of services.

The CML added that the league table had not included the types of stock, whether the association had large amounts of supported housing, or the state of repair of properties.

Andrew Heywood, senior policy adviser at the CML said: “They risk discrediting the idea by not having taken the time to collect the proper data.”

He added that risk and efficiency seemed to be used interchangeably. He said: “From a lender perspective, risk doesn’t necessarily follow efficiency. You can be efficient but still broke.”

The criticism came in the same week that the corporation published a “ready reckoner” showing how the table had been calculated on its website. A corporation spokesman said: “We are taking all suggestions seriously. We will be seeking to incorporate the most useful ones.”