ODPM efficiency targets leave sector in dark

Councils and housing associations have been left unsure how to make £1.66bn of efficiency savings by April 2008, despite the government deciding this week where the savings must be made.

The ODPM finally announced on Monday night the breakdown of the sum that social housing providers must save between 2005 and 2008. Councils must find £867m of the total and housing associations £792m.

John Prescott’s department has not yet said exactly how social landlords will make the savings although, as expected, it has split its figures into new homes, capital works, and management and maintenance.

However, a Whitehall source has confirmed that the two working groups that are examining how the savings should be made “are making good progress but still have miles to go before being able to help the sector to hit the targets”.

The savings were revealed by Housing Today in the wake of the comprehensive spending review in July (HT 16 July, page 8) and are part of Sir Peter Gershon’s review of efficiency in the public sector.

More detail will be given in the ODPM’s efficiency technical note, to be published by 31 March next year.

The targets are believed to include assumptions for savings that could be made through councils and housing associations joining 32 procurement consortia, similar to Fusion 21 in Liverpool (HT 6 August, page 7).

The ODPM has allocated £33m to fund such consortia.

The department plans to work with the Housing Corporation to quantify the sum saved by the increasing number of homes built without grant.

The two bodies will also develop a tool to measure the value of increases or decreases in the quality of new homes.

We need to know the basis for the figures. Would it measure one of my staff spending two hours with a vulnerable tenant?

Anu Vedi, Genesis Housing Group

Responding to the publication of the figures, housing providers raised concerns over steep rises in capital works savings: from £14m for councils and registered social landlords in 2005/6 to £340m in 2007/8 (fact file).

Mark Lupton, policy adviser at the Chartered Institute of Housing, said: “They are expecting major improvements in procurement. I’m not saying there isn’t potential for that but getting them quantified like this presents a challenge to the sector.”

He added that the emphasis on self-assessment in the social housing guidelines published with the figures was welcome, but the separate local authority guidance could result in councils having to collect vast amounts of statistics.

Anu Vedi, chief executive of Genesis Housing Group, said: “We need to understand the basis on which they came up with these figures. There are some efficiency issues it is hard to measure. For example, would it measure one of my housing staff spending two hours with a vulnerable tenant and putting a smile on their face?

“The sector needs to make its case to government in how it defines efficiency and how it adds value.”

There was some confusion over whether councils should follow the note for social housing or for local authorities.

However, it is understood that they are to follow the social housing guidelines.

The sector also called for a measure of efficiency gains that includes extra services provided by housing organisations, such as community work. No such benchmark exists at present. The National Housing Federation could produce a measurement tool, which could then be approved by the government.