‘We got it wrong’ on efficiency index, admits Rouse

The Housing Corporation has bowed to sustained pressure from the sector and admitted that its controversial efficiency index is misleading.

It has changed the name of the league table to the “operating cost index” and plans to publish it alongside all 25 indicators of housing association performance later this year.

Speaking at the National Housing Federation’s annual conference in Birmingham last week, corporation chief executive Jon Rouse said: “By itself [the index] does not tell us, or you, whether an association is either efficient or effective, but it does provide a potentially important piece of the jigsaw.

“One thing I will acknowledge: we got it wrong and will now correct it … We should not have referred to this exercise as the efficiency index. I accept this criticism … and from now on this exercise will be titled an operating cost index.”

Rouse also accepted that trying to mix service quality and cost in one index was not possible – it was “like trying to mix apples and pears”.

The corporation launched the index in August with the intention of ranking housing associations’ efficiency and encouraging them to improve (HT 27 August, page 7).

But it faced a storm of protest over the methodology behind the exercise. Associations claimed it was based too much on the cost of services and not enough on their quality. This culminated last week in stinging critiques from the Council of Mortgage Lenders and the National Housing Federation (HT 24 September, page 11).

Darrell Mercer, chief executive of Acton Housing Association, which is ranked 189 out of 192, said: “ It’s now a much fairer description. But it is still important that whatever it is called we can make fair comparisons between organisations. I feel confident that we are now on the way to having the reasonable framework that will allow this.”

Rouse also called on associations to get more involved in “under-served areas” such as refugee move-on accommodation and managing empty privately owned housing.

With regard to the In Business for Neighbourhoods campaign to rebrand social housing, the sector needed to “up its game”, he added. “Out there in the neighbourhoods you are punching above your weight but in the corridors of Whitehall, Westminster and Wapping you are too often featherweight.”

Housing associations must work with the Treasury to end the “dependency culture” that has led to 45% of social housing tenants being unemployed, Treasury chief secretary Paul Boateng told the conference last Friday.

He also spoke of his concern for the future of small, specialist registered social landlords. “I think particularly of the black housing association movement. It would be an absolute tragedy if we did not find a way of making their contributions work within the new larger structures of RSLs today.”