Does size matter?

At the Social Housing Finance conference this week, there's lots of chatter about our increasingly tough operating environment driving a trend in merger activities, with Homes and Communities Agency's Chair, Julian Ashby, projecting that 50% of all HA stock could be owned by just 12 landlords in a few years time.

Whilst the Governance, Viablity and VFM standard requires Boards to undertake a "rigorous appraisal of all potential options for improving VFM, including the potential benefits in alternative delivery models" let's not forget that M&A is  only one of a number of delivery options.  

Although mergers may well be the right route for some, we're in danger of becoming a one trick pony!   Despite the incredibly flux and uncertainty in our operating environment, we [the housing sector] are still applying the same old thinking, at a time when we need very different results. 

We need to reimagine service delivery models across traditional organisational boundaries - considering all the strategic options in our armour - strategic alliances, partnerships, joint ventures, cost sharing groups, co-located or co-produced services with others working in the same neighbourhoods - the place where our major stakeholder - our tenants and leaseholders - call home.  Let's not lose sight of their voices - and their wellbeing - in all this.

Tenants want local services, delivered by local people which supports the local economy.  They want control of service quality and cost, and have a real voice in how services are delivered.  

I question whether continued M&A activities will leave Boards and residents feeling uncomfortable being 'swallowed up' as part of successive groupings, losing their 'local' feel and focus?  I fear M&A will create groups too large to rescue in the event of collapse - and that social housing will simply be sold off privately if HAs fold.

All this chat about M&A brought to mind this Chartered Institute of Housing paper published in 2012 - Does size matter? Analysing sector performance it found absolutely no correlation between cost, performance or size of landord, and more importantly in our current M&A frenzy, evidenced that scale alone did not automatically deliver efficiency, nor guarantee improvement.

ICYMI it's really worth a read: 
http://www.cih.org/resources/PDF/Policy%20free%20download%20pdfs/Does%20size%20matter.pdf


Sharon Collins
Director, Shared Ventures Ltd
07740 482976
sharon.collins@sharedventures.co.uk