The Sector Scorecard is an initiative to benchmark housing associations’ performance and check they are providing value for money. It demonstrates the sector’s accountability to its tenants and stakeholders, and includes measurements ranging from financial gearing ratios to customer satisfaction.
The initiative started with a well-received pilot exercise and analysis report in 2017, which proved the worth of comparing measures at a high level – for housing associations of all sizes, across the UK. Some of these measures were subsequently adopted by the Regulator of Social Housing through its new Value for Money Standard. In 2018, the Scorecard has harmonised metric definitions with those used by the Regulator to ensure consistency, while retaining the additional performance, impact and satisfaction measures that are essential to telling the sector’s story in a holistic and balanced way.
The 2018 Scorecard exercise has had broad support across the sector with increased participation across the UK and backing from key sector representatives as well as support from the National Housing Federation.
Most housing association business is centred on supplying accommodation to a regulated market. While there is a range of rent levels, the rent charged and increases (or decreases) is determined by regulation. Allocation of properties to tenants and owners is regulated in many circumstances and based on the applicant’s level of housing need, which is also set out in regulation. Providing accommodation in this market means that housing associations face a unique set of issues, stemming from their position as socially-minded independent enterprises.
Since the Sector Scorecard pilot in 2017, the English Regulator of Social Housing has introduced a new Value for Money Standard and set of standardised metrics drawing heavily on the work of the Sector Scorecard. The Government’s Social Housing Green Paper has placed renewed focus on the importance of transparency and accountability in the social housing sector, and consultations are underway in England and Scotland on the wider regulatory environment for social housing.
The continuing aftermath of the tragedy at Grenfell Tower has seen a vital focus on the quality and safety of existing stock. The Government is increasingly looking to housing associations to play a significant and unique role in building new homes and communities to provide the new houses the country needs.
This context demonstrates the importance of the Sector Scorecard. It shows the sector’s commitment to transparency and accountability across a wide range of financial and operational metrics, using comparative information to support delivery.
Despite a challenging external environment and pressure on costs, housing associations’ financial and operational performance remains robust. The sector is responding to the call from the Government to invest in building new homes, delivering one quarter of all the houses built in England last year. They are committed to being responsible landlords and protecting the safety of residents, which has led to greater investment in fire safety measures and other risk mitigation techniques.
It is vital that the sector continues to measure what is important to boards, executive teams and tenants, as well as the Regulator. The fact that the Sector Scorecard is owned and led by the sector allows us to do this.
Housing associations are financially robust and efficient organisations, with margins of over 20% for three out of four organisations, with a median result of 27.89%. This has fallen slightly since the 2017 pilot, which could be a result of the ongoing rent reduction and greater pressures on costs.
Sector Scorecard participants completed 44,642 new dwellings in 2017/18. In England, this accounts for one in four completions. Non-social development is concentrated in London and the South of England.
Between eight and nine tenants out of ten are satisfied with the service provided by their housing association landlord. Sector Scorecard participants are reinvesting the equivalent of 5.8% of their assets’ value in new and existing homes. And on average, participating landlords spent £58 per property on community investment – with Scottish landlords recording the highest rates.
Effective asset management
Housing associations continue to be prudent asset managers. While the rent cut in England has affected year-on year performance, the overall picture is one of realistic maintenance programmes producing a reasonable return on assets.
Rent collection levels have held up with rises across the sector. Cost per unit figures have risen at above inflation rates since the 2017 pilot. While there has been a slight change in the definition between years, it is also likely that landlords are needing to put more resources into operational services to deal with external factors such as welfare reform and fire prevention.
No organisation or group of organisations consistently achieved upper quartile performance in all areas of the Scorecard, illustrating the diversity of the measures and of participants. No organisation achieved more than seven results in the upper quartile. Typically, an organisation had 2-3 measures in the top quartile.
Following the success of the 2017 pilot exercise, the Sector Scorecard Advisory Group continued using Acuity and HouseMark to collate Sector Scorecard data and provide reporting facilities. Acuity collects Sector Scorecard data from smaller associations managing up to around 1,000 properties, mainly in England. HouseMark collects data from larger providers managing more than 1,000 properties as well as associations based in Scotland, Wales and Northern Ireland.
The data for this report was extracted in October 2018. In total, 329 housing associations 2 took part in the exercise, which is an increase of 14 organisations from the pilot exercise. Participants are based across the UK, from the Channel Islands to the North of Scotland and from East Anglia to Northern Ireland. Together, these organisations manage almost 2.3 million properties, around 80% of UK housing association stock.
Download the Sector Scorecard analysis report 2018