Latest Public Sector News

01.04.13

The best advice

Source: Public Sector Executive March/April 2013

A growing number of councils seeking to get the best evidence to inform their decision-making have turned to independent commissions. Paul Hackett, director of The Smith Institute think tank, has been involved in a number of them, including a particularly in-depth one – Southwark Council’s housing commission. He spoke to PSE.

Independent commissions have proved a good way for local authorities to get a combination of detailed analysis and citizen feedback on major strategic issues.

Some councils, including Tower Hamlets and Sheffield, have had ‘fairness commissions’ on issues of equality and social challenges, while Southwark decided to ask an independent commission to investigate the future of housing in the borough.

The council – the largest social landlord in London – has just under 40,000 council homes and 16,700 leasehold properties, much of it in dire need of repair.

They met and worked throughout 2012 until the report’s publication in October.

Engagement plus expertise

Paul Hackett, director of The Smith Institute and a former government housing advisor, led the secretariat to the Southwark commission, and has given evidence to a number of others.

He told PSE: “They’re quite interesting exercises in public engagement: they bring direct policy engagement in a way that local authorities have often found quite difficult. They’re a way to get soundings from local residents at the same time as getting input from experts: it’s all about getting that combination of detailed analysis and evaluation, and feedback about concerns.

“Initially, some commissions have started as in-house exercises, but I think Southwark felt – and others have been similar in their thinking – that doing it in-house isn’t quite the same thing as sending in a team of experts, consultants and people with long experience of the sector into an area to talk to residents, talk to developers and come up with recommendations.

“The advantage of a commission is the breadth. We went to Peckham and did workshops – which was a very interesting exercise, especially when we did them with young people and kids from towerblocks, asking what did they expect, and what they thought. The next day, we were sitting with Mears (Southwark’s housing repairs contractor), talking through the details, then the next day we were talking to Boris’s team about their plans. You can’t necessarily do that from inside the council, as they’re just not going to have the independence and impartiality.”

Speaking truth to power

Housing is an area that needs particularly careful thinking-through, since under the HRA councils need to have 30-year strategies and asset management in place, and many councils are having to make tough decisions since it became selffinancing instead of a grant regime.

Hackett said: “To do that, they need to canvas opinion, to gather intelligence – so we’re providing, if you like, the bedrock for that.”

Simply bringing in a team of management consultants, Hackett said “doesn’t give you that arm’s-length, independent thinking”.

“Obviously there’s a payment for the secretariat to provide the services, but the commissioners were acting independently. We’re comfortable to tell the council, in a nice way, that they need to improve.

“Quite rightly, what decision-makers at local authorities and other organisations need at board level is to feel they’re making their decisions on the best available evidence and advice. That’s a sensible thing to do. They like to look at scenarios about where they’re going, and test things out. Getting a commission together is a cost-effective way of doing that.”

Accepting the evidence

People like to know their opinion matters and that they are genuinely being consulted – but there have been far too many examples across public sector organisations of consultations being run when, to all intents and purposes, a decision has already been made.

We asked Hackett whether he felt that was ever an issue with the commissions he knew about, or whether he and recommendations would be cherry-picked to suit pre-made decisions.

He said: “Councils want an evidence-based decision making process: they need a longterm strategy. They can’t deny the evidence, but the decisions they make on the back of that evidence, I feel are for them.

“I feel very strongly about this. To take Southwark, for instance, we made it absolutely clear – not that they didn’t already know it – that Southwark’s got a lot of low-income households. It’s going to be very difficult to provide half-decent housing for them. There’s lots more coming down the track, indigenous growth, lots of very poor people in council housing on average incomes of around £9,000 a year. House prices are nine times average incomes – they’re not going anywhere.

“There’s nowhere to go if people move out. 

“The question for the council is, how many are you going to house, and what criteria are you going to use to do it? That’s not telling them they have to house x number or y number: we gave them options.

“They said, ‘we can’t fantasise’. Many elected members might well like to say, ‘well, we’ll house everyone’: but they can’t. Those harsh realities will lead to them having to make some tough, critical decisions. Sometimes those decisions are quite hard to make without somebody saying ‘look, here’s the evidence’, because they can always say they’d love to house everyone, but look at the evidence from the commission. It makes it really clear that we can’t. That element’s important.”

Next steps

The options the Southwark commission came up with – which, in very broad terms, amounted to an investment scenario where the borough kept around 39,000 homes by 2045, one where it kept 30,000 homes, or one where it kept only 20,000 homes (see panels) – were all within the bounds of financial and political feasibility (although senior Labour figures have since all but ruled out option 3, saying “it would go against all our beliefs” to reduce the stock by 20,000 homes).

The commission stuck to its terms of reference, in that sense, and did not consider, for example, a complete stock transfer or similar – particularly since such an option has been repeatedly dismissed by councillors in the past.

Hackett told us: “If Southwark has said ‘do some blue-sky thinking as well’, we’d have done so. But it doesn’t get you very far to give options that are outside of financial and political reality. We’re trying to help them make a decision about what they’re going to do with their scarce resources for the future, and we hope an exercise like that will allow them to mull over it.

“It’s professionally done – it’s readable for a wide audience, not just for the council professionals. What’s interesting is how they’re using it. They’re going to have more engagement with the stakeholders, which makes an awful lot of sense, as they want a very broad consensus about what is possible.

“They can say that a year was spent looking at the facts in great detail, and that they think their decision is the best decision to make, on this basis. That makes it a useful exercise.”

The final report – which, as many have noted, is surprisingly readable even for nonprofessionals – reflects the amount of time spent on gathering evidence and weighing the facts. It is 85 pages and 55,000 words long, with too much detail to possibly summarise here. But the council is still consulting further on the options and the future before it makes a final decision – the time for which, according to housing scrutiny committee chair Cllr Gavin Edwards, is “getting close”.

The decision facing Southwark

OPTION 1

“The council could manage a slow but steady decline in its stock to around 30,000 homes. This would release extra funds to improve the retained stock and enable major restructuring of estates but do nothing to address the shortage of affordable low-rent housing. Over time the council would gain a relatively large financial surplus from its rents, which it could reinvest.”

OPTION 2

“Maintaining the stock at around the current level of 39,000 homes over 30 years would necessitate a substantial and sustained refurbishment and new-build programme. This more ambitious scenario would help ease the borough’s housing problems, but it requires the council to undertake a higher level of borrowing against the value of its larger stock to cover the funding gap. It also requires a step change in the quality of strategic and project management.”

OPTION 3

“A carefully managed reduction to 20,000 homes should cut management and maintenance costs and release more resources for improving the existing stock. Fewer council homes would mean more pressure on other social and private housing providers, as well as probably many more leaseholders as a result of tenants exercising their Right to Buy. But this option would also generate a larger financial surplus for reinvestment, which could be used in partnership with other providers.”

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