HACT'S Director of Evidence, Data and Insight wonders if housing providers are aware of the impact their community investment activities has on their bottom line and whether, in fact, it even matters.
Set aside for a moment, if you will, thoughts of the work HACT has been doing in recent years to help the social housing sector understand its social impact. And particularly, please put to the back of your mind our work on the social impact of community investment activity. Today, I want to write about something altogether more... bankable. I am thinking about the value of community investment for a housing provider's bottom line.
Let us take a concrete example. Many housing associations are engaged in activities designed to boost the employment prospects of their tenants. Sure we might celebrate that the tenant getting into work starts earning an income that (hopefully) means more money in his or her pocket; and we might be delighted because we know that the wellbeing impact of being in employment goes well beyond the extra money as people gain life satisfaction from being gainfully employed; and we might even be happy for HM Treasury, acting as ever on behalf of all taxpayers, to have helped a little at ensuring the sustainability of our social security safety net (or "chipped away at the welfare bill", depending on your outlook). But what about the housing provider? What benefits does it derive from its work in this area?
Well perhaps it gets a more sustainable rental income stream. In the approaching era of direct payments, a tenant with more money coming in each month is a tenant who has more money to pay the rent. But the benefits might go beyond that. For starters, might there be lower void costs, if working tenants are better able to pay the rent to the extent that they experience fewer evictions for arrears? And looking broader still, do we find, for example, that tenants who are out at work during the day place fewer calls on the repairs service, either because the property is simply experiencing less wear and tear from lower occupancy, or because they choose to use some of their increased income to do odd jobs around the home? Could there even be an impact on reports of anti-social behaviour, either where the tenant is no longer hanging around, or because someone else's loud music in the daytime is no longer an annoyance once you are out of the house at work yourself?
It's a fun game to think through the complexity of how some of the beneficial work you do for tenants might interact with the various service areas in a housing provider. When we did this exercise across a range of community investment activity as part of our scoping work we ended up with a flow chart showing dozens of chains by which 12 community investment activity areas might end up having an impact on the bottom line. Of course, some of these are far less likely than others to play out in reality, either because the effect does not happen or it is too small for us to detect. And until we investigate properly none of the effects have been proven, let alone their values calculated. But using advanced data analytical techniques, HACT will shortly be embarking on a project with a number of its innovation partners in the social housing sector to identify what impacts their community investment activities seem to have on their bottom lines.
Now, in practice, do I really think that bottom line impact is the primary outcome that housing providers should be targeting with their community investment activity? No, not really.
Do I believe that if they were to undertake a crude assessment of money spent against return to the business, they could really expect to turn a profit from all of their good deeds? We've not done the research yet, but on balance I think that's unlikely.
But might we find that some types of community investment activities have beneficial side effects on an organisation's bottom line, which might offset some of the expenditure on the work? Again, only doing the research will tell us, but that seems highly plausible.
Perhaps, more accurately then, this blog post is not really about trying to understand the value of Community Investment, but about getting a more nuanced handle on its true costs. We may find that, when considered holistically, they are not as high as a simple count of expenditure might suggest. And if the 'bang' we are getting comes for a lower net 'buck' than we originally thought, any assessment of value for money will only become more impressive.
If you are interested in joining the project, please contact Mary-Kathryn Rallings for the project specification.