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Comment: Accounting for Kids Company – why charities’ books must add up. By Prof Josephine Maltby

Friday, February 12th, 2016

This article was originally published by on The Conversation by Prof Josephine Maltby. Read the original article.

The collapse of the charity Kids Company has attracted a huge amount of attention – not least as a result of the drama involved. Investigations into what went wrong have brought forth stories of teenagers queuing up to pick up envelopes of money from the charity that they promptly spent on drugs.

Reports also emerged that the charity claimed its closure would lead to riots and attacks on government buildings. And transcripts can be read of a long and rowdy session of the public administration and constitutional affairs committee of MPs, which investigated the closure of the charity and took evidence from Camila Batmanghelidjh, Kids Company’s founder:

Camila Batmanghelidjh: I would like to ask you on what basis you have decided that this is a failing charity. Because if it is on the basis –

Chair: Because it has gone bust.

The less dramatic story, and the more worrying one, is about financial control in Kids Company and the value placed on financial literacy across the charity sector.

Kids Company produced annual accounts which it duly deposited with the Charity Commission, the charity regulator. It went through the proper audit process every quarter, every year – something Alan Yentob, chair of the charity’s trustees, frequently mentioned in his evidence to the MP inquiry. However, the fact that every year referred to Kids Company’s shortage of reserves, and potential cash flow problems, seems to have been outweighed by the copious data making claims for its successes.

In 2013, for instance, its annual report (pdf) featured data on the problems of “750 exceptionally vulnerable young people” who had been successfully helped by the charity, and another 200 under-14s, one in four of whom had no tables and/or chairs in their houses. Kids Company was also very vocal in claiming that it supported “some 36,000 children, young people and vulnerable adults”. But this has been disputed, as only 1,900 cases have been passed onto London local authorities since its collapse.

MPs have asked questions of Kids Company founder Camila Batmanghelidjh and the charity’s chairman of trustees, Alan Yentob.
PA Wire

Even if all of Kids Company’s impressive data were true, the reader of the accounts has nothing to measure them against. How were these sample groups selected? What was the evidence for these problems? Is this better or worse than other charities, or than what might be expected of Kids Company? Reports of Kids Company’s good deeds were heeded over its financial viability, as indicated by exchanges between the government and senior civil servants.

Judging results

What has attracted less attention than the apparent overstatement of clients was the reluctance of Kids Company to let its results be monitored. The National Audit Office (NAO), tasked with certifying the accounts of all government departments, commented that the government had “relied heavily on Kids Company’s self-assessments to monitor its performance”. Until 2013, the key performance indicators that the NAO requested did not appear in Kids Company’s quarterly monitoring reports.

This improved in 2013-15 when the government specified some “delivery expectations”. As the NAO reported, Kids Company outperformed to a startling degree: “Against a target of 1,347 interventions in 2013-14, they delivered 30,217 interventions.” But how successful were the interventions in improving outcomes? There was no pre-arranged standard for measuring success so the government could not monitor it.

When the MPs inquiry asked Kids Company’s auditor about the charity’s reserves – how much he thought would be a safe level – he suggested six months of expenditure or roughly £12m would be an appropriate level. In its last available balance sheet for 2013, the last available, Kids Company shows its unrestricted reserves were just £434,282 in 2013, with a further £1.3m in restricted reserves and designated funds – about enough money to keep it going for a fortnight.

The trustees stated in the 2013 report that they were aware reserves needed to increase, but that their “business model is to spend money according to need, which is consistently growing. We aspire to build up our reserves when circumstances allow”. It seems that they deferred the aspiration for too long.

Causes vs accounts

Some have accused a focus on accounting as a distraction from worthy causes. Some decisions, it is argued, should not be made on the basis of purely financial costs and benefits. How can individual welfare or happiness – and the contribution of charity – be valued in monetary terms? Financial accounting is just a reductive simplification of the work charities do, treating people’s welfare as an expense to be contained. On this basis, we should not criticise Kids Company for its financial collapse – the work it did was invaluable.

But the alternative to measuring and monitoring charity performance is not the free flow of support to the deserving. It is the loss of resources that could potentially have been better managed and better used elsewhere. Kids Company received a total of £46m of public funding – £42m in central government grants, £2m from local authorities and £2m from lottery organisations – between 2000 and August 2015, when it filed for insolvency.

If Kids Company had been accountable, run by trustees who understood the financial risks they were taking, and monitored by funders against measurable outcomes, it might not have gone bust.

TWENTY65 project launch makes a splash

Monday, February 1st, 2016

TWENTY65 launch London Jan 26 2016

Sheffield Water Centre, alongside Drs Kamal Birdi and Tina McGuiness from the Management School, celebrated winning the EPSRC’s Grand Challenge for ‘Sustainable Water for all’ at the TWENTY65 Official Launch at Whitehall, London.

The event was opened by Kedar Pandya, Head of Engineering at EPSRC and was attended by key players from the Water Sector, including the Head of Sustainability for the GLA and the KTN Manager for Water, ARUP, Murphy Group and Water Utility companies from across the UK.

The research initiative, which will see the University of Sheffield collaborate with five other universities on meeting the water challenges of the next 50 years, was launched on Monday 25th January. TWENTY65’s tagline is ‘Tailored Water Solutions for Positive Impact’. It will seek to address the ‘grand challenge’ of providing sustainable water for all in the face of population growth, climate change, urbanisation and ageing infrastructure in the years to 2065. The project aims to provide thought leadership through a partnership approach between the universities, water utilities, trade associations and the supply chain.

Dr Kamal Birdi (pictured above left, standing), who is leading the project theme on collaboration for innovation, said: “The event began with an overview of the programmem with project leads outlining their research plans. I then facilitated a range of activities designed to get different water sector stakeholders (water companies, supply chain, professional bodies and academics) to identify the most critical disruptive innovations we require in the water sector over the next 50 years. We were trying to put our collaboration for innovation ethos into practice.

“There were 72 attendees from many sectors. The day was busy, buzzing with enthusiasm and discussion and seemed to engage everyone thoroughly in TWENTY65’s ambitions.”

Tina McGuiness is contributing to another project theme on mobilisation.

Comment: George Osborne’s ‘march of the makers’ will need Europe on its route map. By Prof Sumon Bhaumik

Monday, February 1st, 2016

This article was originally published by Prof Sumon Bhaumik on The Conversation. Read the original article.

The UK economy is in recovery, according to the latest government figures – but what is, on face value good news, is tempered by concern at the pitifully small contribution made by the manufacturing sector. Growth has been driven almost entirely by the services sector, and in particular by the business services and finance industries.

There is noticeable growth in only two manufacturing industries for which data are readily available: chemicals (and chemical products) and transport equipment. Most other industries have moved sideways between 2010 and 2014.

At a political level, this is problematic on two counts. First, this trend doesn’t alleviate concerns about UK’s exposure to future shocks to the global financial system. Second, the government has raised expectations about a “rebalancing” of the economy towards manufacturing – the chancellor of the exchequer, George Osborne, has made much of creating “a Britain carried aloft by the march of the makers”. But the numbers still don’t seem to bear that out.

Experts have offered a number of explanations about the persistent weakness of the manufacturing sector, some more justifiable than others. These include the persistence of low global demand for goods and commodities, the amount of debt in the household sector and its impact on household consumption, and the strength of the British pound.

Since the figures reported above are not forward-looking by their very nature, they do not tell us whether there are structural factors that could prevent the rebalancing of the economy back towards manufacturing industry and how feasible it would be. The challenge for rebalancing is significant.

Author provided

Data available from the World Bank suggest that of the major developed and emerging market economies of the world, only South Korea has been able to increase the manufacturing sector’s share of GDP between 1996 and 2014.

While the UK manufacturing sector’s share is considerably lower than that of Germany, it is comparable to that of France and the US. This, in turn, raises the question about the ability of a single country to significantly rebalance its economy in favour of manufacturing when global growth is weak and when many countries – for example, the “Make in India” initiative – are trying to do the same thing.

Finding the right niche

Perhaps the most important question for the UK’s manufacturing sector is where firms and corresponding industries are located along global value chains (GVCs). Recent research from the European Central Bank suggests that as the global production system becomes increasingly dominated by value chains – Apple, for example, has its intellectual property and design in the US, sources its chips from South Korea and assembles its phones, etc, in China – it will be important to “look beyond industries to understand trade and production patterns. Countries [would] specialise in specific business functions involving specific tasks rather than specific industries”.

The strategic focus, correspondingly, would have to be not so much in the development of entire industries but rather to find niche areas of expertise high up in the GVCs of a relatively wide portfolio of industries. This in turn has implications for innovation capacity that is both much discussed and where the UK, with a score of 62.42 for the Global Innovation Index, is ranked second globally – ahead of the US (5th, 60.10), Germany (12th, 57.05), South Korea (14th, 56.26) and Japan (19th, 53.97). While productivity growth continues to be a challenge, therefore, there is at least some evidence that the UK may be well positioned to grab a niche relatively high up GVCs, where much of the value is created.

This brings us to the two issues with huge political implications. First, are we asking the right questions about manufacturing sector growth and its share in the economy? If the future of manufacturing lies in innovation, will we see an inevitable period of industrial decline as industries in which UK firms do not have competitive advantage shrink while new industries and firms grow to make their mark?

Steel worker: left behind in the quest to modernise?
Reuters photographer

Second, what is the objective for growth of the manufacturing sector? Is the objective a more diversified UK economy that is not heavily reliant on the financial sector – or is there an unspoken subtext about generating demand for a well-paid and organised sector labour force harking back to the post- World War II era of manufacturing growth. While innovation-driven manufacturing sector growth may be quite feasible, it may not necessarily lead to the creation of a large number of well-paid jobs for people with all skills levels.

Going it alone?

Then there is the question of how at British exit from the EU might affect all this. While crystal ball-gazing is hazardous, two things immediately come to mind. If the future of UK manufacturing lies in an innovation-led move up the GVC ladder, it would need an economy that encourages innovation and clusters of enterprises that may be costly to develop within borders of a single country whose resources are limited. To the extent that Brexit would raise the transactions cost of forming these eco-systems and clusters in cooperation with other European countries, it would be more prudent to stay in than stay out.

Further, since integration with GVCs quite likely has implications for skill gaps at one end of the labour market and structural unemployment at the other, it may be imperative for the UK to be part of the intra-EU flow of labourers. Retraining of labourers in sunset industries to prepare them for sunrise parts of the sector sounds good in theory – and makes for good political speeches – but it cannot possibly be a substitute for free mobility of labour within 28 countries that will present opportunities for workers with particular skills to find the right niche and industries with particular needs to hire the right workforce.

Policymakers, in other words, would have to have clarity about the objective for manufacturing growth and rebalancing: either achieving greater diversity within our GDP portfolio so that we are not overexposed to future financial crises, or creating the space for a certain kind of employment. Importantly, it would be prudent to make those choices within the the EU.

Employer supported volunteering: delivering on the potential

Friday, January 22nd, 2016

Maximising and delivering on the potential of employer sponsored volunteering is the focus of a high-profile policy breakfast in London.

The event, which takes place in the Churchill Rooms in Westminster on Wednesday 27 January, will showcase the research of Dr Jon Burchell, senior lecturer at Sheffield University Management School, and Dr Joe Cook, an academic at Hull University Business School

Building on eight years of research on the subject, delegates will consider the future of employer sponsored volunteering in the UK. Dr Cook, said: “We are delighted to be able to support this high-profile discussion and hope to focus on establishing a strategy that is both fit-for-purpose and achievable.

“Almost 50% of the population in the UK do some kind of volunteer work and that is to be commended. We want to ensure that both businesses and charities are equipped to engage with volunteers in the best way possible.”

The government is keen to build on Britain’s volunteering culture – it pledged during the election that employees of large firms and public sector employees will be entitled to three volunteering days a year.

“But this pledge places significant difficulties for businesses,” said Dr Burchell. “Current successful company volunteering strategies offer on average one day per year per employee, from which less than one-third of employees take up the opportunity. Achieving a rapid increase in volunteers and volunteer hours just through offering paid time for example, may prove to be overly ambitious.”

The event, which launches a series of regional workshops across England to examine the infrastructural challenges, brings together a panel of experts to discuss the infrastructural implications of the policy and consider how best to maximise the impact of employee volunteering in the UK. Organised by Britain’s leading cross-party think-tank, Demos, in partnership with the universities of Sheffield and Hull, the Office for Civil Society, Business in the Community (BiTC), and the National Council for Voluntary Organisations (NCVO), the discussion will explore the challenges of overcoming the key barriers to building effective and sustainable partnerships.

Other speakers include: Graham Frankland, National Grid, Dr Justin Davis-Smith, NCVO, Lisa Cunningham (BiTC), and Neil Cleeveley, National Association for Voluntary and Community Action. The event is chaired by Peter Cheese, Chartered Institute of Personnel and Development.

Key questions for discussion include:

  • How can we ensure that the impact of employee volunteering is maximised?
  • How can more third sector organisations be equipped for employee volunteering, and present opportunities for volunteering effectively to businesses?
  • How can local infrastructure support connections between business and community groups to facilitate better employee volunteering?
  • How can we encourage greater employee volunteering amongst small businesses in particular?

The event will lay the groundwork for a series of workshops across England which will examine the local challenges for Employer Sponsored Volunteering and the potential for stronger brokerage and infrastructural support.

The universities of Sheffield and Hull will organise these workshops in partnership with the Office for Civil Society and the Local Intelligence Teams in partnership with Business in the Community and NCVO.

Comment: Housing policy can’t be fixed until we treat houses as homes and not as stores of wealth

Monday, December 21st, 2015

First published on LSE’s Politics and Policy blog – click here to read the original edition.

Last week, Stewart Smyth outlined recent developments in Social Housing policy up to the Comprehensive Spending Review. In this follow-up article he looks to the future, arguing that lack of access, not lack of housing itself, is a crucial problem. He further highlights how the issue runs deeper still; until we treat houses as homes, and not as stores of wealth, the contradictions in housing policy cannot be solved.

Housing policy, no less than any other policy area, is full of tensions and contradictions. Some of these exist in the realm of political hyperbole: when the Chancellor promises the biggest house building programme since the 1970s, he omits that those levels were only achieved because of the contribution by local authorities. And his policy has no budget or role for council house building. Another contradiction is shown with the dramatic reduction in upfront capital grants for housing association new builds and the introduction of affordable rents: this apparent saving comes at a cost of increasing the housing benefit bill.

The Comprehensive Spending Review reported that house price increases have moderated down to an expected 6.2 per cent in 2015, from 9.9 per cent in 2014. Yet it also included a prediction from the Office for Budget Responsibility that average earnings will increase yearly by only 3.5 per cent, up to 2020. So addressing the housing crisis in a piecemeal manner will create winners and losers as one side of a contradiction is preferred for a period of time.

But the house price/wages increase contradiction hints at a deeper issue – what is the nature of the housing crisis? This seems like an odd question, as the common sense answer is that we are not building enough new homes. Certainly, in the dominant policy discourse this would appear to be the sole issue. For example, the Lyons Review takes as given that:

“For decades we have failed to build enough homes to meet demand. We need to build at least 243,000 homes a year to keep up with the number of new households being formed.”

Earlier this year, the Department for Communities and Local Government estimated household formation in England at 220,000 per year up to 2020. The Conservative government (appear to) accept the need to build more houses and have preferenced first-time buyers with their policies since the election. However, when you dig beneath this consensus the issue starts to metamorphosise. In his 2014 book, All that is solid, Danny Dorling convincingly shows that we have never had as much sheltered space available in Britain; the issue is one of inequalities in terms of access to that space. And Dorling is not alone.

The UK Housing Review Briefing Paper 2015 highlights the link between economic inequalities and access to housing:

“Among homeowners just over a quarter of all housing wealth was owned by people in the top income quintile with half owned by the top two quintiles.”

In an earlier report the same authors show that nearly half of owner-occupiers under-occupy their homes. Add in tax changes, such as increasing inheritance tax reliefs, and the conclusion is stark: “the housing market seems destined to continue to fuel inequalities in the UK”.

The conclusion here is that building more homes will only add to the problem as the inequalities continue. One potential solution would be for people under-occupying family homes to downsize instead. But this highlights a deeper issue..

Fundamental contradictions between exchange values and use values

For many owner-occupiers their home is a store of wealth based on its potential exchange value (i.e. what it could be sold for). This is the policy position we have all been encouraged to embrace whether it is through tax incentives, such as mortgage interest relief, or huge discounts through the generations of the Right to Buy policy. The contradiction occurs here when we consider the use value of a house, as a place of shelter, somewhere to live. Further, an address is needed to access a range of social services (such as health, social care and education) and participate in democratic society (for example, through elections).

The past forty years has seen consistent and persistent efforts to undermine the use values of housing, preferring ever-increasing exchange values; as David Harvey has summarised: “The reckless pursuit of exchange value destroyed, in short, the capacity for many to acquire and afterwards sustain their access to housing use values”.

Therefore, the fundamental contradiction is between the use value (somewhere to live) and exchange value (a source of wealth) for housing. Framing the housing crisis in this way allows us to see clearly the impact that policies will have. Further, understanding this is important as a misdiagnosis of the problem leads to the pursuit of inappropriate policy solutions. Current government policy is aimed at enhancing exchange values through subsidising homeownership. This is not surprising given the powerful institutional actors (construction firms, estates agents, lawyers, financiers etc.) who all gain from an expanding housing market.

But there is a desperate need to develop policies that emphasise use values. In general terms this will mean withdrawing increasing numbers of homes from market relations, by maintaining and expanding the socially rented sector. Policies that would contribute to that end include:

  • Ending the right to buy for council housing and abandoning its extension to housing associations (especially, as this will result in even more council housing being sold off to fund the discounts for housing association tenants);
  • Developing and enhancing a right to sell (or mortgage to rent scheme) policy. Such a scheme was introduced in the aftermath of the 2008 crash but as interest rates fell the levels of arrears also fell. With interest rates set to rise there will again be a need for an alternative to evictions;
  • And any new building must be for socially rented purposes (either through councils or housing associations).

At this point it is important to remember that social rented housing is financially sustainable, as a report for SHOUT and the National Federation of ALMOs has shown. For years, successive governments raided council housing rents, restricting the amounts spent on maintenance and management (this was highlighted by the Moonlight Robbery campaign). In addition, the housing association sector is making surpluses, over £2 billion in 2014.

The benefits of emphasising socially rented properties include: directly addressing those on waiting lists (including the hidden homeless such as sofa surfers); a reduction in the housing benefit bill as social rents are lower than either affordable rents or the private rented sector; and maintaining and developing mixed communities as opposed to the displacement currently taking in London and other city centres.

Expanding the social rented sector also provides a straightforward answer to the question, where are poor people supposed to live? And arguably, the most important effect of a bigger social rented sector is that any future property bubble has less room to inflate and therefore, the inevitable crash has a lower impact on the banking and finance system, the economy and society generally.

This leaves a twofold task for academics, practitioners and policymakers; first, to develop policies that emphasise use values (i.e. socially rented) in housing, and second, to find ways of popularising them among the population and politicians. No small challenge, then.

Comment: Lessons from history – why the push for savings for all is wide of the mark. By Prof Josephine Maltby

Thursday, December 17th, 2015

This article was originally published on The Conversation. Read the original article.

As predicted the US Federal Reserve has raised interest rates after nearly a decade, which means a slightly better rate of return for savers. Meanwhile in the UK, the Bank of England has kept the benchmark rate at a rock-bottom 0.5% for the 81st month in a row. All the while there are calls from policymakers and politicians for a grand vision for saving. People should take responsibility, the argument goes, for their own welfare.

And the state needs them to believe it. Otherwise, it’s claimed, a combination of factors – longer life expectancy and financial illiteracy – will create an impossible burden.

UK pensions are currently undergoing an apparently endless set of reviews and alterations. The steady rise in the age of qualification for state pension, the chance to use pension savings as a bank account, and the introduction of auto-enrolment at all workplaces by 2018 are all aimed at increasing savings for retirement.

And there may be more to come. Both Iain Duncan Smith, the work and pensions minister, and the prime minister David Cameron, called for a rethink of social security – potentially a move to a system where people would “save from day one”, along the lines of Singapore’s Central Provident Fund. This would involve making mandatory deposits into a fund to be used as needed, in times of sickness or unemployment.

Iain Duncan Smith wants us to be better savers.
EPA/Facundo Arrizabalaga

The calls for saving, with strong government support, are not new. They go back to the birth of the savings bank movement at the beginning of the 19th century. In the period after the French Revolution the British elite was worried about economic crisis, unemployment and labour unrest. Organisations like friendly societies and early trades unions brought working men and women together to defend their interests. Savings banks run by local elites (the vicar, the squire, the factory owner) were conceived as a solution to social and political anxiety. Promoting savings to the lower classes was aimed at cutting the “enormous” cost of the poor rates charged by parishes.

The movement took off with support from the two main parties, the Liberals and Conservatives, and from the churches. By 1861 there were 645 banks in cities, towns and villages nationwide. Savings were good for everyone, they claimed. The banks would foster the virtue of thrift, discouraging the poor from drinking and idleness.

Saving would also, literally, give them a stake in society, or as Scottish minister and theologian Thomas Chalmers said at the time: “An interest in the social order, in the peace and stability of the commonwealth.” A man with a bank balance was much less likely to call for the overthrow of the system. William Gladstone and Benjamin Disraeli, Liberal and Conservative party leaders, both suggested that a man with £50 or more in the bank deserved to be given the vote.

Criticisms of the savings movement

The banks’ drawbacks, though, attracted less attention. Their interest rate, tied to the return on government bonds, was not generous.

With amateurs on their boards, the banks were vulnerable to managerial fraud, and there were some sensational collapses – those of the Dublin and Cardiff banks were the highest in profile. Savers had no guarantee of repayment, and might lose every penny. Some people avoided the local savings bank because they did not want their bosses to know how much they had saved, in case the information was used against them when they asked for a pay rise. And there were continuing accusations that the banks were mainly used by the middle classes, because they were the ones with the spare cash. Being poor meant having no margin for savings.

Mill workers would have struggled to make enough to save.
Penny Magazine Supplement, December 1843

By the end of the 19th century, the number of savings banks, especially of the small village banks run by the gentry, was falling. New organisations run by and for their members – the building societies, the Co-operative movement and the trades unions – were getting bigger and stronger.

And there were now challenges across the Liberal and Socialist parties to the claim that the poor should be monitored and disciplined to make them behave better and consume less.

Writing in 1909, the Fabian Emily Townshend mocked the view that “for any man to enjoy any benefits which he has not definitely worked for and earned is injurious to his character”. She pointed out that she had done nothing to earn the annual dividend she got on her railway shares, or the “miraculous” news that “certain shares that were worth £4 yesterday are now worth £5”. Why should the poor be subjected to a harsher discipline than she was?

There are inescapable parallels with the birth of the savings movements in the 19th century with the political calls for savings today- for instance calls to be thrifty and help control public spending, while financial institutions with amateur non-executive directors ignore mismanagement until it’s too late. And today there are groups for whom saving is not an option. Recent research suggested that savings are difficult or impossible for a substantial number of working people and many do not qualify for auto-enrolment.

It goes to show that ideas around thrift might sound good and appeal to key parts of the voting electorate. But it begs the question: how will the excluded respond when they keep being urged to pay for a stake in society?

Comment: Inviting market forces in – financing social housing from the coalition to the spending review

Friday, December 11th, 2015


First published on LSE’s Politics and Policy blog – click here to read the original edition.

In the first of two articles, Stewart Smyth outlines the recent history of policy changes towards social housing, from the apparent certainty that had emerged at the start of the year, through to the changes that have occurred in the sector since the election in May, and finally up to the recent Comprehensive Spending Review.

At the start of 2015 there was a certainty surrounding social housing; after an initially tentative start by the Coalition government, a new settlement for building social housing had emerged, focused on dramatic cuts in up front grants and a greater emphasis on developing housing associations having to plug the gap.

The election campaign signalled potential large reforms including the extension of Right-to-buy to housing associations. As if that wasn’t a big enough change, the summer saw the first indications that housing associations would be reclassified as public organisations, with their debt (approx £60 bn.) being added to the government’s finances. This move was confirmed on 30 October by the Office for National Statistics.

We can use a financialization framework to help make sense of at least part of this.

Financialization is a term that is increasingly being used to capture a range of processes focused on the increasing power of financial capital through the financial services industry in relation to households. But financialization operates across a range of fields and in multifaceted processes.

There are two facets immediately relevant to understanding the Coalition’s social housing policy – the shareholder value revolution with its accompanying short-termism and the increased amount of debt within the economy in the UK economy. For example, the shareholder value revolution is focussed on achieving this year’s numbers; in this process, long-term capacity and productivity is reduced. According to the McKinsey Global Institute the UK’s total debt to GDP ratio now stands at 252 per cent; an increase of 30 points since 2007.

Both processes are evident in the Coalition’s social housing building programme – Affordable Homes Programme (2011-15). Under the AHP the government specified the types of homes (or products as they call them) they would fund:  affordable rent homes, affordable home ownership, mortgage rescue, empty homes and supported housing for the elderly. They also made it clear that homes at social rent levels would only be supported in exceptional circumstances.

In 2012, the National Audit Office investigated the AHP programme and showed how the financing was working. They noted that ‘the Programme is intended to build housing with a third of the grant per home of earlier affordable housing schemes’. In further detail, they added:

“It will involve housing providers spending some £12 billion on new homes, funded by a combination of government grant (£1.8 billion), borrowing by providers supported by rents on the new properties (we estimate around £6 billion), and funding from other sources (about £4 billion). Rents totalling around £500 million a year on new homes will be paid by tenants, approximately two-thirds of whom are supported by housing benefit.”

It was clear from the start that the AHP was designed to increase debt levels, debt that the government thought would be private.

The focus on short-termism is not as immediately obvious but is no less an important element, and can be seen in two aspects. First, in the shift from higher upfront capital funding (under the previous programmes) to a reliance on higher rent levels that increase the benefits budget (i.e. revenue expenditure) over the longer term.

This can also be seen in the government’s attitude towards value for money which was to deliver the largest number of homes given the funding available. However, according to the NAO this produced a lower benefit to cost ratio than the previous National Affordable Homes Programme (2008-2011).

The second aspect of short-termism concerns the use of housing association resources, whether that is through the rationalization of housing stock (e.g. the sale of voids or conversions of social rents to affordable rents) or utilizing any spare borrowing capacity. These are one time funding manoeuvres, which are considered to be unsustainable as a long-term funding model.

The AHP is incapable of addressing the lack of social housing supply and therefore cannot help the 1.7 million households on council waiting lists. Unless there was a change in policy direction, the AHP was leading to a debt bubble being inflated which at some point would become unsustainable; but it would be off the government’s balance sheet.

Therefore, the reclassification of housing associations as public bodies would then appear to be a major headache for the government; yet the response so far has been rather muted, with no mention of re-privatisation in the 2015 Spending Review.

Further, because the announcements confirming the extension of Right-to-buy to the sector and the ongoing reduction in rents came at the same time that the ONS started to look at housing association, there is a perception that these were the causal factors in the final reclassification decision. However, the ONS make no mention of either of these policies in their notification statement. Instead, the decision was backdated to 2008, to the Housing Regeneration Act (2008) introduced by the previous Labour government

This all gives support to the argument that the growth of the housing association sector was not about the artificial measurement of public debt but had more to do with a twofold ideological stance of successive government since the 1980s. First, is a strategy to undermine council housing through the stock transfer process. Second, is the belief that competitive market forces can deliver (mainly through some sort of trickle down process) social housing for the most needy in our society.

The concern now is that the government will treat housing associations in the same way as they have council housing and turn it into a Cinderella service through cuts in funding and the extended Right to Buy. This is what was behind the co-ordinated attack on housing associations in July by Channel 4 news and others.

Of course many of us have been critical of the excessive executive salaries in housing associations for many years; something successive governments have shown no concern about. It is the charge that housing associations are not building enough that is a deliberate misrepresentation of the sector. The housing association sector is not designed to deliver a mass building programme.

It is differentiated in its composition with many small associations who do not develop new homes. For example, of the 1,783 registered providers only 336 have more than 1,000 homes. Further, nearly half of these are stock transfer associations who were created for the sole purpose of improving the condition of the housing stock through the Decent Homes policy. There are a relatively small number of very large associations who have active development programmes. In 2014, the top 50 developing associations completed more than 40,000 homes.

In the space of nine months the financial and funding environment within which housing associations operate has changed utterly. There is now significant uncertainty about the future direction of government policy for the sector coupled with significant strains being placed on individual housing associations that have developed strategies based on one set of assumptions only for all those to change.

From the plough to the plate: reducing environmental impact and improving efficiency

Friday, December 11th, 2015

One of Britain’s biggest and best-loved bread makers has joined forces with University researchers and a leading agricultural intelligence provider, to better understand the impact its activities are having on the environment – from the plough to the plate.

“It’s important for Hovis to know where the environmental hotspots in their supply chain are,” says Management School supply chain and energy efficiency researcher, Dr Liam Goucher. “By working with us, we can help them identify those hotspots and develop targeted solutions that both reduce the impact on the environment and make them more efficient as a company.”

Using real-world data ranging from the energy consumption of its ovens and mills, to the volume of fertiliser used on its farmers’ fields, members of a multidisciplinary research team are now undertaking analysis using the Supply Chain Environmental Analysis Tool (SCEnAT) developed by Professor Lenny Koh at the University’s Advanced Resource Efficiency Centre.

“This tool allows us to pin point where the weak points in a supply chain are and assess their impact across a range of environmental indicators,” says Professor Koh. Early results, which are currently being poured over by Hovis and independent agricultural intelligence services company, Agrii.

“What makes this project especially interesting to a company like Hovis, is that once we have identified and quantified environmental impact throughout the supply chain, the members of our multidisciplinary team are able to develop viable and sustainable interventions to address key problem areas,” says Dr Liam Goucher, who has undertaken much of the original research.

Whether it is a way to reduce the energy inputs needed to bake the more than 60 million loaves annually in a single bakery, or the development of novel seed varieties and production techniques, the Sheffield team has the intellectual resource to design these solutions.

But for biochemist, Professor Peter Horton, of the University’s Grantham Centre for Sustainable Futures, this specific piece of research has much wider implications. “We know that big challenges such as sustainable food production will not be met by research within a single discipline. That’s why we are so passionate about the integration of science, engineering and social science here at Sheffield. By creating teams like this we can not only identify the problems, we can also design the sustainable solutions,” he added.

IWP Conference 2016 – submission deadline extended to 7 December 2015

Monday, November 30th, 2015

Attendees now have more time to submit their work to be considered for the Institute of Work Psychology’s International Conference 2016.

The deadline for submission has been extended to Monday 7 December 2015 – and it’s easier than ever to upload your work.

Dr Eva Selenko, Academic Chair of the conference, said: “We’re delighted to keep paper submissions open for the conference in June, which will look at how work and occupational psychology can make a difference, with a particular focus on work, wellbeing and performance. The conference always attracts a lively and varied selection of papers and presentations and we look forward to reviewing them in the new year.”

You can find guidelines, as well as the submission form, here.

The conference has attracted a number of high profile keynote speakers, including Prof Gillian Symon, Prof Rolf Van Dick and Prof Michael Leiter. Find out more here.

Research toolkit will improve working lives on a global scale

Wednesday, November 25th, 2015


A toolkit developed by experts at the Management School will help ensure that organisations operating in informal economies worldwide are upholding labour standards and respecting employee rights.

Created following research by Professor Jason Heyes (pictured above) and Dr Thomas Hastings, both from the WOERRC research centre, the document entitled Extending Labour Inspection to the Informal Economy, was commissioned by the International Labour Organization (ILO) – a specialised UN agency with 186 member countries.

Professor Heyes, who has worked with the ILO since 1998, commented on the project: “The ILO creates, promotes and upholds labour standards in all of its member states. I work with the Governance and Tripartism Department, which is responsible for providing member countries and social partners with advice and support on matters connected to labour administration and labour inspection. Labour inspectorates are government bodies that, through proactive and reactive inspection work, play a vital role in improving employer compliance with employment rights.

“This toolkit is intended to help labour inspectorates to address employment rights issues in the informal economy, thereby increasing the protection provided to vulnerable workers. Most ILO member countries have a labour inspectorate of some kind – they check workplaces and ensure employers are respecting employment rights, including issues such as minimum wage requirements, health and safety concerns, holiday entitlements, freedom to join trade unions and equal opportunities in the workplace.”

The innovative, easy-to-use toolkit has been designed to connect new academic theories with practice, via actions taken by the inspectorates. It will develop the ILO’s capacity to provide support to countries tackling issues related to the informal economy, and will increase the effectiveness and knowledge of inspectors in improving protection for employees.

The toolkit is accompanied by an online message-board, where users can discuss how the toolkit has impacted on their role and feed-back information to the research team at Sheffield. Dr Hastings discussed further testing of the toolkit: “In December, we will present the toolkit and project findings to senior ILO officials in Prague. Then we hope that it will be trialled in South Africa in the New Year, and are exploring further international testing options throughout 2016. It has a global reach, as we have considered cultural differences throughout and the toolkit can easily be adapted to benefit countries all over the world.”

The practical implications of the toolkit are huge, and align with WOERRC’s mission to promote decent work and decent workplaces and the Management School’s commitment to supporting socially responsible work practices across the world.

This research was funded the ILO and an ESRC Impact Accelerator Award.
Click here to download the toolkit.