From Trafford To The United Nations

You might have noticed that for only the second time in my working life, I've had a business engagement outside the UK this week. I was asked to talk about the role of social housing in the recovery and sustainability of Real Estate Markets at the United Nations in Geneva this week - and it's the kind of offer that you just don't turn down!

If you now have an image in your mind of grand state rooms within which eloquent and rigorous debate results in consensus building at the highest level, I'm sure that was going on somewhere, for the buildings were indeed very grand. Our little corner of the UN was however, slightly more prosaic and at the end of the day, the debates were slightly less conclusive and to some extent were left hanging in the air. And, as it also took me (and quite a few others too including one charming woman lobbying on behalf of human rights abuses in Eritrea) more than an hour and a half to get through security because "my name wasn't on the list", I can confirm that the UN is also a huge bureaucracy!

Nonetheless it was a fascinating opportunity to hear first-hand from a series of experts about problems in Real Estate Markets in hugely diverse countries. The part of the UN that put on the session, only covers Europe, but their definition of that geography bears no relation to anything I ever studied for my degree. For them, Europe includes the whole of North America, "Europe" as it is more conventionally understood, the ex-soviet block countries in transition like Kyrgyzstan and Georgia, as well as the monolith of Russia itself. Immediately you can see the enormity of the task of arriving at a set of unifying principles which can apply across such physically, politically and economically diverse terrain. That they managed to produce a policy framework at all is pretty surprising!

Everyone seemed to have pretty much a common vision for what a sustainable Real Estate Market looked like, with the tests of affordability for all, environmental impact and community cohesion being universal. But clearly starting points for different countries varied enormously. I suppose that was my first thought - that in the UK, it might not seem like it at the moment, but we are pretty well off. Not for us, the complete absence of any written land ownership records, which is the case in some countries, or the corrupt and untrusted records that exist in others. Our markets may have their problems, but the uncertain provenance of land and buildings, generally, isn't one of them.

My presentation (that link should show you mine and all the other presentations made during the day) focused on the unique role that social housing, and social housing providers could make. I used the example of the Old Trafford Masterplan - a partnership between THT and Trafford Council, to show how housing associations, with their long-term interests in an area and their focus on social as well as economic value, can take developments forward at a time when others can't or won't, thereby creating the conditions which enable the private sector to follow in behind.

I spoke also about how we take into account the housing needs of the whole community rather than only those of the people who are able to pay; how we are not as influenced by the changing winds of national and local politics as local government are, and (at least for now!) how we have access to national and local government subsidy, whether that's in the form of loans, grants or land, as well as the ability to attract private investment. Most of all though, we can play that role of developing markets because we care about People as well as Properties & Profit.  If you want to see the whole of what I said it's available here.

So where did the experience leave me? You know what, we are so fortunate we should get on and do what we can, rather than keep whinging about what we can't. And where did it leave them? Well, at least they all now know that Manchester United FC is based in Trafford, and not Manchester. Did you?

Who Wins My CIH Conference Awards?

As mentioned last week I was giving a presentation at the CIH Conference which was held on “our patch” in Manchester. It was an interesting event and the location certainly gave it a different feel to Harrogate. There was something about a more urban environment that gave it less of a feeling of being a get-together (albeit an enjoyable one) and more of a sense of purpose. What did other attendees feel? Although there are no official awards from the Conference I like to put together my own list of accolades. 

In no particular order then…

If you get one of these in the post, now you know why.

Stat Of The Week

The now-familiar phrase that every 100,000 homes built will add 1% to GDP. There is a feeling that the Government "gets" this and wants to support more house-building as a driver of economic growth.

Realisation Of The Week

We are now "part of the construction industry". When I started work in the 70s, housing associations were a "movement". Then they became a sector in the 90s. Now our transition takes us to be part of an "industry". I wonder how our be-sandled, knit-your-own-yoghurt predecessors would feel about that?

The Grant Shapps Award For Insight Into The Housing Industry

Shapps gave a customarily strong performance and the most intriguing moment of his appearance was when his government was attacked for demonising social housing and impoverishing tenants; whereupon half the CIH audience applauded loudly. When Shapps gave a robust explanation of why his policies were right, he was applauded loudly by half the audience. The only conclusion is that the housing world is more divided than we might think about the rights and wrongs of this government’s approach.

Most Helpful Comment

Sir Bob Kerslake’s observation that housing associations wanting to pursue new approaches should be alive to the risks, but could "proceed until apprehended”. To me this looks like a new licence to do the things that make good business to house the nation.

Quote Of The Week

Jon Snow – “How come we can organise an Olympic games in Britain, but we can't organise how we house our population?” A pertinent, and timely, comment.

Best Newcomer

Grainne Long the new CEO of the CIH. A good speech to bring it all to a close; challenging to the Minister in public and private. My hunch is that the incumbent Minister may not be there next year, although I should add that this is based solely on observing his body language, rather than anything he actually said. That said, given the rate of change in housing currently it makes predictions of any kind particularly difficult – let’s wait until Manchester (hopefully) 2013 and see…

The New Regulation And Your Organisation

Later on today I’m on the CIH Conference platform (follow along at #housing2012) talking about the new regulatory environment and the potential impact that it has on housing associations and I thought I’d post my thoughts about this topic too. The only condition of putting this blog out now is that if you’re reading this and coming along to the conference later then you have to promise not to shout out the ending, no one likes spoilers.

The new regulatory environment is the latest in a long line of changes faced by housing associations. From the recent past, the twin impacts of the collapse of Lehman Brothers in 2008 and the budget statement in November 2010 changed our finances and challenged some association’s business models. And when I say challenge I don’t mean solely that it’s going to be a tough period, I mean that maybe some housing associations will find that the Mayan prophecies for 2012 relate directly to them.  

In the near future lies the further challenge of Welfare Reform but right now it’s the approach of the Regulator to those who find those twin challenges difficult that is playing out. Those attending the conference will be hearing from Julian Ashby about how the Regulator views risk in the sector and that promises to be a revealing listen.

As I think about the massive changes we face, three particular items suggest themselves. First there’s a “new normal”. Our new operating environment looks like it’s here to stay and we must accept that. Innovation and invention are the new competitive advantage, but the regulatory risk of getting those things wrong has become tougher. Secondly, this is a time when new skills are needed. Boards, executives and staff need to be equipped with abilities and – perhaps most importantly – new attitudes that allow them to operate in this new world. Finally, there’s a new (or perhaps a renewed) understanding that questions of value for money are essential. This is the biggest challenge because our organisations need to know the most effective ways of spending to add value, which is rarely a straight-forward decision.

So in this brave but challenging new world – how do you prepare? As I see it there are three steps to take:

1)      Review your approach to risk – Do you have a formal statement on risk appetite? Do you know how you will assess risk against reward? Do you have clear processes to identify and address potentially risky activity – always remembering that doing nothing can often be the most risky approach? And wherever you are in the organisation, is risk management everyone’s everyday job, or just that of the Audit Committee once a year?

2)      Know your competitors – Remembering that those competitors now include for-profit providers with a different rationale for entering this market than the traditional housing associations that we have normally “benchmarked” ourselves against.

3)      Secure your cash-flow – The ultimate no-brainer, but are you really sure that your cash will hold up in the immediate future and in the longer term? And if you aren’t sure about your cash-flow, are you sure that you can flex your aspirations to ensure you don’t get over-committed. As we all know you certainly can’t afford to get a V3 or a V4 rating from the Regulator.

At the same time, the relationship between housing association and customer continues to evolve at a rate of knots. At Trafford Housing Trust we’ve undertaken three initiatives in the last 12 months to see that what we do is more relevant and more accountable to our tenants and stakeholders.

Firstly, we’ve consulted widely about what we should provide and at what cost. This has given us a new approach to budgeting, where consumer choice on the “basket” of services (and the standards they are provided to) drive resource allocation. So last year we asked our customers what services they really valued and they told us Repairs and Tenant Involvement – so we have allocated additional resources to enable these to reach the level of “the best of the best.”

Secondly, we have issued “The Promise” which is a transparent and solid understanding of what tenants and stakeholders should and could expect from us and to which we can be held to account. This paves the way for the third initiative which is our publicly available “Trading Statement” which reveals exactly how we’re doing and is one of the documents reported to our Scrutiny Panels. And with these three initiatives now underway, we are looking to take this accountability work one stage further and to declare a “community dividend”  - a sum to be used to further tenant and community aspirations for their neighbourhoods.

My feeling is that we are now at a point where we need to take responsibility for our own businesses. Not that this wasn’t true before, but never again should we let the answer to the question, “What would the regulator want us to do?” be the determining factor in what we choose. Instead we must develop a greater understanding of our customers and the risks and opportunities presented by the markets we operate in; we must be clear about the trade-offs between the costs and benefits of alternative courses of action, we must define our purpose in terms that our customers and stakeholders would expect; and finally we must stand up and be counted for delivering it.

My Top Three Essential Gadgets

I’ve been thinking a lot about technology recently. This has been inspired by my reluctant acceptance that the great BlackBerry renaissance is not going to come. There will be no killer app, or new software update that rescues the once-great gadget from the doldrums. So it was with a heavy heart that I accepted the inevitable switch to the iPhone. To be fair this sadness was ameliorated by the fact that the iPhone is really rather great and does things that the BlackBerry could only dream of – crazy things like looking at something on the internet.

Inspired by this I’ve been trying to think of the three essential pieces of equipment and gadgetry that I couldn’t live without and after much gnashing of teeth I think I’ve got it narrowed down.
In no particular order then…

GADGET #1 – THE SMARTPHONE

The trade off when you start using a smartphone is to accept that it doesn’t do any of the individual tasks better than a dedicated machine – you’d still pick up a phone to call someone by choice, but it does more or less everything you need pretty well. Email, web, texts, calls – all handled by one device – that’s amazing. Then you factor in that with apps you can watch SkyGo and take pictures and video and the whole thing fits in your pocket. That’s really quite an incredible device that it feels like we're already starting to take for granted.

So I’m officially a convert to the iPhone and have even got an iPad coming. But the one thing that I have to accept is that they are delicate. I’ll retain some dignity by omitting to say how I smashed the back of my iPhone but it taught me to accept that it will almost certainly break and that if a smartphone is an essential gadget then that’s probably only with the addition of some sort of Kevlar-based case.

GADGET #2 – THE KETTLE

From high-tech to low-tech. Yes, the simple machine that raises the temperature of water to 100 oC and not a lot else, makes it into my top three. Why? Well, this is more for my day-to-day functioning than anything else. To say that I have a caffeine addiction is perhaps an over-statement but it has been said that at certain points of the day that I’m more espresso than man. I’ve always drunk coffee and frankly it can’t be strong enough. In a normal-sized mug I’ll have one and a half tablespoons of instant coffee. The true test of whether it’s strong enough is that if it’s a white mug, if you tilt the mug (away from you, I hasten to add) then the top of the coffee shouldn’t be transparent.

At home I’ve got a Miele built-in espresso maker and when I get up in the morning it's an act of magic to press a button and get freshly ground coffee delivered to you. I usually have what you’d describe as four single espressos before I leave the house, then I have at least four mugs of coffee during the day. The caffeine consumption stops when I leave work and I never touch the stuff in the evenings but I dread to think of a de-caffeinated existence. How do people do it?

GADGET #3 – THE CAR

Again, not something that you would necessarily characterise as a gadget, but it’s certainly a machine born of technology and it’s essential in so many ways to me that I thought I’d include it. Clearly, the car has a practical value in that it allows me to travel to and from work. This is especially important for me because I need to see the sea, I get jaded very quickly if I’m denied access to the sea so being able to commute into Sale is essential.

So why a car, why not the train? Well, on the few occasions I’ve got the train in I’ve found that the absolute lack of anything to do means that I’m not able to access that level of meditation that you need to do some really productive thinking. Whilst you have to concentrate when you’re driving, it only really requires a basic level of processing. It was the same when I used to spin. The act of doing something simple seems to enable me to concentrate more and I find my most valuable thinking time is when I’m driving.

So there it is – the three bits of technology that help me to exist – what about you? What three pieces of gadgetry or technology couldn’t you live without?