James Morgan, Lecturer and Director of Studies at IHURER, applauds efficiency in the building of affordable  homes but cautions that there’s also a place for local control and a need for sustainable neighbourhoods.

Housing associations’ positive impact on neighbourhoods has been one of the big success stories of Scottish housing over the last 40 years. Through Housing Action Areas, established from the mid-1970s, committees of local people employing small teams of staff, often working from a vacant flat on the ground floor of a tenement, were the hub of improvement and change for the better. Working with committed architects and design teams, using generous levels of public subsidy to safeguard communities and renew the urban fabric, associations were an expression of the legitimacy of local people’s desire to remain in their homes.

The debt owed to these associations and the vision they embodied goes well beyond housing. In Glasgow, Dundee, Edinburgh and many other towns around the country, we now have attractive Victorian and Edwardian, mixed use, mixed tenure neighbourhoods that are models of high density sustainable living. These are places to be proud of, that stand out above the bland anywhere/nowhere new developments of the 1970s and 1980s which were the all too possible alternative.

This model of development through locally controlled, community based housing associations and co-operatives continued with Community Ownership programmes in peripheral housing estates and in new rural associations, with these organisations acting as more than just landlords but growing as experts and facilitators of community development. It’s perhaps surprising that they haven’t featured more prominently than they do in studies of Asset Based Community Development; nevertheless, the ‘wider role’ activities of housing associations have taken off in areas like working with young people, training and employment.

But how relevant is this legacy in a time when resources are scarce and affordable housing demand outstrips supply? Efficiency is the name of the game and each pound of public money or, come to that, private money, levered in must be spent effectively to meet housing need. Early Housing Action Areas operated with 90% to 100% public subsidy, whereas grant levels are now in the region of £30,000 to £40,000 per unit and private finance scarce and anything but straightforward to procure. The idea of a housing association with half a dozen staff and working from a disused flat trying to access funds from the Bond markets would be frightening and is not credible. Across Britain and Europe, in places like the Netherlands and Germany, housing organisations have become more businesslike in their approach while trying to retain their social ethos, in a process known as hybridisation. In Scotland, as elsewhere, group structures and alliances have developed to bring greater expertise and take advantages of economies of scale.

Against this background, the Devanha procurement initiative in North East Scotland was a brave attempt to mix economies of scale with retention of control by five associations which came together to deliver almost 1,400 new homes. A Heriot-Watt University and AE Consultants  report into the initiative, published by Scottish Government in December 2012 sheds some interesting light on the lessons that can be learnt from this initiative. Although these are not the tiny associations of 40 years ago, having between 900 and 3,000 homes, I call this initiative ‘brave’ because Devanha was unashamedly rooted in the desire of member associations to maintain their independence and control.

Economies of scale allowed Devanha to put together a sufficiently large programme to operate through a framework agreement, giving continuity of work and a collaborative approach where ‘gain share’ and ‘pain share’ between client and contractors was possible. Devanha worked with consultants to innovate in procurement using the NEC3 form of contract which was suited to collaboration and organisational learning but was novel to the member associations. Devanha tried to address a range of objectives, including cost and grant efficiency, quality improvement and an employment and training initiative.

Our report judged Devanha to be only partially successful, significantly failing to achieve the cost efficiencies it sought but performing well in relation to the quality of housing it delivered. At the heart of Devanha’s difficulty was a lack of leadership which flowed from the tension between central and local control. The organisation didn’t appoint a managing director with sufficient power to take key programme decisions and had too complex a governance structure, reflecting a lack of willingness of the member associations to let go.

Devanha could be a prototype of an organisational structure which would work better if member associations acknowledged that once they’d decided to work together, they should give their development vehicle freedom to manage and make decisions. The alternatives, perfectly viable, but arguably involving greater loss of control, are working in alliances with a lead developer, formally merging or joining group structures. Indeed, two Devanha associations are creating a strategic alliance and another has subsequently joined a national association as a group member.

What will housing associations look like in future? There’s certainly no going back to the early days of the housing association movement – associations will continue to get bigger and more professional. To act as developers, they need financial expertise on a scale which was previously unknown: to work their assets for the public good while managing risks to their viability.  They need to make sure spending creates as many affordable homes as possible and this requires them to be expert clients; to understand the implications and opportunities of using different contracts and forms of procurement.

But this businesslike approach should not mean they churn out anonymous, anywhere/nowhere development. Perhaps one more area of expertise should be at the centre of housing association development: an understanding of good urban design. And that must surely include a commitment to the participation of local people in the design of their neighbourhoods – a skill which has been integral to housing association development for 40 years and which should not be lost now.