Dear Social Housing Sector,
Two members of Gabriel Star were fortunate enough to attend the Tenant Management Forum at Old Trafford recently. After standing in awe at the beautiful stadium and sipping coffee, the forum’s attention turned to sharing ideas and discussing best practice for managing interactions with tenants.
Speakers formed a procession to stand and guide us through their recent innovations. It was intriguing to hear and later discuss the use of profiling when accepting nominations.
Profiling is nothing new to society. Your car insurance company clearly profiles you before every quote, using statistics to maximise their profits while reducing the extremities of risk. Now, it appears, housing associations are doing it en-masse. The ever-increasing need to show value for money and drive down bad debts means income teams are actively selecting future residents that fit a profile they believe is sufficiently safe enough to house.
However, as with children bobbing for apples on Guy Fawkes Night, those at the front of the queue tossing bad apples back into the water leave those behind them with a higher chance of selecting a rotten one.
My question to the housing sector is: with many housing associations tossing residents back, who, if anyone, will house them?
It must be said that as data analysts, we get ‘it’. We really do. In some cases we’ve seen residents placed in homes they’d clearly struggle to afford or some cases where extra care was clearly needed. However, it doesn’t change the principles that the social housing sector was built on; every man, woman and child in the UK is entitled to shelter.
It’s not a huge mental leap to picture those being tossed back by housing associations finding themselves in a continuous cycle of emergency accommodation, bed and breakfasts or even Travelodge’s. This can’t be right, can it?
It may appear blunt and crude, but it appears apt that housing providers willing to house tenants with high-risk profiles are remunerated appropriately for such efforts. In the same way that statisticians can calculate the difference in value between one insurance product and another, we as a sector can determine the value between one resident’s profile and another’s. We therefore should be re-directing our efforts ahead of time, towards local and central government.
We should rightly and justifiably differentiate between types of tenants. We already do when it comes to ‘need’. Families with immediate and acute need are afforded a larger budget for emergency housing. What we should lobby government for is to acknowledge the varying degrees of risk between tenants.
We have teamed up with Capital Resolve to offer the only former-tenant arrears collection service that is solely focused on the social housing sector. As the service combines both trace and collection with useful analytical feedback, we can say that over a large population, tenants who pay by direct debit are worth £715 more per year to a housing provider than those who only have the ability to pay by cash.
With enough lobbying and sufficient empirical evidence through obtaining quality data, we must believe we have a right to ask for some, if not all, of this shortfall in value to be subsidised to those housing associations who help the most vulnerable.
Join us in asking for this problem to be solved in advance, before the effects become disastrously acute. Lobby now.
Daniel Murphy is a financial modeller for the Gabriel Star consultancy.