HACT's Head of Communities, Barry Malki, takes a look at financial capability in social housing.
Financial Capability and Financial Inclusion have been on the agenda for Social Housing organisations since time immemorial, and this has seen a sharp escalation in recent years with the introduction of welfare reforms such as Universal Credit and Benefit Caps. With a large percentage of Housing Association income deriving from Housing Benefit, it is natural that these reforms have been a concern in the sector.
Historically, certainly in my experience, Financial Inclusion work has been administered in an ad-hoc manner, delivered at a time of crisis for a resident, and often not part of an overall strategic plan. With the concerns over the business implications of Welfare Reform, this work has become more and more aligned with core priorities; but there is still a way to go before we understand the costs of not doing it.
I recently had a conversation with the Income Manager of a large HA in London to find out more about their process; I was particularly interested in how they identified “at risk” residents, and how they then supported those residents to avoid hitting that crisis point. I was genuinely amazed to discover that the process only began when the resident was at around four-weeks rent arrears, at which stage there began a month-long progression towards the potential eviction of the resident. As this process started, the resident would be referred to an internal Tenancy Sustainment worker, who would then refer the resident to an appropriate support agency, provided an agency had been contracted to work in that location. This is basically the equivalent of waiting for someone to fall from a tightrope before asking someone else to go and call a local safety-net erector.
My personal opinion is that this approach is flawed for a number of key reasons;
That the cost of eviction is generally several magnitudes greater than the amount of arrears
That the cost of eviction is to an even greater degree more than the cost of supporting the resident before the crisis point is reached
That there are two internal agencies effectively working in an adversarial way, with the Tenancy Sustainment Officers working against a timeframe being set by Income Officers in the same business
That there is a middle step between the Income Officers and the support agencies; it may make more financial sense for the Income Officer to make a referral to an external agency directly
I understand that it is essential for HAs to enforce arrears, as rental income is the primary source of revenue for the business, but I believe that there must be a better approach that benefits the resident, the business and the wider community. As well as the business cost of evicting a resident, and the enormous impact on the wellbeing of that resident, there is also a considerable social implication, as the net result of this action will displace the responsibility onto another stakeholder (Local Authority, NHS etc).
I was interested to read about A2Dominon’s DO$H programme, as it is prioritising a number of elements that I believe are often missing from HA led Financial Capability programmes. The project, which was funded by the Money Advice Service, has three distinct strands;
Mentoring – providing in-house direct support for residents
Tech solution – developing an app to provide remote support to residents
Evaluation and Sharing – a commitment to sharing the learnings of the project with other organisations.
One of the recurring themes of the programme is to evidence the benefits of prevention, over enforcement; which I think is an essential step forward in the realm of this kind of work. If there is a robust enough evidence base for HAs to learn from, then we could witness a shift from the crisis-stage interventions that we see now. There will be a greater desire to use data to identify “at risk” residents, rather than simply waiting to see who falls.
There is also a focus on the wider Wellbeing of a person, and the reciprocal relationship this has with financial hardship. Many of the residents being engaged by the Mentors have multiple and complex needs, and this has negatively impacted on their personal wellbeing. Often, the situation seems to have been exacerbated by a shift in the resident’s wellbeing in the first place. The Mentors have reported that confidence and health levels improve dramatically as people become more financially capable. For anyone familiar with the UK Social Value Bank figures, it is worth noting that for someone over 50, outside of London, experiencing “relief from being heavily burdened with debt” the Wellbeing value is approximately the same as that person going from unemployment into a full-time job, or going from sleeping rough to being placed in temporary accommodation.
As well as the direct support delivered by the Mentors, the project has also developed an App called Ask David. The App has a lot of useful links and resources for residents, and critically, the functionality for people to engage with online Mentors. I think this is an exciting development as it opens up the capacity of the project to a much wider set of service users; at the same time reducing business costs of an organisation with homes across a wide geographical area. Having worked in an organisation with a similar spread, there are often balances to be struck over the viability of priority areas for Investment and the logistical implications those areas present. The App development is a potentially useful solution for engaging those who may otherwise miss out.
The project team at A2Dominion have partnered with Brunel University to provide a thorough, impartial analysis and exploration of the work, to determine the benefits delivered both to the resident, and to the organisation. This level of rigorous evaluation, will give a great deal of intelligence to the sector, and may help other organisations to review and streamline their processes accordingly.
The programme is currently about halfway through its first iteration, with evaluation activity already underway by researchers from Brunel. My hope is that the findings of this project do demonstrate that the theme of “prevention over enforcement” is borne out, and we can see a channel shift in how the sector approaches financial hardship; and start to focus on data that can identify those who are likely to hit a crisis, before it happens.
For more information about A2Dominion’s DO$H Programme, you can contact them: Dele.Ryder@a2dominion.co.uk