ODPM’s £1.5bn social housing savings ‘impossible to meet’

The social housing sector will not be able to meet the ODPM’s efficiency targets, the Northern Housing Consortium said this week.

Speaking at Housing Today’s 2005 efficiency conference in London last Thursday, Alan Kelley, head of operations at umbrella group the Northern Housing Consortium, said hitting the government’s target would be “impossible” for social housing providers.

The ODPM has called on them to make savings of about £1.5bn by 2007/8.

But Kelley said the sector was already behind schedule. “It will be impossible to do this [make the savings] by 2008. We’re already behind target and the fear is, how will we measure efficiency?

“Will the efficiency gains ever materialise? We have to get our heads around this as there are real problems around measurement.”

Kelley added that, if the efficiency targets were met, doubts would be cast on the veracity of the savings being claimed. He said: “If the figures are achieved, how realistic will they be? It could be a case of double counting.”

Councils are expected to save £6.5bn across all departments by 2008, but Kelley argued that the actual savings made might be well short of this figure.

The £6.5bn target will be missed by £6.4bn if we go on as we have been

Alan Kelley, Northern Housing Consortium

“The £6.5bn savings target will be missed by £6.4bn if we continue as we have been,” he said.

At present, housing associations’ efficiency can be measured by the Housing Corporation’s operating cost index. Councils’ efficiency is assessed in Audit Commission inspections. But there are no figures on how much providers were wasting in the first place, and nothing to stop providers from cutting services and claiming it as an efficiency saving, said Kelley.

Other housing providers said the sector had already demonstrated its ability to meet the target. Barry Quirk, Lewisham council chief executive and the ODPM “efficiency champion”, said: “If we look back at actual budget reductions, we’re already making these savings. The evidence, looking back, is there.”

Des Kelly, policy officer at the National Housing Federation, said: “Some associations are very efficient already and I don’t think the situation is as bad as Alan Kelley is making out. Some have really done a lot of work in the last few years but there is some scope for improvements, particularly in procurement.”

The efficiency conference was sponsored by Genesis Housing Group and Hometrack.