Local authority, housing association or community mutuals – how do they compare?

Posted: 29th December 2013

Local authority, housing association or community mutuals – how do they compare?

The Welsh Co-operative and Mutuals Commission was established to make recommendations to Welsh Government on growing and developing the co-operative and mutual economy in Wales, to create jobs and wealth.

Altair was commissioned to compare how Welsh local authorities, housing associations and community mutuals deliver public services. Housing was seen as a good case study area as there are a range of delivery models, including community mutuals, for the provision of social housing services. The brief for the research was to examine and compare the experiences in the social housing sector in relation to:

  • Public Service Values
  • Fair Allocation of Resources
  • Financial Sustainability
  • Fair Employee Terms and Conditions.

We held interviews with staff, tenants and union representatives from eleven organisations (four local authorities, four housing associations and three mutuals) to find out their views on the above areas.

Our research found that housing associations and housing community mutuals were more likely to be aware of and demonstrate adherence to public service values than local authorities’ own housing departments – where public service values were implicit. They were no more likely to outsource service provision than local authorities, and indeed some had returned externally procured services to in-house provision.

The research also demonstrated that the risks of housing associations or community mutuals going out of business or of assets being transferred to the private sector was very low.

Mutualisation had not damaged employee benefits. Most recently formed housing associations and community mutuals had retained local authority terms and conditions – with direct transfers from the public sector TUPE will apply.

Where organisations had adopted other rewards schemes, employees had received higher salary increases than those on NJC terms, received other benefits and were less at risk of cuts to staffing than those in local authorities.
The full findings of the Altair research Different structures for delivering public services using social housing as a case study area can be downloaded here.

The Commission’s report makes interesting reading. Their overall findings were that co-operatives and mutuals can create jobs, improve educational attainment, provide social care in people’s homes and reduce inequality. They also had some interesting comments to make on governance. I quote:

“It can be convincingly argued that what links the global failure of the banking sector in 2007/08, including the recent problems of the Co-operative Bank, with local failures in services in the public and third sectors in Wales is a lack of effective accountability and transparency in decision making, which in turn reflect serious failures in corporate governance.

The Commission believes that effective governance is not an add-on, or part of a tick box process but central to the healthy functioning of a sustainable organisation. Governance goes to the heart of the co-operative and mutual movement; as their very raison d’etre is being organisations based on collective membership and ownership.”

The Commission’s report can be downloaded.

Judith Wayne, Altair Director, was the author of the report Different structures for delivering public services using social housing as a case study area. She can be contacted on 07880 606067 or by email, judy.wayne@altairltd.co.uk

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