With the ongoing drive towards greater efficiency within the public sector how can social housing providers engage in this process and what are the background factors that are driving this issue forward?

Jacquai Watt feels that the political dimension in Scotland has changed irrevocably since the Scottish Parliament and local elections last year. This has led to 27 of the 32 Scottish local authorities under no single parties overall control as well as the Scottish Government operating without a majority. These political changes have resulted in a greater degree of political cooperation, a greater sense of urgency and a greater clarity of purpose for the operations of local authorities.

Ronnie said that the large number of public sector bodies in Scotland and lower efficiency targets in Scotland, when compared to England, point towards possible areas where savings could be made.
The financial stakes have also been raised by the concordat between the local authorities and the Scottish Government resulting in a declining share of the national budget for local authorities, the removal of ring fencing and funding the council tax freeze. This is all having an effect on public sector funding. Jacqui underlined the importance of the ‘more for less’ agenda within the sector. She said that there was a danger that some housing associations are still under the impression that they do not need to become more efficient.

However, she believe that as the squeeze on HAG rates, coupled with a nine-fold increase in land values since 1998 and a doubling of labour costs in the same period has meant there is a real danger some RSLs may simply abandon developments.

This will have some real impacts for housing associations. HAG is due to be reduced by 10 per cent resulting in an effective £10,000 per unit increase on build costs. This, in turn, requires increased borrowing from the private sector and increased rents for tenants.

She also highlighted the growing importance of partnerships to reduce costs and that merging of services is becoming more prevalent than in the past. Also, that strong leadership is crucial to deliver effective partnerships and subsequent efficiency savings.