Does the Regulator have anything to say about Housing Technology?

Back in 2017 The Homes and Communities Agency (now the Regulator for Social Housing)(RSH) wrote an important Innovation Plan. This plan considers how the sector might innovate and use the huge potential of technology, and mentions disruptive business models like “Uber and Airbnb” (paragraph 2) show the potential of technology to completely transform established industries. How does the regulator think about using technology to improve services to residents, or to drive down costs?

The regulatory standards for social housing are outcomes based. This should allow registered providers to adopt any of the new technologies… without hindrance from the social housing regulator…. Many providers commented that the regulatory framework allowed them to adopt new technologies freely and that no changes to the current framework were needed

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In other words, the regulator is not going to be prescriptive. Many HAs want to improve, and understand they need to innovate. They know there is plenty of technology available which could help HAs provide a better service. But while there is no bar to introducing new technology, there is no guidance or expectation either.

Providers expressed concern that investment in new technologies may have a negative effect on how the regulator views their VFM or risk management position…. The regulator’s Value for Money standard emphasises that providers should seek on-going improvements in efficiency and effectiveness, not just short term economies. It therefore provides a framework to incentivise providers to deliver innovative solutions to run their businesses more efficiently.

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Obviously HA respondents expressed their anxiety that spending a lot of money on new technology is a seriously risky business. Buying a major new IT system – for housing management and maintenance, finance or corporate services, for example – is a huge outgoing for many HAs. The cost of implementing it can be frightening. There are dozens of options and few of them are rated by the people who use them. For many leaders it is often easier to kick the can down the road, making do with what they have got. In fact most only renew systems when suppliers decommission them.

Those who take the plunge will produce a business case explaining the advantages of the new system and the expected savings, these are rarely tracked at Board level. Frequently a new system will not deliver the hoped-for improvements, nor the scale of savings promised. If there is an honest evaluation at the end it will usually express frustration and disappointment. The customer-facing staff invariably feel disenchanted that the promised improvements did not materialise, and devise all sorts of creative work-arounds.

The sector is crying out for some guidance and help here. Nevertheless the regulator focuses on value for money because it has an answer – it is down to the HA to show that significant expenditure on new systems delivers efficiency advantage.

A number… suggested that there was a role for the regulator in sharing good practice in relation to adoption of innovative technologies and promoting a culture of innovation more generally. However, the regulator no longer has a good practice role in relation to any aspect of the sector. Providers can seek good practice advice from other available sources. We believe it is right and in line with our fundamental objectives, that the regulator remains neutral on adoption of innovative technologies and leaves providers to make choices based on what is right for them.

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Most HA Directors tackle a major change once every decade or so, and only when they feel they have no choice. Deciding to spend many millions of pounds on a new, untested system is scary. It is usually better not to venture into the unknown than to lose your job or reputation. The government itself has proved how challenging a big IT projects can be. It seems to go more wrong than right – for example the National Programme for IT in the NHS, Universal Credit, the Child Support Agency and several others. Where can an HA CEO, Finance or Operations Director get help on the difficult task of specifying the right system, finding a range of competent suppliers and checking that the product will work? According to the Regulator, an HA can look for advice from “other available sources”. This boils down to their peers (other similar HAs), auditors and consultancy firms (which may or not know more than you do).

Nevertheless, even with some advice, the intensive job of specifying and selecting the right IT partner is very difficult. Those of us with experience, commitment, a good budget and competent teams struggle to do this well. Those who are inexperienced, in a rush or lack resources will fail. Isn’t there a case for the regulator, which is paid for by HAs as well as the taxpayer, to share their learnings? After all they regularly visit, assess and investigate HAs. They may no longer have a fund for “good practise” reports but every day they are judging and evaluating what works and what does not, what improves things for residents, and what is a complete waste of money. Surely they could identify which HAs are doing something well and share that with the sector? Furthermore they could facilitate partnerships and collaborative learning for HAs going through “the Change” so they might learn from one another in a more systematic way.

Uber and Airbnb are inspirational, and it is positive that the Regulator can envisage sector disruption. Many of us know HAs could be a lot better and some of us can imagine how this might look. Our HA model of housing management and maintenance has endured for over 100 years, but it is very labour intensive (AI could help) and data remains a significant issue.

Industrial-scale disruption is expensive. At the early stage, Uber raised $412.5m just to build its platform. Airbnb had to find $120m to build theirs (data from Crunchbase). The NHS or a government department could theoretically find these kind of amounts but they are well beyond the reach of an HA. Perhaps, if the HA sector worked together it could conceivably design an Uber or Airbnb. In fact this very exciting idea is something the Regulator and the Department of levelling up, housing and communities, could even lead. Could HAs work together to think big and disrupt themselves? If there was a will there would be a way.

If the government and its agencies don’t think it is important for the HA sector to modernise, serve residents much better, or invest in automation, AI and great systems then perhaps those who lead the sector – the National Housing Federation or the Chartered Institute of Housing – could step up? Never has so much money been spent, by so many, with such lacklustre results. Just imagine what might happen if HAs shared their resources, skills, knowledge and expertise! It is quite clear to me that without much greater collaboration HAs will not be able to produce the kind of gains that the have been achieved by Uber, Amazon or Airbnb,