By Jane Warnes, Managing Director of Cotman Housing Association
Financial pressures, and changing government policies have put an unprecedented pressure on registered providers to join forces to achieve balance sheet efficiencies. Cue a wave of fear across the sector that merging will end local governance and undermine the commitment to local communities that has been the essence of the housing association movement since Victorian times.
But is this really true?
No merger is without its challenges and risks but there are many benefits and opportunities too. The key to merging successfully starts with the board and agreeing a compelling vision with an open mind. Too often negative perceptions can unnecessarily close the door to merger discussions. Losing control at a local level for example, is an understandable fear as inevitably certain functions will be centralised such as payroll, accounting and treasury management. However, rather than having a negative impact on local management, this can free up considerable time and resources to focus on what matters most - delivering services for local communities and providing affordable housing to tenants.
Some boards also express concern about the impact on tenants with some believing that customers will react negatively to a larger provider believing it could be more impersonal. However, the customer's priority is a secure home and a more reliable service - both of which can be more successfully achieved via a merger.
Once the vision of the merger is agreed, it must be communicated to staff at an early stage. Employees must be engaged in the process and understand the benefits it can bring to them including better career progression and access to shared training. Nominating members of staff to visit and experience how the other company does business is advisable. Encouraging them to share the positive aspects of their visit can be invaluable in cascading positive messages and bringing others on board.
We took the strategic decision to join the Places for People group seven years ago. There was no problem that needed fixing, no elephant in the room -we were in a strong financial position with an enviable local reputation among customers and stakeholders. The move has resulted in many benefits including improved performance, increased stock and more funding, which have all been achieved while remaining committed and close to our local customers. Furthermore, we can access group buying power and capital resulting in considerable cost efficiencies, and offer our customers additional services such as discounted access to leisure services and low cost loans.
We would urge small and medium housing associations to keep an open mind about potential new partnerships. Reject mergers by all means if there is no 'fit' for your organisation. But please don't discount them offhand with sweeping statements about loss of local control and organisational ethos.
Boards should not feel threatened by mergers. Seven years on the Cotman Board remains at the heart of our success, with member commitment to making a difference in East Anglia as strong as ever.
In my view, the time is ripe for boards across the sector to self-assess and honestly consider the benefits that mergers can bring. With the right terms, they can be a win-win for all parties and considerably enrich local offers to the people we exist to serve.
Jane Warnes is the Managing Director of Cotman Housing Association, part of the Places for People group. Jane started work at Cotman in 1992 and was promoted to Managing Director in 2014, 5 years after Cotman joined the group.
This blog was first published by Inside Housing on 10 June 2016.