The Economic Impact of Housing Organisations on the North

1. The Economic Impact of Housing Organisations on the North HSA Value of Housing conference: Wednesday 16thApril 2014 Ian Wilson Centre for Regional Economic and Social Research Sheffield Hallam University

2. In this presentation... • introduce the study • activities of social housing organisations • the economic impact of social housing organisations on the North • factors influencing size of economic impact • consider Welfare Reforms and their affect on economic impact

3. Introducing the Study

4. The Study • economic impact of social housing organisations on the North in 2011/12: • encompass 'day to day' activities • key metrics: expenditure, GVA & employment • direct and 'in-direct' impacts • why important… • responds to requests to demonstrate impact • underpin case for housing • add to evidence base • baseline against which to assess change • funded by NHC plus 7 case study organisations

5. Evidence base: Survey of Northern Housing Organisations • to provide a comprehensive evidence base • sent to 121 organisations each managing c1,000+ properties • includes Housing Associations (HAs), Arms Length Management Organisations ( ALMOs) and councils • 58 responses: c54% of total turnover • questions covered: stock, building, employment, income, expenditure and neighbourhood investment

6. A (very quick) overview of social housing organisations activities

7. Core functions which provide economic impact • Managing properties: • just under 1,198,000 dwellings managed • Building: • 8,400 new build completions • 58 responding had 3,100 dwellings in development • Community investment: • remit covers more than just housing: 'want to do it & business case' • links with key Government policy agendas

8. The Economic Impact of Housing Organisation on the North

9. Output expenditure • £5,005 million output expenditure into local economies • in addition every £1 spent generates a further £1.05 in the supply chain... • ...therefore social housing organisations support £10,269 million total output expenditure

10. Gross Value Added • produce an estimated £1,699 million in Gross Value Added (GVA) • this is approximately 0.6 per cent of total Northern GVA • including indirect GVA social housing organisations support £4,646 million: 1.4 per cent of total.

11. Employment • employ 46,200 employees at workplaces within 3 Northern regions • that working in 'manufacture of motor vehicles' and 'call centres' combined • 41,600 FTE employees work within 3 Northern regions • plus for every FTE directly employed a further 1.8 FTE are indirectly supported: 116,900 FTEs in total

12. Economic Impact on the North: summary

13. Factors influencing size of economic impact • Income: gross expenditures • Procurement: regional sourcing • Composition of expenditure: multiplier effect

14. Income Total 'income' was £6,499 million, of which:

15. Procurement • Gross expenditure was £6,940 million of which £5,005 million - 72 per cent - was sourced locally • recognise responsibility to local communities and potential opportunities afforded to deliver economic, social and environmental objectives • e.g's of procurement policies and practices: • panels which include many local suppliers • assist local SMEs to meet criteria to get onto panels • social contracts: e.g. take on apprentices • buying power to influence suppliers

16. Composition of expenditure (1) • how organisations spend their money affects the size of the multiplier effect (indirect impact) • construction, major repairs, refurbishment = largereffect • financial and business services, transport/post/ telecommunications and labour costs = lower effect

17. Composition of expenditure (2)

18. Welfare Reforms: potential affects on economic impact

19. Welfare Reforms: potential affects on economic impact • Removal of Spare Room Subsidy/Bedroom Tax • HB paid based on 'need' = reduced entitlement for c240k, who collectively faced £168 million shortfall • impact unclear: evidence increased arrears & collection costs, but not as bad as first thought... • Direct Payments • housing benefit paid directly to tenant within Universal Credit • impact unclear: increase in arrears for previously low risk tenants; DPDP DWP figures show 94 per cent rent collected (14 payments) • Benefit Cap • cap on total benefits • impact unclear: 'fewer' tenants affected, but those who are arguably least able to deal with a shortfall

20. Welfare Reforms: potential affects on economic impact • Income: increased arrears = reduced income • Composition of expenditure: • increased rental collection, management, financial awareness ... associated with a smaller multiplier effect • how is this achieved?... less work on high multiplier activities such as construction and major repair works? • Procurement: likely impact limited; plus e.g. Public Services (Social Value) Act & Localism Act give more weight to local purchasing = less leakage

21. Summary

22. Summary • housing organisations are an important component of local economies • total impact (direct and indirect) on the North: • output: £10,269 million • GVA: £4,646 million • 116,900 FTE employees • housing organisations are faced with considerable 'challenges' which could diminish impact • important to consider how decisions affect: income, procurement and composition of expenditure

23. Thank you Reports and video available at: http://www.northern-consortium.org.uk/economy Ian Wilson: • i.wilson@shu.ac.uk • 0114 225 3539