Interview with David Orr, Chief Executive of the National Housing Federation
Looking back on a 35-year career working with and for housing organisations, David Orr is a passionate advocate for the industry. We spoke to him as his 13 years as Chief Executive of the National Housing Federation draw to a close ahead of his planned retirement in September 2018. He talks openly about the ways in which housing associations need to embrace open communication and more collaborative working to remain relevant and successful in the modern world. He also highlights why he is positive that the sector faces a bright future despite the constant ebb and flow of the UK’s political and economic climate.
As your time as Chief Executive of the National Housing Federation draws to a close, what would you describe as your biggest achievements during your period at the helm? Is there any unfinished business you regret having to leave behind?
As I look ahead to my departure, I can honestly say that I believe housing associations continue to be a force for good right across the UK. They do things that no other organisations do in the same combination.
There is a degree of depth behind what they now do. They have contributed levels of investment to ensure that fragile neighbourhoods become stronger and more resilient, something that few other people or organisations have the ability, capacity or wish to do. I think that now, broadly speaking, we are facing in the same direction with government on housing policy and that we have real opportunities for the future.
More specifically, there have been two central themes that have run throughout the work I have done here. The first is that I have helped to construct a narrative about housing and housing associations, which has kept everyone together. It is a narrative that everyone has bought into and believes and understands. All our members feel that they are part of our story, from the largest to the smallest.
I think this is one of the great success stories for our sector. There is a lot of diversity in terms of provision and approach, ways of working, objectives and challenges. But there is absolutely no doubt that they are all still organisations that care about housing for people on low incomes and that exist, not to enrich shareholders, but for the benefit of the community.
The second theme is about autonomy. Housing associations are at their best when they are able to make their own decisions and drive their own futures. This is something in which I have always believed. To me, that means that real operational and decision-making independence is critical. Throughout my time here I have always argued that the more independence housing associations have the better they will be and I think that all of the evidence now supports that contention. I think we have moved from a position where housing associations were to all intents and purposes captured clients of the state to where we are trusted partners. That is much healthier for us, for government and for the nation.
As to unfinished business, well I am not finished yet, but there are still areas that will not be completed by the time I do leave at the end of September. We still have a housing crisis and we are still building too few homes. I do think that the way we are engaging with the future alongside government and others is much more constructive now and there is a far greater probability of us being able to make a significant increase in the volume of new house building than for decades. We also have a greater opportunity to engage in conversations about regeneration and economic renewal that are equally important in different parts of the country.
“Housing associations are at their best when they are able to make their own decisions and drive their own futures.”
There is one other area I would highlight – the bedroom tax. I believed at the time it was introduced that it was the single worst piece of social policy since the Second World War. I still believe that, and I remain deeply upset that we have not been able to get rid of it. The reason that I think it is so pernicious is that it asked people to do things that were not reasonable and it was specifically targeted on a particular population of people on very low incomes living in perfectly ordinary homes.
I completely understand that governments are always faced with challenges about getting the balance right, both in terms of the amount of money they spend and the legitimate concerns about getting people trapped in the benefit cycle. The bedroom tax, however, was bad policy and should never have been introduced and I am frustrated that it is still there. I am an incurable optimist, and I frankly don’t see any immediate sign around the removal of the bedroom tax. I think it will go because it is bad policy, and eventually that always falls by the wayside.
As you look ahead to the future what advice would you give to those current and future leaders coming into or rising up through the housing sector?
My request of current leaders is that they stay focused on leadership and avoid getting side tracked, for whatever reason, in managing the day-to-day operations. I think it is important that people who are in these leadership positions invest in and focus on that very challenge of leadership; of articulating a future that is better than the present; of having a clear picture of what good looks like in ten years.
Our current and future leaders need to be bold, ambitious, and prepared to take some risks. Their job is fundamentally about owning the future and not just inheriting something from someone else.
Establishing a management culture that trusts people to do the jobs they have been given will ensure a creative learning organisation where talent will flourish.
For potential new leaders who are coming either through this sector or entering it from outside, what I would offer is this: if you want to work somewhere that is incredibly exciting and provides all kinds of challenges; somewhere that will turn your hair grey quicker than anywhere else, but will potentially be the most exciting job you ever do, come to us. The potential really is enormous.
“Our current and future leaders need to be bold, ambitious, and prepared to take some risks.”
Is enough being done to build diversity amongst leadership within the housing sector?
I think the housing sector is very good on some areas of diversity compared to other sectors of the economy, but we could, and want to be doing more. For example, we have definitely improved on gender diversity and LGBT representation in recent years, but I don’t think we are as good as we could be on racial or ethnic diversity.
I do think that the identification of talent available in communities right across the nation is one of the most significant challenges that existing leaders face in our and other sectors. Only with a diverse and talented pool of staff will we crack the future for our organisations.
If the cost of debt increases significantly, how might this impact housing associations and the cross-subsidy model? Are new models required, and if so, how well equipped are housing associations to innovate and take risks on these?
Over the last few years, when it comes to funding models, housing associations have shown that they can think creatively and are open to try different things. Ultimately, I think the challenge for any organisation is to understand the relationship between mission and mechanism.
A mission, the thing that drives the whole organisation, must be held at the core of an organisation. It is the board’s job, more than anything else, to be the guarantor of this mission and to drive it forward. The mechanisms through which the mission is delivered, however, should be flexible. I do see in some instances both in our sector and others, the tendency to believe that the ‘way we do things now’, or the mechanism that is currently being used, is the same as the mission. It is not.
I think what our sector has understood in the last few years is that we have not been able to deliver the volume of social housing that we need in an environment where there has been no money from government to support it. What we have delivered has been achieved through thinking creatively about the mechanisms of delivery. I think that is the key challenge that our sector and others will face in the future. We need to hold on to the mission and the mechanism will change as a result. Cost of money will go up and down, and there will be an ebb and flow of government offering upfront investment, availability of land, and grant funding. This is the reality of how it is now and we need to hold fast to our mission as a result of it.
“Only with a diverse and talented pool of staff will we crack the future for our organisations.”
In what ways and to what extent do you think/hope the sector’s relationship with government, both on a local and national level, might evolve in the years to come?
What I profoundly hope is that there will be a significant growth in structured partnerships between housing associations and government, particularly at local level. The relationship between local authorities and housing associations has been very good in some places and patchy in others.
This has been mainly about colleagues in local government seeing housing associations specifically as delivery agents. We need to get to a position where these two see each other as long term strategic partners. Local government and housing associations are among the very few groups that invest in places and communities for the long term. They are there at the beginning and remain once the communities are built. Both are part of the fabric of place.
In England, devolution and the creation of combined authorities have had a significant and rapid impact on the behaviour of housing associations. Organisations are recognising that they can no longer survive as isolated individuals. Instead, they are developing strategic and combined offerings as housing associations in the regions and take this idea into structured conversations with newly established combined authorities to see how much more can be delivered.
If we can develop proper strategic partnerships, we can combine the strength and range of opportunities that housing associations offer which are complementary to the strength and range of possibilities that local government provides. We need to look beyond just grant funding and view it as a strategic long-term relationship about sharing risk, and as a result delivering more. I do think there is real potential there.
How important do you believe the role of housing associations to be in ensuring positive place-making and sustainable community development at local and national levels? Is this more challenging as some of these providers grow in size and geography?
I do believe that investing in neighbourhoods and community resilience is hugely important. Housing associations understand that there is a mission driven imperative as well as a business imperative to do this. If you are going to be managing and owning assets for 60-100 years, it makes sense for that place to be well managed and looked after.
Some of the biggest housing associations are refocusing on what their neighbourhood offering is. I was talking recently to one of the largest organisations and they were saying that they are reintroducing patches where one member of staff is responsible for 185 tenancies. That is a big investment to ensure a real level of local engagement.
I have always believed that the best organisations, no matter how big they get, will remain successful because they understand properly that high quality service delivery is always small scale and local. If you become separated from that then there are dangers inherent.
I have been around housing associations since 1982, and never in all that time have I seen research evidence that there is a causal relationship between size and quality of service. There are some stunningly good big housing associations and some remarkable small institutions, and in both camps there are those that have some way to go. It is fundamentally not an issue about size.
To what extent do you consider strong, representative governance as a key way of ensuring housing providers are connected with residents?
As housing associations have become more independent the quality of governance has become completely critical. Housing associations have tested all sorts of mechanisms of governance, representative: skills based and tenant inclusion. Ultimately the best people to have on boards are those who understand governance. They need to be able to think strategically and look to the future, need to be able to ask the right questions of the executive and hold them to account.
There is evidence that there are very many residents in housing association homes who absolutely have the skills to do play this role, but asking two residents to represent the views of 30,000 other tenants does not make any sense. We don’t have the systems and structures in place to make that work.
In the past as part of the stock transfer process we have had boards that included representatives from local government. Some of them as individuals were excellent governors, but those who had to run everything past their other party colleagues completely missed the point. That is what representation asks you to do, but it is not what good governance should look like.
Many housing associations exemplify the potential for organisations to balance strong commercial performance with a social purpose: why in your view aren’t housing associations more widely understood?
I realised a few years ago that the answer to this is absolutely crystal clear: the better people get to know housing associations, the more they like them. Housing associations spend the majority of their turnover on community investment and no one knows about it. It is important that we communicate this clearly.
Our members are brilliant at what they do, but they are poor at telling their stories. This is an area we have invested in. We need to tell people about the good that housing associations do before we can expect them to understand. Housing associations need to invest time and energy in telling their own story. This is not an optional extra, it really is business critical. If we are to be the partners of choice for the future, it is much easier to build partnerships with organisations that are already known, admired and trusted than to try and build them with those that aren’t known at all.
Communications is also important in attracting talent. I really believe that housing associations offer an exciting range and variety of jobs working with organisations that make a real difference. This is something that is appealing to the millennial workforce, but if they don’t know anything about housing associations how do they know these great jobs exist. We are missing out on some of the talented people that we don’t know are out there as they don’t know who we are.
Your work with the Federation and in previous organisations, such as Centrepoint, has addressed and worked to tackle homelessness. Do you feel optimistic that a comprehensive and effective response to this challenge can be delivered, and if so, how?
I am completely confident that we can deal with it, and especially street homelessness. I am more optimistic about this than I have been in the last ten years. I think there is a real focus on this and a genuine concern and willingness to do something about it.
Looking back to the early 1990s, there followed a 20-year period where rough sleepers’ initiatives almost removed homelessness from the streets. That came to a complete halt in 2010 when austerity economics and politics came in. We went backwards at speed on this issue.
I am part of the government advisory panel that was set up to look at this, and we do know how to address it. The problem is that it involves spending money, doing it consistently, and doing it over the long term. We need to decide as a nation, one of the wealthiest in the world, that we don’t want to see people sleeping on our streets and that we will invest in it.
It is not just street homelessness though. We are in the very sad situation where 120,000 children in England are presently living in temporary accommodation. This presents another fundamental problem, that for 40 years we haven’t built enough new homes in this country. The obsession with people being owner occupiers, rather than renting as a good form of tenancy has distracted detrimentally on the key issue: we are not building the volume of homes that we desperately need.
There is now a very real opportunity for housing associations to address this. We have in our economy for the first time ever large-scale providers of new homes whose fundamental business model is the delivery of mixed tenure housing. Using their commerciality and understanding of community development, we are building homes not just for sale, but also market ownership, for intermediaries, shared ownership and rent. One housing association can do all of that and it means that we can build quicker, with more certainty and ability to de-risk sites. Over the next few years, this will make a really, really important difference.
And finally, can you give us a glimpse into what is next for you?
I have been involved with housing associations for almost 40 years and am not going to leave it behind entirely. I would not be surprised if I popped up chairing a housing association board somewhere, but at present there are no specific plans.
I would like to have more flexibility in my life. With two young granddaughters and another one on the way I would like to spend more time with them.
I am in the market for interesting projects and will take an opportunity to explore other areas. I am most certainly not retiring from life.
Biography: David Orr
David Orr is the current Chief Executive of the National Housing Federation and a former President of Housing Europe, the European network for Social Housing. He is the Chair of the board of Reall, previously known as Homeless International.
Previously, David has been Chief Executive of the Scottish Federation of Housing Associations and of Newlon Housing Trust, having also worked with Centrepoint.
In 2010 David was given an honorary membership of the CIH, and in 2018 David was awarded a CBE in the Queen’s birthday honours.