The housing sector is facing a number of mounting pressures. In 2020, the UK Government’s Social Housing Whitepaper laid out a vision for social housing that will require billions of pounds of investment to address and implement, and the carbon neutral homes initiative is expected to cost the housing sector more than £104bn to deliver. Coupled with this, the pandemic has further increased the economic divide between social housing tenants and the rest of the population, with those living in social housing more likely to have been affected by the end of the Government’s furlough scheme.
With uncertainty over the costs that are facing businesses, there is a more urgent need than ever for housing sector leaders to shape a plan for digital transformation. Digitisation has the potential to help the sector evolve, by streamlining processes to address digital lag, meeting net-zero emissions targets, and developing meaningful collaborations in order to tackle complex problems more efficiently. However, to be successful, everyone has to understand why you are making the changes you committed to and believe in the value that they are going to deliver. A technology strategy must take stock of what we have learned throughout the pandemic, alongside understanding the changing needs of customers and staff. It should also be underpinned by initiatives and tactics that can be scoped, defined and budgeted for.
The opportunity to drive change
As a direct result of a forced change in behaviours through the pandemic, research from McKinsey suggests that the creation of digital or digitally enhanced offerings has sped up with a seven year average increase. Yet, although digital expectations are increasing across most sectors, strategies within the housing sector tend to be born more from efficiency and growth, rather than the drive for innovation and investment. Whilst the housing sector is facing a ‘digital lag’ and has a lot of catching up to do to meet the ever-growing digital expectations seen in other sectors, this also presents a huge opportunity to drive meaningful change, and the chance to tackle environmental and customer-facing problems on a level playing field. This includes addressing key sector-wide challenges such as climate change, collaboration, responding to human needs, creating resilient solutions, and delivering incremental value.
To scale business processes and make them more efficient, operational processes are now becoming more automated, and individuals, both employees and customers, are having to adapt to this change. As we continue to move from a process-driven industrial past towards a future where adaptability and situational awareness are key, digital transformation will require employees that can resolve complexity, upskill to meet advances in technology, and adapt to new models of working.
The journey towards net zero
In June 2019, the UK became the first major economy to lay out in the law, a target to deliver net zero greenhouse gas emissions. Although the UK has seen high levels of investment in the creation of carbon neutral homes since then, there is a need for carbon negative solutions to stretch further over the next ten years to pay back some of the carbon debt that has been amassed. The buzzword is ‘retrofit’, and it is here that innovation and technology need to step up to negate the high costs of retrofitting to 2050 standards. Pilot schemes such as the upgrades in Nottingham and Maldon using the Energiesprong system are being observed with interest. Like any good technical strategy, these initiatives are linked back to the housing association’s business strategy, with income received via the fee for performance paid by the tenant, as well as the expected maintenance and cost saving over the next 30 years, covering the cost of the work.
With the 2050 target of net zero emissions being one of the major challenges facing housing associations, individual businesses have looked to address the problem by not only dividing the cost but by delivering high, ongoing value across the sector. In April 2021, five of the UK’s largest housing associations, including Abri, Anchor, Hanover, Home Group, Hyde Group and Sanctuary Group formed a partnership known as, The Greener Futures Partnership (GFP), to improve the energy efficiency of their 300,000 homes and, together, develop decarbonisation solutions for the sector.
More significantly, they have set out with a bold but potentially sector-redefining goal. Each business in the group has looked to benefit from the financial, technological and energy efficiency gains that collaboration brings and the GFP agrees that meaningful collaborations such as theirs are the way forward. This signals the group’s commitment to “join forces and resources as a sector to support the UK’s shift towards a zero-carbon future, to help the environment and improve the lives of millions of people.”
This is where the opportunity for the housing sector lies: through more meaningful collaboration, complex problems can be tackled efficiently. With the benefits of shared knowledge and pooled experience, the housing sector can prepare for the increasingly challenging problems the future is bound to deliver.
Pursuing resilient technology
The cost of implementing technology can often be prohibitive for an individual organisation. However, there is a tremendous opportunity for the housing sector to use technology to make real improvements to the lives of both tenants and staff. Technology provides the opportunity to deliver value in many ways, including playing a major part in providing tenants with a voice, in making them feel safe, in reporting on landlord performance and spending, in managing complaints, and in helping landlords keep homes in good repair.
When selecting technology as part of a strategy, businesses also need to start planning for the worst and should test solutions against the possible situations that may play out over the next decade. Whilst we don’t know, for example, what hybrid working is going to look like in the long term, we can’t delay in creating technology solutions that recognise the need to deliver working and living conditions that can adapt to new, flexible ways of working. As we design these models, we also need to be asking ourselves, is the technology that we are putting in place adaptable and resilient to deliver against the unpredictability of people’s needs?
Ultimately, successful businesses will be those who are agile enough to work in shifting climates, and flexibility should be built into any digital transformation strategy. The only way to meet the ambitious targets for decarbonisation and housing improvements set out by the government will be for housing associations and landlords to take a holistic look at their technology strategy. Ultimately, this means assessing the money and time needed to create the meaningful change that tenants demand and truly improve the service, safety and comfort of their homes.
