The Effects of Business Planning, Financial Management and Performance Monitoring on the Social Housing Sector

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The Effects of Business Planning, Financial Management and Performance Monitoring on the Social Housing Sector

Precious Orlu.

Student Reference No

Course: Housing Policy Town 1017
Lecturers: Maureen Rhoden, John O’Leary
31st March 2010

Heraclitus (535bc-475bc) was a philosopher who believed in the power of change, claiming that everything would find repose by changing (Harris, 1994). This may not be true to the average sense of the concept of housing as a basic need to mankind. Housing has and will always be a constant, essential need and a basic right for every human being (United Nations Universal Declaration of Human Rights Article 25, However, this paper may agree with him on the existence of uncertain changes in the political, social and economic states of countries at various times and how these changes affect housing policies. This essay shall examine the impact of these changes on housing businesses with the social housing sector as the area of interest. It will identify these uncertain changes as risks to the business of social housing and ultimately discover if business planning, financial management and performance monitoring are important to the productivity of the social housing sector.

(Balchin and Rhoden, 1998) claim that housing is most times the largest and most expensive acquirable item. Next to agriculture, it usually requires the most use of land space. The only need that precedes housing in mankind’s scale of necessities is food. Otherwise, housing needs consume the most land space, thus making this need an expensive and enterprising one with governments and private individuals investing heavily in businesses related to supplying such needs to people. (Ogu and Ogbuozobe, 2001), classified this supply process in their theory that two paradigms are present in social housing provision in Nigeria. They referred to them as the “provider” and the “enabling” (supporter) paradigms. But claim also, that most governments in developing countries lack the financial strength to run the “provider” paradigm scheme. Hence they adopt the “enabler” strategy which was encouraged by the City Summit (Habitat II) held in 1996. (Reeves, 2005) elaborates these theories as he defines social housing bodies in the United Kingdom as primarily local authorities and housing associations which provide and manage houses even after tenant occupation, regardless of ownership. He states that they could be direct providers (e.g. a housing association develops and manages a property), or enablers (e.g. a local authority, indirectly houses tenants by funding another body like a housing association by grants to build houses). This explanation is similar to Ogu and Ogbuozobe’s paradigms mentioned above. He concludes however, that the largest enabler in any country is the government (e.g. housing corporations and local authorities). (Lansley, 1979) had also stated years ago that housing corporations support social housing authorities with exchequer grants as they are primarily non-profit making organisations. This characteristic differentiates them from the primarily profit oriented nature of private enterprises. According to (Nyssens, 2006), Social Enterprises started in the late 1970s as an approach to tackle social needs collectively without the desire for individual profit. It is an alternative to conventional co-operative societies which functions in a manner that it assists low income earners tackle social exclusion (in this case, through provision of affordable housing). Because they are indigenously organised by a group of citizens, participatory and non profit oriented in nature allowing equality in decision making (not based on capital ownership), they have been proactively accepted by the local tenants and the government as housing service providers. (Paton, 2003) agrees that Social Enterprises have had positive impact on the social housing sector, but he also shows...
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