This paper seeks to make a contribution to the debate about competition in social housing provision in Europe (Elsinga et al 2006, Oxley et al 2007,) by considering a recent reform in procurement of new social housing in England intended to expose non-profit providers to direct competition from the private sector. While this reform, introduced by the Housing Act 2004, is still at a relatively early stage of implementation, some issues arising from this attempt to create a mixed economy of production of social housing are already evident (Campbell Tickell, 2006). This paper draws on some concepts from the literature on network governance (Kickert et al 1997, Koppenjan and Klijn 2004) and organisational economics (Nygaard et al 2007 add further references) to theorise these changes and uses some preliminary interviews with some of the actors involved to assess the significance and likely impacts of this reform.
As a result of two decades of reform across Europe the role of social housing has been both diminished and transformed (Primeus et al 1999). Part of this transformation has involved changes to the nature and mode of operation of social landlords which have become more commercial and market orientated and more focused on financial and asset management (Gruis and Nieboer, 2004, Gruis and C 2007). Another aspect has been the creation of mixed economy or unitary markets (Kemeny 1992, 1995) in which non-profit providers co-exist with profit distributing landlords (Elsinga et al 2005). While there have been very distinctive national paths in the allocation of responsibility for social housing provision between state, non-profit and market sectors the tendency for mixed economy markets is increasing.
Indeed some of the more fundamental challenges to social housing organisations have come from pressures to create ‘a level playing field’ between non profit and market providers principally in relation to the involvement of social landlords in the provision of ‘market housing’ (Elsinga et al 2006, Gruis and Primeus 2006). In the case under study this process is reversed with market entry by the private sector being stimulated by a more minimal form of regulation (based on contract) whilst existing housing association players remain subject to more comprehensive regulation; a dualism which has been seen as ‘not sustainable in the longer term’ (Campbell/Tickell 2006 p. 5).
Discussions of inter-organisational relationships in mixed economy markets has tended to be conducted around rather abstract notions of competition but recent contributions have begun to unpack competition into components such as rivalry, risk and substitutability (Oxley et al 2007). This work begins to make some important links between economic frameworks and actor motivations, perceptions and behaviour. For example Oxley et al note that for competition prescriptions to work ‘SHOs do need to see themselves as rivals and be motivated by improving their share of the market’ (2007 p. 8). This focus on perceptions and motivations is important because it indicates a recognition that markets are socially constructed and that how institutions act depends on both formal and informal rules and the understandings that actors bring to inform their action. In this paper we shall develop this focus on understandings and motivations by drawing on two bodies of theory that we believe have some purchase on these questions.
The paper is divided into four further sections. After briefly outlining the legal and administrative background to market entry by private developers (2) we explore the relevance of concepts from network governance (3) and organisational economics (4). We then discuss the application of the concepts to intepret the results of some preliminary scoping interviews (5). By way of conclusion we discuss how the concepts could be operationalised to inform further research.
