Fair Rents (Scotland) Bill or Artificial state manipulation of free market rent?10:34 AM, 6th November 2020
About 4 weeks ago 36
My article this time is more of an open question to which I would like your input. Background first.
I was listening to ‘In Business’ on Radio 4 the other day, a programme about something I had not heard of- the business concept of “Frugal Innovation”, currently much in favour with many huge corporations and even David Cameron.
The idea was first put forward in a book by the late C K Prahalad “The Fortune at the Bottom of the Pyramid”. He took his inspiration from the ingenuity and inventiveness of the Indian rural population in devising solutions to problems in their community when the average wage is 50p a day. Hardly enough to allow them to go around making prototypes and also not a normal market for corporations looking for people to sell to.
Frugal Innovation itself grew out of an Indian concept ‘Jugaad’ which is a Hindi word meaning “To fix-around”, originally used to describe the mad variety of vehicles you see on Indian streets. I’ve been to India twice and it’s my favourite place on earth. You see motorised push bikes adapted to carry bricks or old taxis with elongated chassis that somehow become charabancs. They take what they have around them and turn them into something else they need.
This mechanical flourish also extends to general thinking and innovation in a community strapped for cash. Just like the UK at the moment.
It’s as much a way of thinking as anything else. Flexible and improvisational. Unlike the big top-down corporations, Jugaad thinking can respond very quickly to immediate situations on the ground without having to hold endless meetings or test phases. If something doesn’t work, try something else.
My favourite Jugaad story to illustrate this point concerns the Chinese white goods manufacturer Haier. They made cheap washing machines for rural communities in China. One day an engineer got a call that a farmer’s waste pipe was constantly blocked. When he visited he found that the farmer was using his machine to wash the dirt off of his potatoes and the mud kept blocking the pipe.
Instead of moaning that the guy was an idiot and his warranty invalidated, the engineer asked around the community and found that all the farmers did the same thing, so he called head office who acknowledged that the customer’s needs weren’t the original intention and responded to that. They started putting wider waste pipes on the machines.
This led to the design of new machines that could not only wash clothes and potatoes but also peel potatoes too. Now before you think that is a quaint rural story, bear in mind that because of thinking like this Haier is now threatening to take over the American market of GE and Whirlpool. It’s bottom up stuff.
What has fired me up about Jugaad thinking is my increasing frustration with the government’s policies on housing. Obviously for us lot who work directly in it, by which I mean landlords, tenants, housing advisers etc, we can see the problems face-on and the solutions are often fairly obvious but government, all governments, not just the current lot, will only ever respond with solutions that fit in with their over-arching plan for the country, so politics gets in the way of real work.
Cameron is inspired by Jugaad and is most probably the drive behind the Localism concept, which I am actually in favour of, with overnment getting out of the way and letting real people sort things out.
Localism is to a certain extent laying the ground for more Jugaad thinking and as more councils go down the route of the Social Lettings Agency model we can all expect more improvised and responsive solutions and partnerships being found.
For example, last week I went to meet the manager of my local Credit Union about how we could partner up to find local solutions to housing problems in my borough. He suggested that we could encourage tenants we meet to join the Union, its only £1 and get their LHA paid into their account, which is then ring-fenced so they can’t touch it and a standing order is set up for the rent. These regular payments contribute to re-building credit ratings and take away a landlord’s fears of direct LHA payments, making, theoretically, LHA tenants a possible consideration.
I also had a meeting with a new team set up to run a 2 year pilot to offer hands-on support for people where the whole family is on benefits, not only helping them with financial intelligence but also in getting work.
For my part I am about to run tenant training courses to educate them about rights and responsibilities. This is being done in Harrow council and making tenants more attractive to their local landlords as a result. Off the back of this I have been meeting with a few independent letting agents that we can work with who have agreed to help us promote our tenant prospects in the knowledge that rent is sorted, the tenants trained in responsibilities and ramifications, and the backing of my team in giving free legal advice to landlords and the family team with hands on guidance and mediation.
Talk about frugal innovation. All this cost any of us was an hour of our time to connect up.
My question to you is, thinking freely and with no “Yeah but”s, what solutions would you propose to your most pressing or annoying problems as a landlord or agent? I mean not suggestions that would involve new government laws, it ain’t gonna happen.
Alternatively, are there any Jugaad or partnership solutions that you know of that work well?
The more things we gather together as an online community and then circulate amongst the wider housing community the better chance there is of pulling off some radical solutions.
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