13:39 PM, 10th May 2012, About 10 years ago 48

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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.


by Mary Latham

18:45 PM, 12th May 2012, About 10 years ago

We seem to be having another one of our Saturday Sumits Ben hahahaha If there were more Saturdays in the week I reckon we could have this countries problems solved.

by Ben Reeve-Lewis

19:06 PM, 12th May 2012, About 10 years ago

Yes, where you and I seem to come from Mary is seeing the whole picture, not just landlord’s interests or tenant’s interests. The whole thing joins up. CUs can be central in this.
Being a council worker I am a veteran of 1,000 meetings where nothing at all ever happens. Hot air sessions.  I have become sick and tired of them and now I just get on with finding solutions without asking anyone’s by-your-leave. When it’s done and set up, I’ll tell them, not before.
On empty properties I am currently working with a designer to create a smart phone app, using the community as the eye’s and ears, to identify empty properties that we wouldn’t necessarily know about. They photograph them, send it to the central website. The location is automatically given a GPS location and our empty homes posse can get straight around there and see what can be done.
Another scheme I am trying to tie in with it is to target criminal landlords who refuse to license their HMO – the real bad ones. Hit them with a Rent repayment Order, claw back 12 month’s housing benefit on the property from each tenant, and use the money we make to use as a grant to help bring empty properties back into use.
This way good landlords can see the council is using the bad landlords to pay to help the good ones out, not just fill the council’s coffers.


6:00 AM, 13th May 2012, About 10 years ago

I see your point, so therefore could it be a condition that to take LHA claimant on they have to join a credit union.
As you suggest it would possibly open up many more rental possibilities for LHA tenants once LL know the tenant is with a credit union.
It would definitely encourage me to look at a LHA claimant.
Under the localism act would it not be possible for a council to set up a CU, with the advice to these LHA claimants that it would increase their chances of sourcing private accommodation from LL who ordinarily wouldn't countenance taking on a LHA claimant.
This could even work in Newham!!
Plus a CU could prevent even more LL exiting the LHA market with the coming advent of UC.
CU's would also have the unintended consequence of imposing financial discipline on claimants if bills are ringfenced.
This could make their financial resourcing less chaotic and bring some sort of calm to their lives.
A CU would also be in a position at some stage to offer loans which would facilitate deposits for prospective LHA claimants;  which has always been a major stumbling block for them.
Not all councils are willing to assist in providing deposit monies for a LHA claimant which leaves the claimant in an impossible position.
So it seems CU's are the way forward.
Why then do we not see the govt espousing their efficacy to the vast benefit population.
Doing so it seems would actually assist the govt, probably preventing such political outbursts that occurred recently from the Newham mayor.
The banks have been proven to be worse than useless.
Indde you would have thought that a bank might decide to set up a CU for the great unbanked.
Only trouble there would possibly be;  a mass exodus from 'normal' banking to CU's,  which would effectively cannibalise their own business.
There must however be millions of people that could benefit from the discipline of the the CU setup.
Trouble is there is probably not enough profit in it for the banks.
If we have learnt anything in this finacial crisis is that we need boring methods of managing our paltry financial resources without being stung for charges by big banks.
So yes CU's bring them on, but quickly please.
Chances of any of this happening

by Ben Reeve-Lewis

8:41 AM, 13th May 2012, About 10 years ago

Haha I take it the last comment was a joke.

You have it in a nutshell Paul. CUs do all this and I estimate they could well be a cornerstone for dealing with housing problems and debt and financial recklessness.

CUs have been around for donkeys. My one since the early 1980s, its very well established. It started in a church hall and now, rather fittingly occupies a defunct Barclays Bank branch.

There is no reason why a landlord cant insist the new tenant join a CU as a tenancy condition. We will be requiring it from our tenants before we pass them on to a landlord, along with a quick training course on how LHA works and the obligations of tenants to a property and under contract which will help make them a more attractive prospect. This isnt as one-sided as it seems as we will also be running training courses for landlords too. I am forming "The 1st Landlord's Club", for people new to the business. This will take the form of training sessions and a 6 month member only legal mentoring package where they get free help and advice with anything they need.

We will be doing tenant reference checks too but at the real price not a massive fee

Councils can and do set up credit unions sometimes. My employer have set one up just last month specifically for council employees, with several benefits, including discounts in many local shops and £10,000 life insurance cover just for signing up.

As for the possible mass exodus from normal banks, that their problem. I was talking to a Canadian tenant about them the other day and she told me that in Canada CUs rival the major banks, and are really major players. Bear in mind that the shareholders arent fat cats living in Monaco but the people who are day to day members


9:08 AM, 13th May 2012, About 10 years ago

Perhaps the Canadian experience you mention has much to be commended.
Personally I would much rather my pension and financial mangement was run via a credit union, with no income going to shareholders.
Much prefer the idea of careful financial mangement with people being resourced locally rather than the monies disappearing off to some tax haven.
Micro-finance could be arranged for small start-ups that the banks won't even consider because there is not enough profit in it for them.
Didn't M & S start form a penny market stall.
'From small acorns do oak trees grow!'
I much prefer the idea of my monies being lent out locally with relevant return of course.
The vast majority of the population don't need expensive to run current accounts.
A CU account would suffice.
I still think the PO woulod be a fanatastic way to deliver a universal UK wide CU, but of coures the big banks wouldn't like that.
How the Canandians have arrived seemingly to that position is something perhaps the govt should look at.
What better way could a govt impose indirectly financial responsibility upon people than via CU's.
This hopefully would prevent over indebtedness occurring in future.
Although the present consumer debt which I think is a trillion pounds, is going to take some time to pay down!!!???

by Mary Latham

10:38 AM, 13th May 2012, About 10 years ago

I keep warning landlords about RRO's Ben but they won't listen until it hurts them in the pocoket - it will be good if you can use the money for empty home improvements - I never defend criminal landlords and I would rather see money used from them to make a difference than the increasing HMO licence fees that cost the good landlords.
There is an App like the one that you are talking about Ben it feeds back the details to the local authority and I think it was launched by the guy who did the Empty Homes TV programme and campaign - this was last year when all the Empty Homes stuff was in the headline.  If I can find a link I will post it.
Do not get me started on meetings about meetings.  My top HATE is when they spend 1/2 hr reading the minutes from the last meeting and taking changes - they are circulated well before the meeting why can't people read them and email their changes so that we can save 1/2hr!!!!!!!!! Followed by the stories behind why people sent their apologies - who cares lets do it!!!!!!!

by Mary Latham

10:55 AM, 13th May 2012, About 10 years ago

In my opinion local authorities need people to join CU's as much as landlords do because the UC will mean that they no longer receive their rent directly from the benefit department, neither will RSL's.. Utility companies can be added to the list too.

I cannot see a day when everyone would use a CU and in fact they are not set up to handle that level of business, their purpose is to offer a service to those who have been financially excluded, and they have a limit to the amount of accounts that they can carry and the area from which they can take clients.

Many landlords in the West Midlands are now making it a term of the tenancy that the tenant opens a CU account and puts a standing payment in place to pay the rent to the landlord before they sign an AST.  The reason that I am working with them and with local authorities is to iron out some of the details and to ensure that there are payment points that are easy to access.  Some landlords go with the tenant to open the account because many tenants are nervous about filling in forms and even approaching a CU.  Once they see how helpful the staff are they gain confidence and the landlord can take a step back.

In most cases it is the Landlord who pays the fee, usually £4 a month (I can feel you twitching Paul) and landlords don't mind because it means that they can rely on getting the balance of their rent regularly and in full and there is nothing to stop a landlord increasing the rent to cover that charge - although the tenant would need to make the money up from other benefits because LHA will not be increased to cover it.

Paul lets not make this sound like a punishment its a way of helping people - we all have poor skills in some things and for many people its literacy and financial management.  I could not leave the house without my Sat Nav because I have no navigational skills and my Sat Nav guides me to where I need to be, just as a CU can guide a client to where they need to be.


10:07 AM, 13th May 2012, About 10 years ago

 Tasker Payment Services has been set up specifically to overcome the issue with Universal Credit, as well as the many problems landlords currently have with direct payment to the tenant. We provide an account for the tenant to have benefits paid into, and with their permission send rent directly to the landlord on the day it arrives from the LA. We will be issuing prepaid debit cards to load the remaining funds onto for the tenant to withdraw when UC comes. Our service is in use today, and works extremely well. As we are not a credit union, we have no common bond restrictions, therefore can deal with tenants from any borough in the UK. So if landlords do not have access to the Credit Union service, or are using three or four different organisations, it is a vital tool going forward.

by Ben Reeve-Lewis

11:11 AM, 13th May 2012, About 10 years ago

Yep I keep warning them too. Councils are talking a lot about this at the moment and we are all getting briefed and trained in claiming them. They are definately going to flavour of the month soon.

Yeah a few organisations are developing empty homes apps, ours will be sitting as part of a greater package of them, including apps to highlight unlawfully sub-let social housing, repairs that get sent straight to the correct officer in the maintenance department, and a 'Notice checker', double check your notices before you serve them + many others as you will see in the coming months.

When I first left life as a TRO in 2001 to run my own housing law training business I spent 3 months before my new income kicked in, working as a temp as Head of Homelessness for West Wiltshire District Council. We had at least 3 two hour meetings every week. The head of housing, the head of finance, the head of legal, me etc, all heads of departments and even at the end of each meeting I couldnt have told you what they were about, other than self preening.

One day I was staring at the blossoms outside the window comletely lost in thought when I was aware the room had gone silent, everyone was looking at me for my opinion on whatever the hell it was that was being discussed. I feigned surprise and said "Who are you people and what are you doing in my living room?" Nobody laughed. I handed in my notice the very next day. I realised there was no room for me in an organisation like that, or more correctly I realised that there was no room in my life for an organsiation like that.

A long time ago someone said to me "There are 3 kinds of people in the world. Those who make things happen, those who are part of what's happening and those who say 'What Happened?"

by Mary Latham

11:21 AM, 13th May 2012, About 10 years ago

And number 4 people who don't know what is happening because they are "in a meeting"

I have to sit there poker faced - I am not thinking about blossom on trees hahahahaha

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