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 Ben Reeve-Lewis

8:29 AM, 14th May 2012, About 10 years ago

Aki that is a fantastic illustration of how you work these things out on the ground. You do have to get around people whose mindset might not be that helpful at times but you also encountered people like Leanne Tasker and even the head of housing benefit who was prepared to work with you.

Council's will work with private landlords and agents if they know that they are professional and not crooks, which is clearly the case here. I dont mean you will necessarily get welcomed with open arms, people are people and you have to kiss a few frogs as it were.

What Localism is doing, or has done already is to throw councils into the private arena to a certain extent. Councils are even allowed to sell services at a profit but many council types having figured this one out yet and baulk at the mention of profit after years of conditioning (You have to call it 'Income Generation' in meetings and then everyone relaxes haha)

This is why I keep banging on about getting to know your local EHOs, TROs, LHA staff, attend landlords forum meetings and if your council doesnt have them, approach them saying you would like them to start one. I've trained Sandwell council, they have some good people in there.

Dead right on the CU front too, they are going to be an essential component when UC comes in next year, especially in the north of england when Bedroom tax is introduced and the landlords dont have anywhere smaller to move them too. Thats the next disaster we have in the pipeline that we should be preparing for


7:58 AM, 14th May 2012, About 10 years ago

Ben our willingness to work with people and to devise solutions rather than put up with problems has seen both me and my brother to become heavily involved with our local councils and various associated committees.  l chair the W-ton landlords steering forum and also the W-ton council housing benefit workshop.  l feel using our experience we can help our local landlords no end and keep them up to speed on the changes that Welfare Reform is constantly forcing upon us.

by Mary Latham

10:38 AM, 14th May 2012, About 10 years ago

Leanne & Aki proving once again that in the West Midlands we find solutions to problems that remain unsolved elsewhere. I am very proud to be working with these guys because they are way ahead of the game and offer landlords and tenants good services.


12:51 PM, 14th May 2012, About 10 years ago

The new processes that have been devised for CU and LHA payments will be as like manna from heaven for LHA LL.
Indeed they would most probably wish to have this setup now, so as to be ready for UC.
I particularly like the TPS method as it is UK wide.
LL in the know could well insist that the TPS mehtod is used or no tenancy or even no continuation of tenancy.
As for the monthly fee for making a payment, the rent would be £503 rather than £500 per month!
Having the CU is essentially a firewall between the LL and the council.
I like that idea, it removes a massive risk to LHA LL in the event of attempted clawback.
Is there an issue though to ensure that payments are also ringfenced for utility bills.
Putting all remaining funds on a pre-payment Visa card would enable the utility bills to be spent on drink and drugs, supplies would be cut off in the property.
This would concern me as a LL if the property is not kept warm and utility supplies are maintained then the fabric of the property could degrade.
As a LL I would like the other regular payments in addition to rent also being ringfenced so that the claimant cannot use those funds for anything else.
There will also be resistance from LHA tenants who have monies paid to their own bank account.
However if the choice is to have a CU adminster the LHA payments or no tenancy,  most tenants will agree to change to a CU methodology.
Most LHA tenants are probably completely unaware of the issues surrounding clawback as it would affect the LL.
This is still a massive risk to LHA LL.
CU is the way to go NOW.
TPS seems to me a brilliant idea due to the constraint of common bond being resolved.


16:38 PM, 14th May 2012, About 10 years ago

Paul, your comments are very encouraging. Obviously we are concentrating at this time on the rent aspects, and making sure our systems for that are impeccable but I have certainly been researching the possibilities of paying energy bills with this system with the introduction of UC. Obviously with recent and imminent increases to energy prices this is certainly something TPS would not want to overlook! I am sure that it would make our service even more valuable to both tenants and landlords. As I said in my earlier post, most benefits claimants are only too grateful of this sort of help, as many will freely admit that their budgeting skills are not great and they require assistance.


18:51 PM, 14th May 2012, About 10 years ago

How about some sort of commercial relationship with an energy provider for all CU clients.
There would be an obvious saving on deliquent accounts, to the extent that energy providers could actually provide CHEAPER prices for LHA claiamants as all the monthly payments would be ringfenced.
I know that doesn't help pre-payment metods, but perhaps the deal could be such that it would be worthwhile for energy providers to offer credit meters knowing they would be paid as the LHA tenant wouldn't be able to spend the energy monies as they would be righfenced.
I would imagine that energy companies could easily offer a CU tariff.
There would be a consequent benefit to CU as energy companies would pay a small amount of commission. tenants would get a better deal than at present, less admin for the energy companies chasing recovery which they will never get from a benefit claimant, 
It seems the more one thinks about it,  the benefits for a vast amount of people to run their financial affairs via a CU seem overwhelming.
Perhaps if they had been used more extensively in the past we would not have the massive consumer debt this  country is labouring under.
It is almost as though a CU could be perceived as a proxy parent even to supposed adults.
They seem to be the only financial organisation that has the ability to impose some sort of financial discipline.
At last there seems to be an effective way of an 'adult' being told NO you can't have it because you don't NEED it and you need the monies to pay your bills.
Very boring to hear but that is what vast amounts of the population NEED to be told.
It strikes me as bizarre though that such an effective instiution as the CU is not more widely publicised by the govt.
One could be cynical in thinking that lots of people might migrate to CU's from present banking arrangements, which would clearly have an effect on the big banks' profits.
And then  the PM's city chums might not be very impressed.
But no, surely not, profit put before assisting people!!?


19:35 PM, 14th May 2012, About 10 years ago

I agree Paul. Someone has likened those possibilities to a DSS version of the old Secure Homes account. I don't think this was ever available to benefits claimants (I may be wrong) but as you stated, if the government are ever going to actually attempt to resolve the issue of financial exclusion, and the lack of financial management by people on benefits there needs to be services like ours in place to accommodate the needs that are clearly out there. These problems are huge, which is why we are doing what we are doing. As we are currently the only company concentrating purely on LHA tenants, there are alot of avenues for us to cover!

by Mark Alexander

20:31 PM, 14th May 2012, About 10 years ago

@Taskerpaymentservices:disqus  and @Rent_Me_Now  thank you both very much indeed for your excellent contributions and welcome to Property118

by Ben Reeve-Lewis

8:50 AM, 15th May 2012, About 10 years ago

I heard on th radio the other day of people forming small compnaies of a few hundred people to get gas and electiricity cheaper as they are buying in bulk. There seems at the moment to be a disagreement about the legality of it I think but a sound principle.

And my favourite initiative that I read of about a month ago (cant find the link this morning) was of a group of housing associations in the North West who have formed an online tenant shopping service where they can get fridges, cookers, home furnishings at roughly 50% discount because the organisation has enough buying power to get things at bulk discount and pass savings on.

Jugaad again

by Mary Latham

10:20 AM, 15th May 2012, About 10 years ago

Or another word co-operative.  I can still remember my mums divvy number now 381116 and at Crhistmas choosing treats because she had saved her dividends - brilliant idea. And they did home delivery which people think of as a hi tech thing - bicycles with basket low tech low carbon emisions

My aunt and uncle built their own home as part of a co-operative too.

I was involved with two co-ops the first was a baby sitting group where we used tokens worth an hour each but costing nothing. We would pay and buy with our tokens and everyone got out only what they put in.  The second was when I had an allotment where we all worked our own plot but  helped each other.  One guy would go and get a load of manure from a local stable while we dug his plot. We shared the produce because we all grew too much, we watered for each other so that we could go away... it was a great team spirit.

I can also remember a head popping around the back door asking my mum to "watch the kids" while a neighbour went to the shop. We all felt very safe and if we hurt ourselves we would run to the nearest house where someones mum would sort us out. We had a strong sense of community and cared about each other and we were afraid to do anything wrong because there were too many pairs of eyes watching us. The words "wait until I see your father" was all we needed to hear. There was someone who delivered the babies and another who "laid people out" I didn't know what that meant in those days.  I remember being told that Jackie would be having tea with us from now on because her mum "had a little cleaning job to help out". Each neighbour fed one of the children and I am fairly sure that no money changed hands.

All this seems like another world now.

Its seems lwe once used Jugaad thinking in this country I wonder where it all went? Have we all become too selfish for this to work now?  Perhaps we lost the need and now that need is returning? We can learn a lot from the past

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