The Case for Social Enterprise - Coursework Example

24th April The case for social enterprise Executive summary Housing associations are social enterprises that provide local communities to acquire quality houses. In UK, large number of housing associations has emerged as the result of increased population and changes by the government. This paper highlight some examples of housing associations as Aster Group, Affinity Sutton, Alliance Homes, Amicus Horizon Anchor Trust, Bracknell Forest Homes, Broadland Housing Group,Bromford Housing Group and B3Living among others. Housing associations get funds from the rents paid by tenants. However, banks and other financial institutions provide loans to the associations. One of the major strength of housing associations is that they are supported by the government due to their objective of assisting the poor and the disabled members of the community. Other alternative ways through which housing activities can be provided as indicated in this paper includes private companies, public service agencies and charities. Introduction Social enterprise entails an organization that aims at improving the well being on the communities rather than increasing the profit for its shareholders. Being divided either non-profit or for profit, social enterprises may take a form of charity organization, co-operatives, housing associations or mutual organization (Malthus 41). Housing associations are organizations that aim at providing low cost houses to the individuals who are in need of homes. Being major providers of new houses in United Kingdom, housing associations are independent although the state has a significant control over them. This paper seeks to discuss housing association as a social enterprise in the housing industry. Background to the activity Housing association emerged in the nineteenth century as the demand for houses by the middle class individuals increased. Examples of early housing associations include Peabody Trust and Guinness Trust (Borzaga and Defourney 21). As the result of the changes implemented by the government, more housing associations were established in the twentieth century. Currently UK has large number of housing associations such as Aster Group, Affinity Sutton, Alliance Homes, Amicus Horizon Anchor Trust, Bracknell Forest Homes, Broadland Housing Group,Bromford Housing Group and B3Living among others. The major responsibilities of the housing associations includes provision of housing servicers, managing huge estates and managing housing schemes for old individuals among other duties (Kevin and Julius 15). In order to ensure that members of the community who are disadvantaged or poor are recognized, housing associations maintains housing projects that caters for the needs of disabled people or those with mental problems (Gergen and Gregg 46). Additionally, housing associations provides housing services to women who flee from domestic violence, homeless as well as ex-offenders. Legally, housing associations are treated as private entities implying that the government has no direct control of them. However, in the recent past, their status has been questioned by various rulings. For example, in 2004, an EU ruling maintained that for the purpose of procurement, housing associations should be treated as public an argument that was accepted by the UK government (Mishkin 11). The management of housing associations is under the volunteers who act as the board of directors or a committee (Spreckley 66). The management team may include politicians, business people, local authorities or groups within the community. Throughout UK, more than 30,000 individuals are involved in the management of housing associations. Housing associations are funded by rent paid by the tenants as well as service charges paid by those residing in the houses. This implies that the associations do not highly depend on donations to carry out their activities. Thus, the associations are run as commercial companies (Wyler 36). Depending from where they are located, new associations are subjected to various economic subsidies. For example, housing associations that are based in England are funded by Homes and Communities Agency while Northern Ireland Housing Executive undertakes the same responsibility in Northern Ireland. Weish government on its part funds and regulates the housing associations in Wales while the Scottish Government provides subsidies to the associations in Scotland (Affordable Housing Capital Funding Guide 23). Apart from the subsidies from the governments and industry bodies, housing associations that embarked on building new homes used to borrow from building societies and banks. However, due to the financial crisis in the 2000s, majority of the societies and banks became hesitant to give the funds making the upcoming associations to emulate corporate bonds to get adequate funds for expansion strategies (Hollander 57). Criteria against which to judge the best way of carrying out housing activity Based on the high demand for houses in UK and along the world due to the increase in population, housing associations are in a better position to provide housing services. Based on the fact that the housing associations do not aim at making profit but to assist the communities, they are able to provide equitable services. Due to the differences in the income level of the government employees as well as self employed individuals, home ownership varies (Spear 36). Thus, poor individuals are not considered by the wealthy individuals. This implies that since housing associations focus at assisting the homeless as well as the poor, they are in a better position to carry out the activities they are doing (Habisch et al 21). In addition, housing associations are not focused at meeting the interest of some section of the managers since the management team is made up of volunteers. This means that the housing associations value equality in its activities. Apart from the associations, housing activities can be done by private companies. Private companies aim at providing quality services and products. This means that if allowed to provide housing services, private companies will also be in a position to provide quality homes that meet the needs of the tenants and communities. Additionally, public service agencies are an alternative avenue of providing housing services (Nyssens 31). This implies that the government should allocate more funds to ensure that the agencies provides quality homes while at the same time close monitoring of the use of funds by the agencies managers (Pearce 54). Similarly, charities such as Action Aid, Action for Children , Action on Hearing Loss , Age UK , Help for Heroes and Historic Royal Palaces among others can be used to provide housing services. Through the use of funds from the international community, the charities will have adequate funds to build quality homes for the communities. Analysis of the alternatives, weighing the positive and negative aspects of each As mentioned earlier, private companies focuses at maintaining strong positive relationship with their clients by providing quality services and products. Thus, if provided with an opportunity to provide UK residents with homes, private companies will ensure that they maximize their profits by building quality homes (Pearce 17). Another advantage of the private companies is that they have high chances of getting funds due to the large number of investors who may be willing to invest in the housing industry. However, private companies may raise the prices of their houses an aspect that may make poor individuals to lack ability to acquire the homes (Kavoussi 26). Public service agencies on their part are focused at assisting communities to access public goods (Woodin et al 46). This implies that they can provide quality houses just like the house associations. Additionally, public service agencies have an opportunity of getting more funds from the government implying that they will have the ability to cater for the construction cost as well as management expenses. Due to the expertise of the agencies in the management as well as designing of the buildings, agencies are in a better position to provide houses to the local residents. One of the major disadvantages of using public service agencies is that they might misuse funds thus resulting to low process in the construction of houses. Similarly, the public service agencies may offer substandard houses that do not meet the needs of the tenants (Frank 11). Charities obtain their funds from various sources including government, individuals as well as international community. This means that they have an opportunity of raising their revenue that will help them to construct quality homes for all individuals regardless of their income statues. Based on the close monitoring of the charities by the government, they are not highly involved in misuse of funds (Billis 26). Thus, if they undertake housing activities, charities will construct quality homes that justify the funds donated to them. However, if not properly checked, some individuals may provide fake documents and financial reports in order to get favor from the charities an aspect that may jeopardize the services of the charities in the community. Conclusion Based on the above discussion, it is clear that housing association as a social enterprise cannot be overlooked. The increased demand of homes in the developed and third world countries, has called for construction of more houses top accommodate the ever rising population. Various housing associations for example in the UK, has made significant number of residents to own houses (Holton 19). Major sources of funds for the housing associations include rent and service charges paid by the tenants. Additionally, up coming associations have a chance of getting loans from banks and other financial institutions. Since housing associations are not focused at making profits, they are in very good position to provide housing services (Griffin and Mahon 68). Alternative methods of providing housing activities include public service agencies, charities and private companies among others. Public service agencies have the advantage of getting financial support from the government as well as expertise (Aiken 6). However, the funds can be misused leading to lack of proper delivery of housing activities. Charities on their part obtain funds from various sources an aspect that makes it to effectively provide housing services. Additionally, charities are closely monitored by the government thus funds are appropriately utilized. Private companies’ objective is to offer quality products. Based on the high profits and increased investments, they have good opportunity to offer housing services. 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