The Department of Communities (Housing and Homelessness Services) is encouraging funded organisations to consider the benefits of organisational consolidation as a strategy to grow and sustain community-managed housing into the future. This information sheet describes the benefits of consolidating with other providers and important points for housing providers to consider.
Print version: Strengthening service delivery by consolidation Strengthening service delivery by consolidation
Table of contents:
Vision for the future
In 2006, the department released a Direction Statement for community and local government housing that outlined a vision for a robust and planned network of funded services operating in a coordinated way as part of one social housing system.
One social housing system presents an opportunity to consider how existing organisations can continue to improve the quality and scope of services to clients as well as achieving administrative and service delivery efficiencies.
The Department of Communities (Housing and Homelessness Services) is encouraging funded organisations to consider the benefits of organisational consolidation as a strategy to grow and sustain community-managed housing into the future.
Why consolidate
Consolidation can:
- maximise organisational efficiencies and create economies of scale
- strengthen the capacity and viability of organisations
- help reshape existing regional service systems to ensure they can best meet current and emerging needs
- improve regional service co-ordination
- improve quality and consistency of service delivery to clients
- improve organisational systems encompassing a quality system approach
- increase the ability of the community housing sector to attract new sources of investment to increase housing supply.
Consolidation is an important strategy to sustain and grow community housing into the future. Some consolidated community housing organisations will become major social housing providers managing multiple programs and capital developments.
Different ways to consolidate
Organisations are encouraged to consider a range of consolidation options which lead to better outcomes for tenants, and efficiencies and economies of scale for their organisations. The options are:
- amalgamations and mergers—the department's preferred approach for providers wishing to consolidate
- partnerships, alliances and agreements between organisations—collaborative arrangements can be strengthened by a range of formal agreements such as a memorandum of understanding.
Amalgamations and mergers can be strengthened by other partnerships, alliances, shared corporate support and agreements with support providers, referral services and asset management contractors.
Organisational structure
If you are an incorporated association, company or cooperative considering an organisational restructure for consolidation and growth, you are encouraged to consider the benefits associated with an organisational structure known as a company limited by guarantee. This structure provides a mature, robust regulatory framework in keeping with one social housing system.
If your organisation plans to remain small, an incorporated association structure may bemore suitable.
Funded organisations are encouraged to approach the Department of Communities (Housing and Homelessness Services) early to discuss consolidation proposals and obtain feedback.
The preferred structure of a public company limited by guarantee is not intended to apply to churches and local governments. The department is having further discussion with various churches and councils regarding service delivery models and options under one social housing system.
Transfer of title and contracts
It is important to note that departmental approval is required for the transfer of any department funded assets and contracts. If your organisation owns any property subject to a mortgage or charge, or has any other liabilities or contracts concerning assets that are to be transferred to the new organisation, you must seek consent of all other relevant parties according to the terms of the mortgage or contract.
Manual for restructuring organisations
To assist organisations considering consolidation, restructure, merger or amalgamation, a manual is available: Restructuring to a company limited by guarantee: a manual for community housing consolidations .
Commissioned by the department, the manual was prepared by the legal firm Allens Arthur Robinson in May 2007. The manual outlines the processes for various types of registered providers of community housing to change their current structure to that of a public company limited by guarantee, either on an individual basis, or by amalgamating with one or more other registered providers. It concentrates on issues for incorporated associations, companies and cooperatives, and does not apply to churches and local governments.
The manual is not meant to be a complete guide to all issues, and has been prepared without reference to any particular registered provider. No statement in the manual is to be taken as legal advice or relied on by a registered provider or any other person in respect of a particular transaction.
Be aware that legislation and requirements can change. Each organisation is strongly advised to seek their own legal and financial advice on any consolidation initiative and independently verify any statements in the manual. The manual provides a guide to the types of advice you require and should be used in conjunction with your organisation's own legal and financial advice.
Risks and opportunities
You should carry out a careful assessment of your organisation's operations and future plans. Consider the costs and benefits, and the risks and opportunities of consolidation. Even a straight forward process with few contentious issues may take some time and will have financial costs.
Be aware that in the future the department will give preference to funding housing providers that have consolidated to improve service delivery to clients.
Providers should aim for:
- strong governance
- organisational viability, and
- quality, sustainable client outcomes.
Talk to department staff early if you are planning for consolidation. Resources may be available for consolidation initiatives that are supported by the department.
Other related activities
Becoming a registered provider
If your organisation is not registered you should consider contacting the department to discuss your options for either becoming registered or consolidating with another registered organisation.
Once registered or merged with a registered provider, you will be a part of an integrated system for social housing provision in Queensland. By identifying your applicants from the Housing Register you will not need to administer a separate waitlist, but will retain the ability to match short-listed applicants to your housing vacancy.
How to exit from department agreements
If your organisation wishes to terminate an assistance agreement with the department there are a range of options to explore. These include an organisation winding up and handing back properties and leases, or buying out the department's financial interest. If your organisation is considering any these options, call 1300 880 882 (cost of local call) to discuss with a Service Officer or email housingprovidermanagement@communities.qld.gov.au.
Points to remember when thinking about consolidation
- Understand your existing operations and review your strategic plan.
- Plan for the future. Consider where you want your organisation to be in 10, 20 and 30 years time.
- Engage with other housing and social service providers to gauge the interest and opportunities for consolidation.
- Consider the separation of housing and support services, where you deliver housing to clients with specific needs while an external agency delivers support.
- Seek independent legal and financial advice.
- Obtain department approval prior to transferring to another organisation, liabilities or contracts to which the department has a financial or legal interest. This includes property titles, surplus funding and funding agreements.
- The department will support worthwhile consolidation projects, and resourcing may be available.
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