Ian Halstead takes the pulse of the region's largest housing association - and finds that business aims and social equality are happily at home together... As Britain's residential property boom continues, the role of the social housing sector becomes ever more important. High street lenders seem-ingly delight in regular announcements about the difficulty of gaining a place on the housing ladder. And in a society where the chasm between the haves and have-nots has widened steadily for decades, it's easy to forget the plight of those who can barely see the lowest rung. The current government's solution has been to encourage the evolution of housing associations - traditionally regarded as long on philosophy and social awareness, but light on managerial skills and strategy. The sector is becoming more efficient, leading to a slow but steady series of mergers. The trend for consolidation was recently exemplified by the melding of Birmingham-based Prime Focus and Coventry's Keynote into Midland Heart. The merged body is comfortably the region's largest housing association, with the balance sheet of a decent-sized corporate. Assets in excess of £1 billion, turnover just shy of £130 million and some 31,000 properties place Midland Heart 12th in the UK's in its sector. The group's chief executive officer, Richard Clark, is quick to stress, however, that the merger isn't about growth for its own sake. "The structure of our sector has certainly changed in recent years, and we are now 12 housing associations compacted into one," he says. "The catalyst for the mergers has been the desire to increase efficiency, and to reduce the level and expense of bureaucracy." Several of the sector's recent major mergers involved associations from different regions looking to increase their national presence. However, a key driver for the hook-up between Prime Focus and Keynote was their respective strengths, complementary business activities and operations in the same geographical area. "Probably 90 per cent of each association's homes were in the West Midlands, so there was a lot of duplication," admits Mr Clark. The group's main offices are now in Birmingham's Bath Row - where 250 of its 1,300 employ-ees are based - with satellite operations in Coventry, Leicester, Stoke and Wolverhampton. Midland Heart's expanded asset base will enable it to compete more effectively for government support, and to enter strategic partnerships with private sector house-builders. Its ambitious investment programme envisages annual spending of £100 million on improving thousands of existing homes, building at least 600 new ones per year and making many neighbourhoods desirable and sought-after places to live. "We have several preferred developers who have gone through a stringent selection process, although, in some situations we work through competitive tenders," says Mr Clark. "We will also buy sites at the market rate, and then tender the work to regional contractors." With 2,000 homes in the development process, and two major Extra Care Village schemes under way in the East Midlands, Midland Heart continues to make significant investments in local communities. Mr Clark pays tribute to the continued support of Barclays, Lloyds TSB and Nationwide in underpinning its £400 million borrowings. The projects in Milton Keynes and Northampton - both involving the building of around 300 homes and new village centres - are especially capital-intensive, requiring around £20 million each. Mr Clark's strategy during his 12 years in charge at Prime Focus was to see the association as a regeneration body, rather than purely a social housing landlord. Last year saw Building Magazine rate Keynote its Regenerator of the Year for the social housing sector, and this was followed recently by one of the first Gold Awards from the Housing Corporation for Midland Heart's work with Birmingham's homeless. The presence of an OBE on Clark's CV underlines his long-term contribution to the sector, and his wider passion for social equality is evident. "Almost a third of our employees are from black and minority ethnic groups, as are about half our tenants," he says proudly. "Midland Heart has shown a clear commitment to ethnically diverse neighbourhoods across the urban West Midlands - in Birmingham most notably, Handsworth. "We have procurement policies that encourage a range of small, local and BME organisations to tender for a variety of contracts. "We are an equal opportunities organisation. Once you are known to be an equal opportunities employer, it is remarkable how many talented people come forward." Mr Clark's refreshingly libertarian views do not dilute his sense of corporate awareness. "We can never forget the basic principles of operating a clearly defined strategy and working hard to meet our targets," he says. "We would like to expand into areas of the Midlands where our representation isn't strong, and do more to help regenerate communities, and yet we are always mindful of the need to remain financially sound and focused." ..SUPL: | 
