26 June 2012 – Numbers and Truth

So often we think that a way of solving an issue is to quantify it. We believe that expressing a problem in numbers gives us control. Very often it does help; but also very often that number can be misleading. And there’s almost always a lot of further numbers behind the original number that can give us more understanding. The trick is to know how deep you need to dig to arrive at numbers from which you can draw firm conclusions.

Let me give a couple of examples

• Our Arrears have recently fallen to 4.6%. That’s a phenomenal result! It’s a fall of 1% in our arrears in a couple of months. That is almost unheard of and would normally be attributed to unusual Housing Benefit payments. But actually it looks to be a real fall and is the result of lots of brilliant work by Housing colleagues over recent months. But to be honest we are genuinely a little unsure how delighted to be about this. Will the fall reverse in the next few months? Were there exceptional circumstances that we don’t know about that caused the fall? Why have we achieved such a great result just at the moment when the general economy is falling into a double-dip recession? As with so many apparently hard numbers, this one provokes more questions than it answers. It also makes us realise that we need to learn how to forecast changes in arrears figures better. We didn’t know that such a big fall was imminent. When Universal Credit arrives, will we be similarly surprised by big unanticipated movements in arrears?
• The planned changes in Housing Benefit mean that residents who are deemed to be under-occupying their homes will lose some of their benefit and will need to pay a larger share of the rent themselves. We initially thought that the key number here was the percentage of our homes likely to be affected by this change. After a lot of work, it is looking as though that number may be around 15%. But on second thoughts, how much does that 15% actually tell us? There’s then a second number to focus on. What percentage of that 15% won’t be able to afford the increased Housing Benefit? Perhaps as little as 20% of the 15%. Or that’s at least what residents are telling us and other landlords. But are they being too optimistic? Are some households quite reasonably hoping that they will be able to continue affording the extra space but will they find that in practice they cannot afford it? The truth is we don’t know!

My conclusion?Numbers matter but we need to be modest about their ability to interpret the world. It’s tricky out there and it’s rare that one number really encapsulates the full story.