Strengthening service delivery by consolidation information sheet
You will need to have 
Adobe Acrobat Reader installed on your computer to view or print the PDF files below.
For more information on PDF files, obtaining Adobe Reader or converting PDF files to text, visit the help section. If you are still unable to view the files, please call 1300 880 882 to arrange an alternative format.
The Department of Housing 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.
- Vision for the future
- Why consolidate
- Different ways to consolidate
- Organisational structure
- Supporting consolidation through title arrangements
- Manual for restructuring organisations
- Risks and opportunities
- Other related activities
- Points to remember
Print version: 
Strengthening service delivery by consolidation (55Kb)
Vision for the future
In 2006, the Minister for Public Works, Housing and Information and Communication Technology released a Direction Statement for community and local government-managed housing. The statement outlines a vision for a robust and planned network of funded services operating in a coordinated way as part of one social housing system, delivering viable, sustainable and quality services to clients. The statement also outlines the key strategies to achieve this vision by 2011.
There are more than 450 funded community and local government providers of housing and housing-related services in Queensland. The introduction of one social housing system presents a timely 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 Housing is encouraging funded organisations to consider the benefits of organisational consolidation as a strategy to grow and sustain community-managed housing into the future.
To assist organisations with consolidation processes such as amalgamations and mergers, the department is developing tools and resources that will help to inform management committees and staff about the steps and processes involved.
Why consolidate
Consolidation can:
- strengthen organisations
- achieve an income stream to support professional property, tenancy and asset management
- improve performance of providers
- improve service delivery to clients and
- 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.
Consolidation is also vital to the continued expansion of social housing supply nationally. Housing Ministers have endorsed a Framework for National Action on Affordable Housing which includes a commitment to a National Sector Development Plan for not-for-profit growth providers. The plan is intended to support the development of not-for-profit organisations that aspire to operate at a significantly increased scale.
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 the one social housing system.
If your organisation plans to remain small, an incorporated association structure is generally more suitable. Other corporate structures for consolidated entities may be endorsed on a case by case basis.
Funded organisations are encouraged to approach the department 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.
Supporting consolidation through title arrangements
Under community housing programs, title to department funded properties is to be held by the Queensland Government, with properties leased to providers. Where a provider contributes land, funding will be advanced on the basis of the department holding a first mortgage.
The transfer of property title from one provider to another may be approved, in certain circumstances, to encourage consolidation of providers with title to property in which the department has a legal or financial interest.
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 real estate 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 new manual has been released: 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 and your Community Housing Resource Worker early if you are planning for consolidation. Resources may be available for consolidation initiatives that are supported by the department.
Other related activities
Regional planning
To assist you, the department is publishing comprehensive regional social housing profiles. The profiles will document the number and location of social housing providers, the properties they own or manage, the specialisation and expertise of service providers, property asset ownership arrangements and the number of households assisted by individual providers.
The next step will be a process whereby department staff, including those from area offices, will work with Regional Community Housing Councils to ensure that regional planning and future investment is informed by community views and is tailored to meet community needs and whole-of-Government priorities.
Becoming a registered provider
There are currently 84 housing providers in Queensland that are not registered under the Housing Act 2003.
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 provider.
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 department-managed combined waitlist, you will not need to administer a separate waitlist, but will retain the ability to match short-listed applicants to your housing vacancy. Contact your Regional Services Officer for more information.
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, contact your Regional Services Officer on 1800 642 902 or email communityhousing@housing.qld.gov.au.
Points to remember when thinking about consolidation
- Early in your planning, contact your Community Housing Resource Worker.
- 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 opportunities both in your region and with like-minded providers.
- 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.
- You must obtain department approval prior to transferring to another organisation any assets, liabilities or contracts to which the department has a financial or legal interest. This includes property titles, surplus funding and funding agreements.
- Your Community Housing Resource Worker can assist you to discuss consolidation opportunities with other providers in your region and undertake planning.
- The department will support worthwhile consolidation projects, and resourcing may be available.
Last updated 16 November 2007
Other languages