Could local decision making and local finance management solve housing shortages – Lessons from Thailand

by Canem Ozyildirim, Associate at Locality Matters

The number of people who live in slums in urban Thailand is disputed widely, but stands roughly between two and five million people [1]. Most of these people live in sub-standard housing with little to no security of tenure and suffer from poor living environments. With almost half the world population living in urban areas, housing for the poor is a growing problem for many countries and a lot can be learnt from the way Thailand is addressing the issue.

In 2003, the Thai Housing Ministry set up the Baan Mankong programme to provide urban communities with long term, low-interest loans to upgrade their homes. Instead of destroying slum areas, the Thai Government is empowering poor urban communities by letting them be in charge of transforming their communities into more attractive and better quality settlements.

[testimonial author=”Resident of Kao Seng”] It [community] used to be slum, but now it is a house. In the past when we went back home, we were afraid to say we live in Kao seng. People might look down [or] have antipathy. However, recently we speak proudly that we live in Kao seng. We speak louder than ever before. [2][/testimonial]

Providing the poor with flexible financing options is one of the key components of the programme. This works hand in hand with the requirement that each settlement forms a savings group and manages their finances collectively. The savings group becomes the core of the community, managing all activities associated with the upgrading operation, from searching for a new piece of land to learning how to plan projects. All around Thailand, they collaborate with local government, volunteer architects, designers and university students to survey all available land, and develop a plan of action to upgrade their settlements within three to four years. The appropriate government bodies then review these plans and channel infrastructure subsidies and housing loans directly to the communities.

Savings groups provide communities with the necessary structure to manage a complex upgrading process collectively and reach out to other communities to share their knowledge and experiences. They also serve a very important social function: Through these groups, everyone in the community, even the poorest individuals, is included in the decision-making processes. In this way, savings groups strengthen the bonds within a community and ensure that each individual’s needs are addressed in the design and production of new settlements. As such, the Baan Mankong program accomplishes two important tasks with a single effort, empowering marginalized individuals while providing them with security of tenure.

For example, in the community of Bonkai, a long-established informal settlement in central Bangkok, 566 households formed a cooperative and negotiated with Crown Property Bureau to rebuild 200 houses that were damaged in a recent fire. Bonkai community was the first to be issued a ‘community lease contract’ in Thailand. The community decided to manage the reconstruction effort in three phases, so that all dwellers could remain on site. In order to fit every impacted household, they decided to build 72 three-storied units. Each unit was built on twenty-four square meter plots, for an average cost of US$4901. [3]

Bonkai before and after reconstruction. Boonyabancha, 2005.

As a precaution against land speculation and gentrification, the program requires communities to make decisions collectively about selling individual properties or making any other changes to the settlement. One of the most common types of tenure in the program is cooperative ownership (other types of tenure include long-term and short-term leases, in which case the community still makes decisions together about selling or building in the settlement), which ensures that the future of the settlement is decided together. There are over 1,010 Baan Mankong projects under way, in 226 towns and cities, involving 54,000 households. [4]

This is not to say that Baan Mankong does not have its problems. The level of debt might be disconcerting and cause long-term stress for many slum dwellers. The project might also disservice those who are renting their dwellings. Strategies that prioritize helping original settlers and reducing participants’ debt should certainly be considered. Yet, the bottom-up, community-led style in which Thailand addresses the issue of informal settlements is exemplary. It not only presents a sustainable method to conquer a monumental problem, but also serves to show how communities can overcome complex urban issues on their own and function as local democracies.

[testimonial author=”Onn (36 years old), Bangramard resident”]Many friends asked me, do I regret destroying this home? I simply say yes, I really do. But it is worth it. If it can be used in exchange for thirty years of permanent tenure, I accept that. My daughter is just eight years old. If we did not attend the project [Baan Mankong] and the [landlord] suddenly need the land back, I have no idea where we would go. [5] [/testimonial]

The Thai approach may not be directly applicable in the UK, and Thailand might be an unusual place to look for inspiration with regards to this issue. However, Baan Mankong not only presents a potentially sustainable method to conquer a global social problem, it also serves to show that communities can be efficient and reliable local decision-making bodies. Key approaches of the programme, namely, the policies that allow for much more localized cooperative ownership, community management of financial resources and local decision-making could be relevant for the UK. Incorporating these measures into local government could help problem-solve and plan more efficiently at a community scale. It might also just create less isolated and more independent communities.



[1] UN HABITAT, 2008:248; CODI, 2004

[2] Rhabibadana, 2007: 3

[3] CODI, 2006

[4] CODI Website,

[5] Chutapruttikorn, 2009: 17 [/box]



It doesn’t stop at Holyrood… how devolution in Scotland is impacting local communities. By David Welsh, Director MainStreet Consulting

Even for those with only a passing interest in politics and government, it’s been a busy few months up here in Scotland. Most notably, we had our Independence Referendum on 18th September, and the subsequent discussions via the Smith Commission on what further powers could and should be devolved to our parliament at Holyrood. That report was issued in late November, with a plan to legislate on much of that even before May 2015’s General Election.

Over the coming few years, we will assume control of a range of new responsibilities, including the ability to set income tax rates and bands, bits of VAT and Air Passenger Duty – and keeping whatever is raised from those in Scotland. In addition, the Scottish Government will have some control over chunks of welfare (essentially, powers to determine the structure and value of elements of Universal Credit), over employment initiatives like the Work Programme, over the management and subsequent revenues from the Crown Estate in Scotland, and fuller control of transport including allowing the public sector to bid for rail franchises, powers to set speed limits and (bizarrely!) over all road traffic signs.

For some, this isn’t enough: does this ability to tax income (but not other forms of wealth or assets like oil & gas) allow us to really grow our economy and take genuinely different courses of action on welfare and so on? For others – including Lord Smith himself – this is simply a good start, and has at least secured the support of all five political parties in the Scottish Parliament.

Of particular interest was Smith’s explicit recommendation that the parties show a similar commitment to “see the principle of devolution extended further, with the transfer of powers from Holyrood to local communities.

This continues a noticeable trend over the past few months to commit to moving decision-making closer to people and their communities: there’s certainly loads of other things going on up here that point in that direction.

Just a few months ago, COSLA (the Convention of Scottish Local Authorities, the representative body for local government) published a thoughtful, laudable and I think successful attempt to influence national thinking on principles of subsidiarity, ‘spheres of governance’, community empowerment, democratic deficits and improving outcomes.  Its Commission on Local Democracy is well worth a read and makes a compelling case why local services and local accountability matters – and therefore why devolution shouldn’t stop at Holyrood.

The Scottish Government is now consulting on its Community Empowerment Bill which – although largely a ragbag of bits and pieces of community-focused initiatives – has some pretty strong policy commitments on more wide-ranging Community Planning Partnerships (CPPs), rights for community groups to request involvement in planning, extending Community Right To Buy, decent procedures for community asset transfers to communities, and welcome new powers for flexibility on local reliefs on National Non-Domestic Rates (local business rates).

And just at the end of November, Scotland’s new First Minister Nicola Sturgeon set out her inaugural programme for government, promising an administration that is “decentralising”. Among 12 bills detailed, two are particularly relevant. First, a commitment to Land Reform aimed at securing a ‘fairer, wider and more equitable distribution of land’ in Scotland through possible measures to break up large land holdings, providing help to communities (including in urban areas) to buy the land that surrounds them, removing business rate exemptions for shooting and deerstalking estates, and penalising landowners who act as ‘a barrier to sustainable development’.

Second, she announced that an independent commission would be set up to report on fairer alternatives to the Council Tax by autumn 2015.  My view is that the current SNP administration’s Council Tax freeze (replicated in England by the Coalition) flies in the face of genuinely local democracy. In Scotland, just 18% of local income is raised through local taxation (compared with proportions nearer 50% elsewhere in Europe). This limits the spend and investment choices available to local communities and will inevitably affect their participation rates. It should be a point of principle that local people decide what taxation is levied and services delivered.

What all of these events, initiatives, policies and announcements have in common is this: they are about power, where it lies, how it’s used and for whose benefit. A national conversation has begun in Scotland on these issues. Hopefully this will continue – perhaps even more emphatically – at local levels by elected councillors, community groups and individual citizens.

For us in Scotland, it will mean a profound change in attitude by our local authorities and other public sector partners. It will mean recognising – as set out by Ben Ramalingam – that “managed systems of people, land, resources, assets and services are all unique”. It opens the door to genuinely diverse communities – with no nationally-prescribed plan and no top-down approaches locally – and occasionally unpredictable events and unforeseen opportunities. Things are messier, yes, but so be it.

For others in the UK, it should also spark similar debates about devolution, decentralisation, control by Westminster, Whitehall and our big public sector organisations. Different parts of the country should be able to experiment with different ways of doing things too.

What we’ve gone through in Scotland in the past year or so has been very special but the lessons cannot be unique.


David Welsh is Director at MainStreet Consulting




How could you transform London’s public services for £10m?

Despite years of money and government initiatives the evidence of London’s communities actually being in control of meaningful budgets or setting up new, local, democratically elected bodies (such as parish councils) is thin on the ground. Read more

Lessons from the White City

I believe in the devolution of budgets and responsibility, from central government to town halls and from there down to community groups. This piece tells the story of how I got involved in the White City community and the lessons we have learned up to this point. Despite being seen by the Department for Communities and Local Government (DCLG) as one of the leading community groups, taking on public services, I feel we are at the start of the journey and I hope to post regular updates on the progress we make over the coming months and years.
I first got involved in the White City through a series of conversations I had with Dame Sally Powell back in 2009 where we discussed the possibility of taking advantage of legislation to set up a parish council, covering the White City area. In the end nothing concrete came from that (my fault) and it is disappointing to see how little enthusiasm there has been for establishing Parish Councils in urban areas. The current administration is looking to address this (Link – next phase for parish councils ) and I welcome these moves. However, at the time of writing, in London, only Queens Park has taken the plunge – with elections due in May 2014.

Lesson #1 you need a standard bearer.

In 2011, through work I was doing for LB Hammersmith and Fulham, I again started to get involved with the community and the efforts that Stephen Greenhalgh (then Council leader) was making to improve services for the community. Indirectly, through Stephen, I met with Harry Audley, the chair of the White City Residents’ Association, and also chair of the White City Neighbourhood Forum. Harry is an extraordinarily powerful advocate for the White City community and it is Harry’s leadership, in my view, that has been the major driving force for the development of the community.

Lesson #2 get hold of a physical asset and start to generate revenue.

I then started to get more involved with Harry and the efforts he and others were making to corral the community and seek out work that the community could do on behalf of public sector bodies. One of the things I wanted to understand was what had acted as the catalyst for building the social capital on the estate? I live between the White City estate and another estate in Hammersmith and Fulham (with similar demographic makeup) and the difference is extraordinary in terms of community involvement. Harry’s view was that one of the key catalyst events was that the community took over the running of the community centre. Previously the community centre had become primarily a drinking venue for a handful of residents and now it is a thriving hub of community activity run at a financial surplus by the community.

Lesson #3 sustainability comes from running services that replace not augment existing services

Through Stephen Greenhalgh’s involvement, and the work that Harry and his colleagues were doing, and the emerging appetite within Central Government to see communities take on more service delivery, the White City was a natural choice to be one of the 12 Neighbourhood Community Budget (NCB) Pilot Areas. This has been an interesting experience for the community and has been a major contributor to the creation of the White City Enterprise (of which I am Chair) and further strengthening of the community, since it started in the summer 2011. What is curious about the NCB pilot programme is that there is not enough evidence of communities actually being given budgets. Plenty of them have been involved in thinking about how money should be spent but there is limited evidence of communities actually having budgets fully devolved to them by local councils or other statutory bodies. For the most part, neighbourhood community budgets have been led (or very heavily influenced by) the relevant local councils. The danger here is that community budgets could end up being about communities benefitting from money for work that is additional to what is already being delivered, rather than being given the budget and control of existing services that they can then replace. I re-read recently a report on “participatory budgets” under the last administration. The whole programme could really be summed up as follows – “participatory budgets? Sure I’ll participate in spending someone else’s money.”

Lesson # 4 think carefully about how you engage with residents and ask the right questions.

The programme of work, we have devised in the White City, as part of the NCB programme , has mainly been developed by a team based within the council (with support from the community) and has for the most part covered projects that are additional to, rather than replacements of, current services. One of the causes of this may be the way that the community has been engaged with. I think in general the community has been asked “what would you like to see improved?” Now this is a very different question from “what public services, which are currently delivered in the estate, do you think, could be delivered better by local residents, if they were being paid for it?” And better still “are you aware that currently different public sector organisations collectively spend x hundred thousand a year providing this service, do you think we could get a group of residents to decide how to spend that more effectively and deliver it for less?”

Lesson # 5 have you identified revenue that you can deliver i.e. have a budget for your community.

So we became one of the NCB pilots and this was one of the catalysts for the creation of White City Enterprise. WCE has now been established and we are busy getting the long term business plan finalised and at the same time taking on the delivery of services. Immediately we are fortunate in having revenue. In our case we have three income streams and a number of others in the pipeline. The three income streams are: Firstly, we are taking on the running of the community centre – this will gives us meaningful turnover. Secondly, we will be administering the Big Local grant of £2m. Thirdly, we are going to be running a parenting network which is being jointly funded by DCLG and LBHF.

Lesson # 6 think about marketing – residents and council staff need to be certain who to turn to

Something we didn’t predict was the potential confusion over branding and marketing. The NCB work has involved a lot of very successful marketing and branding led by staff within LBHF’s communications team. There is a regular fanzine, active presence on Twitter and Facebook and a new website about to be launched, all under the newly created brand of “Team White City”. We now need to decide whether to push our own “White City Enterprise” brand, work with the “Team White City” brand or possibly even take over that brand, something that will require delicate negotiations with the council. There is a danger that we become like the People’s Front of Judea in Monty Python’s Life of Brian, competing with the Judean People’s Front, rather than doing anything for the people of Judea!

Lesson # 7 have a clear process for determining which services to target

The next step for us will be to work closely with local statutory bodies, in particular LBHF to identify those services that lend themselves to being delivered by the community. This is going to require us to take a more systemic approach to ranking those services, that the council and other agencies deliver, that are best placed for community delivery. To do this we need to understand, in more detail, the capabilities of the community, but more critically have a way of scoring council services so that we can quickly assess which to target. We need to do this in partnership with the council and I know that services with the following criteria will be attractive to us:

1. There is duplication across public sector bodies
2. There is a willing commissioner
3. They are not already contracted out on a long term basis
4. The skills required to deliver are present in the community
5. TUPE will not eliminate employment opportunities for local people

Lesson # 8 work in partnership – don’t threaten through the Community Right to Challenge.

When the Community Right to Challenge (CR2C) legislation first emerged we thought this was helpful for us in the White City. Our thinking now has changed slightly and in our view the CR2C is extremely helpful, in that it has substantially raised the debate about communities delivering public services. We have quickly realised though that, unless we work as a true partnership, with the council, we are never going to win the right to deliver services. In fact the moment we start exercising our right to challenge we should probably realise that is the time to step away.
We have a mountain ahead of us but I hope that over the coming months we will build our credibility and capability to such an extent that it will become a default position, within the council (and other local public bodies) that whenever they are considering service delivery strategies that they automatically ask… “Couldn’t the community deliver this?”

We are not there yet but the signs are good and it promises to be a fascinating journey, on which regular updates will follow.

Giles Piercy
Chair, White City Enterprise
October 2013