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Accounting for Sustainability
Discussion Document

1 Sustainability Sustainability is (virtually) universally acknowledged as an essential principle of any human activity. It is acknowledged nationally and internationally: the UK government has a website devoted to sustainable development, and creating sustainable communities is the motto of the Office of the Deputy Prime Minister (which offers a definition of ‘sustainable community’); the European Union recommends sustainability, for instance through the European Sustainable Cities Report. In Higher Education in the UK, sustainability is acknowledged: in 2000, the HE Funding Councils of the UK established the Higher Education Partnership for Sustainability (HEPS), and in 2003, the DfES published a Sustainable Development Action Plan. Regardless of government policy, local communities have always sought sustainability, explicitly or implicitly; throughout the UK, local community associations almost automatically emerge when a community perceives its sustainability to be under threat (Leeds HMO Lobby, and its fellow members of the National HMO Lobby, are such associations).
1.1 Higher education institutions (HEIs) are always quick to draw attention to the positive contribution they make to the sustainability of the community. Universities UK has calculated the overall impact of the HE sector on the UK economy (UUK, The impact of HEIs on the UK economy, 2002). And the University of Leeds, for instance, notes that it is ‘one of the largest employers in the city, with 7,500 employees’ (UL, Housing Strategy, 2004, p2). However, such estimates overlook two issues. First of all, HEIs also make negative contributions to sustainability (they undermine it) – for instance, through the impact of their clientele, their students, on the character and amenity of neighbourhoods. And secondly, benefits and costs are not evenly spread, geographically – while a university may benefit a city as a whole, its costs may be borne by a very localised neighbourhood; in such local cases, the costs may far outweigh the benefits.
1.2 Communities always aspire to sustainability, whether or not they articulate this explicitly – they seek to flourish in ways which they can maintain. Community associations arise when this aspiration is frustrated - stadium campaigns and airport campaigns are examples, and so are the National HMO Lobby and its member groups, including Leeds HMO Lobby. These Lobbies were established to sustain their communities in the face of the detrimental impact of concentrations of HMOs (houses in multiple occupation) – principal instances of which are the shared houses of students attending HEIs [the Lobbies’ aims and actions are described on this website].

2 Accounting The conflict of interest between HEIs and their neighbouring communities has often led to quite bitter campaigns (because of the imbalance of power) by those obliged to live ‘in the shadow of the ivory tower.’ However, a shared concern for sustainability may provide an escape from the impasse. In particular, the publication by HEPS, Accounting for Sustainability: Guidance for Higher Education Institutions (Forum for the Future, 2003) perhaps offers a level playing field, on which reconciliation might be achieved (in the spirit of co-operative rather than competitive recreation): “the purpose of this publication is to provide an introduction to techniques that enable non-financial (i.e. environmental and social) considerations to be integrated into traditional financial accounts” (p3). In his Foreword, Sir Howard Newby notes “the objective is to give a clear and complete picture of the real costs and benefits arising from decisions about allocating resources – financial, human or physical ... higher education will need to be seen to be responding to a wide range of stakeholders on its sustainability performance” (p2).
2.1 Accounting for Sustainability identifies a number of ‘tools’ for understanding sustainable development (pp15-21). On the one hand there is the ‘triple bottom line’ of environment, society and economy. These are further un-packed as five ‘capitals’ (or stocks of resources), namely the natural (the ecology), the human (knowledge, etc), the social (communities, etc), the manufactured (structures) and the financial (money). On the other hand are the three manifestations of a HEI – as a centre for learning, as a business in its own right, and as a key member of a community. “Using the five capitals on one axis, and the three manifestations of a university on another, it is possible to map what the institution is doing to maintain, ideally enhance, but certainly not erode each of the five capitals” (p18). This provides a Sustainability Appraisal Grid (Fig 3, p19) with fifteen cells [Appendix, Table A]. “Completing and regularly revising a Sustainability Appraisal Grid is a useful starting point for a university or college that is considering using sustainability accounting techniques” (p18).
2.2 Accounting for Sustainability also identifies a number of ‘concepts and principles’ of sustainability accounting (pp22-35). These consist especially of the three dimensions of the Sustainable Accounting Cube (Fig 5, p23).
# The first dimension is the timing of impact, that is in terms either of stock (the state of the stock of goods and services at a moment in time) or of flow (goods and services arising over a period of time).
# The second dimension is the location of impact, internal (already within the financial accounts) or external (outside the traditional boundaries).
# The final dimension is the type of impact, that is whether it is environmental or social or economic (or natural, human, social, manufactured or financial).
Traditional accounting encompasses only a fraction of the scope proposed by sustainable accounting (Fig 6, p23).

3 Mapping These tools and concepts provide a framework for the sustainability concerns which are common to HEIs and their local communities. HEIs and their local communities have a shared interest in the HEI’s impact as a member of that community on all forms of local capital, the environmental, the human, the social, the manufactured and the financial.
3.1 The National HMO Lobby has identified fifteen effects of the presence of a HEI – or more specifically, of its clientele, its students. These fall into two groups [Appendix, Table B].
3.1.1 The first group comprises the increase of problems in a community, environmental, social and economic. The environmental problems include increased waste, increased degradation (of buildings and gardens) and increased street blight. The social problems include increased antisocial behaviour, increased crime (especially burglary) and thus increased insurance costs. The economic problems include distorted retail, fluctuating markets and casualised employment. Impacting across the board are transport problems (increased parking especially) and increased demand on public services.
3.1.2 The second group of symptoms consists of the decline of the community itself – the decline of the numbers of residents, the decline of their social networks, and the decline of their morale. All are exacerbated by the decline of schools and similar supporting services.
3.2 The Lobby’s fifteen effects may be mapped onto the fifteen cells of the Sustainability Appraisal Grid, in particular cells 3, 6, 9, 12 and 15 [Appendix, Table C]. This is where sustainability is eroded. This is where account must be taken of the negative impact of a HEI on sustainability.

4 Costing Some of the impacts of a HEI are readily costed (such as local cleansing costs). Some impacts are measurable, but difficult to cost (such as burglary rates). And some of the effects are hard even to measure (such as the loss of community spirit).
4.1 The increase in problems of a community (3.1.1 above) are mostly tangible, and therefore mostly readily measured. These impacts comprise the following.
i. waste increase: problems of normal waste disposal, of recycling, of large waste, of street cleansing, of garden clearing, and so on; Refuse and Highways Departments could provide cleansing costs for most of these.
ii. degradation increase: both neglect of houses and their gardens, and also loss of character through inappropriate development of buildings and hard-surfacing of gardens; a formula might be devised for the reparation of the former, but the latter is hard to measure, let alone cost.
iii. street blight increase: the impact of letting boards and security grilles, of flyposting and graffiti; removal of the latter can be costed, but again, the impact of the former on the character of the area is hard to measure (as is taxi disturbance, another blight on the street).
Note on (i-iii): the costs of tackling increased squalor include not only the investment of public resources, but also the voluntary (unpaid) efforts of both residents and students.
iv. antisocial behaviour increase: endemic low-level ASB, like noise nuisance, minor vandalism and evacuation (rather than serious ASB); the effect is all too tangible, it can be monitored, but it is hard to cost.
v. crime increase: primarily burglary, which is measured by crime statistics, and presumably could be costed, both in terms of police time and of property stolen.
vi. insurance increase: the insurance industry could presumably provide data on increased premiums for houses, contents and vehicles in specified postcodes.
vii. retail distortion: orientation towards a very specific market, manifest in the particular range of lines in shops, and the range of retail outlets (especially increased numbers of pubs, take-aways and letting agencies); the impact of the market is aggravated when rent rises force out other enterprises.
viii. market fluctuation: enormous fluctuation between heavy demand during term, and minimal demand during vacation.
ix. employment casualisation: local employment becoming increasingly seasonal (term) and part-time (evening).
Note on (vii-ix): such local economies are effectively ‘resort economies’, with a number of peculiar characteristics: they are ‘hermetic’ (both patronised and serviced almost exclusively by the student population); they depend on a continuous externally supplied market; and their profits are largely exported (rather than locally circulated). This entails a significant cost to the local economy.
x. parking increase: car use is measurable; in Leeds, one study has shown that car ownership in student households is two-and-a-half times the norm for the city. This raises health & safety issues (obstruction of pavements for pedestrians, and of access by cleansing and emergency vehicles), as well as communication problems (access by residents, and the passage of public transport).
xi. demand increase: this includes not only the direct costs of disproportionate demands on public services like cleansing and policing, housing and planning, but also indirectly the drain of resources away from provision in other areas[and neither students nor landlords pay Council Tax or Business Tax].
4.2 The decline of the community (3.1.2 above) is quite intangible, and not readily measured at all. As Accounting for Sustainability suggests (p30) such matters are perhaps “beyond value”. This impact comprises the following issues.
xii. numbers decline: student demand gives rise to high property prices and low amenity (4.1), encouraging emigration and making immigration almost impossible, with the result that there are fewer elders (retaining past memories), fewer adults (present activists) and fewer children (the community’s future).
xiii. networks decline: most owners and occupiers are absentees (hence disengaged), the young and the old especially are isolated (losing their peers), and the neighbourhood loses its social capital or ‘community spirit’ (its social networks, social norms and social sanctions).
xiv. morale declines: deep and rapid changes are felt acutely: the population imbalance itself is stressful (public oppression, private isolation), the declining amenity is alienating (fear of crime, revulsion from squalor, exclusion by the economy), and residents feel anger and despair at their disempowerment.
xv. schools decline: the services which support the community (especially primary schools, also colleges, evening classes, churches, clubs for the young, etc) decline and even close.
4.3 Most impacts in 4.1 can be measured, and many costed. A few cannot – and nor can any in 4.2. These may be “beyond value” (monetary, at least). However, there are valuation techniques available. The United Nations recommends avoidance and restoration values (Accounting for Sustainability, p30).
4.3.1 Avoidance values These are what it would cost (or does cost) to avoid a detrimental impact (for instance, avoiding carbon dioxide emissions). The principal cost that can be identified in avoiding negative impacts by HEIs is the time this soaks up. A principal element of this time is the hours dedicated by local community campaigners to organising campaigns, organising meetings, attending meetings, circulating information, writing objections, responding to consultations, and so on. (Leeds HMO Lobby is an example, but its efforts are duplicated up and down the country.) Some HEIs employ Community Liaison Officers (with salaries); whether they do or not, other staff are drawn into dialogue, negotiation and planning. (The University of Leeds has a Community Projects Officer, a Neighbourhood Helpline, a Housing Strategy, and is consulting on a Community Strategy.) Local authorities bear responsibility for resolving local problems: members and officers devote time to addressing these; in addition, many authorities have conducted studies of the impact of HEIs locally, and have established fora to develop local strategies. (Leeds City Council has established a Student Housing Project Group, devised a Shared Housing Action Plan, convened a Community & HE Forum, and so on.) Student volunteers spend time on the effects of the impact. (In Leeds, they have set up the LS6 Project.) At one level, much of this time is spent fire-fighting. But at a strategic level, it is invested in attempting to resolve – hence avoid – the deeper issues. (In addition to local actions, national initiatives also absorb effort, like the National HMO Lobby, the Unipol conference Students, Housing & Community, and UUK’s Students & Community research [which reportedly cost £30,000].) This time could be calculated and costed.
4.3.2 Restoration values These consist of what it would cost to restore an unsustainable situation (for instance, restoring contaminated land). In the case of the negative impacts of HEIs (and especially the decline of communities), essentially these arise from demographic imbalance (the substitution of a stable, general local population by a transient, seasonal and very particular population). This comes about largely by the change of use of family homes into student HMOs. In a free market, this is impossible to avoid: groups of students are prepared to pay upwards of £50 per week for a room each; with this return in mind, landlords are able to far outbid family purchasers, when homes come onto the market. House prices are rapidly inflated. The incentive of these prices, and the disincentive of declining amenity, encourages further change of use. The restoration cost of the fundamental sustainability problems of HEIs would be the cost of re-purchasing houses, to restore them to family occupation. The National HMO Lobby estimates that the tipping-point for sustainability problems for a community comes when students exceed 20% of the population. Since the average occupancy of HMOs is twice that of the average single household, this is approximately equivalent to a tipping-point of 10% of HMOs in an area. (This is also the normal proportion of privately rented housing in a neighbourhood.) In principle therefore the restoration value of an unsustainable community is the cost of restoring the housing balance. [Leeds HMO Lobby puts the restoration value of Headingley at somewhere near a half £billion.]

5 Accounting for Sustainability Accounting for Sustainability notes “Environmental accounting has been under development for much longer so it can refer to a scientific validated baseline against which restoration and avoidance costs may be measured. However, a similar scientifically rigorous approach to social impacts (positive or negative) is in its infancy. For instance, there will be different views about how best to define acceptable (i.e. baseline) blight from close proximity to student accommodation. Nevertheless, work on metrics for accounting for social costs and benefits is underway, and universities, as institutions with major social as well as environmental and economic impacts, have an opportunity to contribute greatly through developing and trailing them (academically, as well as practically)” (p30). The National HMO Lobby intends this Discussion Document to be a modest contribution to the development of sustainability accounting by HEIs. For sustainability is the desired goal of HEIs and local communities alike. Local community associations, who comprise the National HMO Lobby, are pleased to recognise the contributions made to sustainability by the universities of the UK. But by the same token, the Lobby expects these universities to acknowledge their detrimental impacts, those effects which erode sustainability. HEPS’s Accounting for Sustainability provides a framework for them to do so. The National HMO Lobby calls on the universities of the UK to take full account of their consequences (both positive and negative) for the sustainability of their host communities.

APPENDIX

Table A: Sustainability Appraisal Grid

Table B: Fifteen Effects of HEIs
Increase of Problems

Decline of Community

Table C: HEI Sustainability Appraisal

AFTERTHOUGHTS
“Everything can be measured, and what gets measured gets managed,” McKinsey & Co.
“Not everything that can be counted counts, and not everything that counts can be counted,” Albert Einstein.

National HMO Lobby
January 2006

This Discussion Document was submitted to the Higher Education Funding Council for England on 21 August 2008, in response to HEFCE's consultation on Sustainable Development in Higher Education (2008/18).

National HMO Lobby
email: hmolobby@hotmail.com website: www.hmolobby.org.uk