Tag Archives: Bushbury

Pouring money down the drain

Fans of the Right to Transfer may have wondered where I’ve been these last many months, well the truth is that there hasn’t been much I could say.  The Right to Transfer (RTT) process at Bushbury Hill EMB has been in a holding pattern, hopefully I’ll have some more interesting news in the near future.

In the meantime there has been one useful clarification over the Right to Transfer process which I can give an update on.  The Department for Communities and Local Government have made it clear that any RTT application must fully cover the cost of not only the HRA debt attributable to the stock to be transferred, but the cost of any redemption premia if that debt is repaid early.

Attributable debt

Under HRA self financing all stock owning authorities in England have HRA debt.  For a partial stock transfer such as an RTT proposal, the a portion of this debt is attributed to the homes being transferred – this should be a fair proportion based on the condition, type and rents of the stock.  The purchase price paid by the landlord buying the stock has to be enough to cover repayment of this attributable debt.

Debt Repayment Premia

However, if the local authority intends to use the transfer proceeds to pay off the attributable debt then it will incur debt repayment premia – they have to pay for the loss of interest that would have been due if the debt was not repaid early.  For a tenant group to have a business plan approved by the HCA it will have to demonstrate that the price paid to the local authority will be enough to cover the attributable debt plus any premia.  There is no Government funding available to assist with any shortfall.

Money down the drain – why pay interest twice on the same capital?

It is safe to say that stock owning councils have HRA business plans which involve borrowing money in order to invest in their homes or build new ones.  You may be wondering why any local authority would therefore want to send any capital receipt from transfer and send it to the Treasury instead of putting it to good use in their community. Doing this means that they end up paying two lots of interest on the same amount of capital – the debt repayment premia on the attributable debt and then interest on new borrowing for the same amount to support their HRA business plan.  It creates an unnecessary transfer of  money from the local authority to the Treasury . This money is no longer available to invest by the council, which is effectively pouring its tenants’ money down the drain.

Can’t you think of anything better to do with the money?

Small

The real reason for a local authority to say that it wants to repay the attributable debt is to drive up the cost of the transfer in an attempt to stop tenants exercising their statutory Right to Transfer.  However in light of the housing crisis, building some new homes would be a better use for the money.

Clarity is a good thing

It would be better if DCLG required local authorities seeking to repay attributable debt to demonstrate they had no borrowing in their HRA business plan and therefore no use for the capital receipt.  On the plus side, at least tenants now have a clear position form which to work, in order to make an RTT proposal fly they will have to ensure that they can come up with a business plan which will cover the attributable debt and debt repayment premia.  It is the fate of Bushbury Hill EMB as the pioneer of the Right to Transfer to iron out all the wrinkles in the process and hopefully make things clearer, if not easier, for other tenant groups in future.

 

Democracy delayed is democracy denied

There will be a general election in May 2015; we know this because the current Parliament only has a mandate from us until that date. How would we feel if MPs attempted to carry on ruling without an election? Jolly cross, to say the least, we wouldn’t take it lying down. We don’t really do revolution in the UK, but Charles I was the last leader who tried to rule without the consent of the people through the ballot box and he ended up with his head in a basket.

Although the people of Scotland rejected independence in the 2014 referendum, it was fairly universally accepted that it was their democratic right to decide the matter. The SNP had a popular mandate to hold the referendum so any attempt to thwart this would have had serious political, legal and constitutional consequences.

Unfortunately the tenants of Bushbury Hill have had their legitimate aim of holding a ballot on tenant led stock transfer held up for close to a decade now. The chance to decide their future for themselves is all they ever have asked for.   The tenant board are elected by the tenants and have pursued transfer with the express support of their community. Over the years the EMB has repeatedly sought the approval from tenants via tests of opinion, consultations and votes at general meetings.

As we approach the anniversary of tenants serving the local authority with a Right to Transfer notice, tenants are quite rightly asking “when will I be allowed to vote?” They might well look at their fellow tenants in Gloucester, Salford and County Durham and think it unfair that they have all had the chance to vote on transfer, in spite of starting the process after Bushbury Hill.

It is my view that whatever the philosophical objections for opposing the tenants’ transfer proposal, it is unsupportable to delay the ballot a moment longer. The tenants of Bushbury Hill are ready to vote, they have the legal right to vote, so let them decide.

Bushbury Hill information house

Want to know what tenants want? Try talking to them

Bushbury Hill information house

Bushbury Hill information house

As part of our Right to Transfer process in Bushbury Hill we have recently opened what we call our Information house on the estate. Open five sessions a week, including evenings and Saturdays it offers every tenant a chance to come and chat to us about the transfer proposal. It also gives us the chance to find out from tenants which of our proposed improvements they would like to choose and if they will need the back garden fencing programme.

Tenant can choose a new fire suite

New fire suite

Don’t take offence

We know exactly what tenants want because we pounded the streets and asked them. Because our estate is nearly all houses with large gardens, three quarters of tenants need new fencing. It may seem a minor issue, but a decent fence means you can enjoy your garden in privacy and security. By and large tenants rub along just fine, but unwanted intrusions by next door’s dogs and or children can quickly grate. If you have a 100ft garden as many in Bushbury Hill do, the cost of fencing it yourself is many hundreds of pounds. Many of our tenants simply do not have this kind of money.

Ask and then listen…

It is this personal interaction with tenants that has given the board such a good understanding of the needs of our community and shape the transfer proposal accordingly. It may seem to be obvious, but if you want to know what your tenants want from the Right to Transfer (or anything else) then a conversation is the best way. This involves not just asking questions, but also listening to the answers and capturing them in a way that can be used. We have a very simple survey that we are using.

…Or not

Being led by the needs and wishes of our tenants is in our DNA as a tenant led organisation but it does beg the question, why would any landlord want to do otherwise? What I really cannot understand about the local authority’s opposition to transfer is that they have never taken the time to talk to the tenants in Bushbury Hill about the issues. How a local authority can possibly reach a meaningful conclusion about what is in the tenants best interests without engaging with the tenants is beyond me.

Right to transfer offers written by councils that oppose them? This is illogical.

The current statutory guidance on consulting tenants about a housing transfer was published in July 2009 and takes no account of tenant led schemes under the Right to Transfer (RTT) which had been enacted in 2008 but not implemented by regulation until December 2013. This means that the Offer Document to tenants is the responsibility of the very council that opposes the tenants’ wishes which is illogical.

The 2009 guidance states:

Tenants need to understand why the local authority is proposing to transfer their housing (Annex 1, Para.9)

However in RTT cases the council is not proposing the transfer, in fact they are opposed to it. This internal contradiction demonstrates why it makes no sense for the Offer to come from the council.

Just as the housing transfer manual has been re-written to acknowledge the tensions inherent in RTT and transfer some responsibilities from councils to the tenant group, the guidance on tenant consultation similarly needs to be updated.

RTT is a tenant led process, the proposal to transfer is that of the tenants, not the council and so the Offer should be produced by and from the tenant group. To get to offer stage the tenants have already complied with a regulatory framework and the RTT statutory guidance, they can just as well comply with the guidance at consultation stage.

The substance of 2009 guidance is still sound, I don’t think it would take much to update it to include tenant led transfers and make it clear that the offer belongs to and comes from the tenants with the accompanying duty to take proper account of the guidance.

Being a trailblazer means having to work with the existing structures, even if they are no longer quite fit for purpose. Whilst this is not always easy, it does flag up those issues that need to be addressed so that RTT can work properly. So let’s hope that future RTT have a new version of the guidance that empowers tenants.

When choosing a partner, choose a good ‘un

I reported earlier that the tenants in Bushbury Hill had chosen Wrekin Housing Trust as their proposed transfer partner.  Is it serendipity or good judgement that their choice has just won a best landlord award at the recent UK Housing Awards? They won in the Large social landlord of the year category. My boss doesn’t like this picture but as she didn’t blag me an invite…

Wrekin Housing Group at the UK Housing Awards

Wrekin Housing Group at the UK Housing Awards

I’m not suggesting that tenant groups looking for a transfer partner base their invitations on the shortlist of various awards, this certainly wasn’t a factor our Board were even aware of when selecting potential partners.  However performance, regulatory rating, financial stability and reputation are all relevant factors.  We asked Wrekin to take part in our selection process based on our good experience of working with them over a number of years.

The alternative to invitation is to have a completely open process and run it more like a tender, this has merits as you will reach a wider pool of potential partners and may unearth a hidden gem.  I know that LATMOS (in Lambeth, London) ran an open beauty contest and this generated considerable interest.  They chose to join WATMOS who are based in Walsall, so this shows that the best fit is not always on the doorstep.  The beauty contest has merits, but does require more time than Bushbury Hill had available.

However tenants make their choice my advice to groups using the Right to Transfer who want to transfer to a partner to be clear about their long term objectives and priorities and make this the basis on which they shortlist potential partners.  Tenants are not beholden to choose the highest bidder, finding the best fit for your group involves more than looking at the bottom line.

 

Choosing a transfer partner

The tenant Board at Bushbury Hill EMB have been pursuing stock transfer for at least a decade now, so no-one could accuse them of rushing into things.  However, the very small window for the current stock transfer programme means that things are currently moving at a very fast pace.  The Board has had a long time to work out what it wants to achieve with transfer, so it was not necessary to have a long and protracted partner selection process.  Choosing a transfer partner has been breathless for all concerned, but a choice has now been made and I’m confident it is a good one.

Blind Date or Invitation Only?

There is no requirement for tenants using the Right to Transfer (RTT) to hold a beauty contest when choosing a potential new landlord; the choice is theirs to make.  Assuming they want to join an existing housing association then it open to them to decide on a partner and proceed from there.  As discussed in an earlier blog, for tenant groups with few resources, getting a partner on board at the start my be the best way to make the RTT possible and there is also scope for housing associations to approach tenant groups with an offer.

However, there are clearly benefits to introducing some competition to the process as potential partners are likely to make their most generous offer.  The decision we had to make was whether to have an open process, or to invite selected HAs to take part.

Our Board decided to go with the “invitation only” approach.  They wanted to be sure only to approach organisations that were a) relatively local and b) that they would be comfortable working with.  There was also a consideration of time and resource pressure; it would have been hard for a small organisation to cope with an “all comers” process.  It was hard enough with six invitees, if  we’d had to field enquiries and visits from many more it would have been quite disruptive.

The assessment would have become unwieldy with more participants.  Board members had to analyse and consider each 30 page submission against our requirements.  It would have been a big ask of volunteers to do this for many more potential partners in the short time we had available.  Once the written submissions were assessed by the Board, this produced a short list of two who were invited to take part in the final stages of the selection.

Showcase to tenants

The next step was a showcase event giving tenants the chance to see what each potential partner was offering and to ask their own questions.  We held this event on a Saturday as this meant the majority of tenants would be able to attend, even so I was a little worried no-one would come.  In fact we had a respectable turnout and those tenants who came seemed to find it a useful exercise.  One thing I was surprised about was the length of time most tenants spent talking to the two organisations, having taken the trouble to come, they wanted to get the most out of it.

Tenant feedback

Crucially, in order to make it meaningful for the Board, we asked attendees to complete a simple response sheet, telling us what they liked about each potential partner and any other comments.  Without this feedback the showcase  would not have helped the Board in the selection process.  In fact we had lots of really good feedback from tenants, mostly positive about both potential partners.

One tenant was upset that he was not personally involved in the entire partner selection, but it would have been impractical to say the least to have a selection panel of c.1200 tenants.  To assess detailed and technical bids was hard work for our experienced tenant Board members, there would be no sensible way to include all tenants in the same way.

Visits

Prior to the final decision, the Board visited each of the potential partners to give them an opportunity to demonstrate some of their good work on the ground.  These visits were very pleasant and gave the Board the chance to meet more staff and tenants from each organisation.

It was quite tricky for them to make the best use of these visits as they needed to show things which would be relevant to Bushbury Hill post transfer.  It is fair to say that one visit was a lot better at highlighting the added value that would be available to Bushbury Hill from joining that organisation.  This wasn’t make or break, but it showed the benefit of really focussing your message on what is most important to those assessing the bid.

Presentation and interview

This was the last stage in the process and along with the written submissions, carried the greatest weight.  Board members set the interview questions and scored the answers, it was really important to them to make clear that this was a tenant led process .

For the presentation the Board asked the potential partners to consider how to help BHEMB address the social and economic challenges in Bushbury Hill in the long term.  This is pertinent because the homes are now in pretty good shape and will remain so if transfer goes through, but the other challenges that face our community remain.  We also asked how they would try to deliver a “Yes” vote in the transfer ballot – we’ve never been through it, they have, so we wanted to have some good ideas and a clear plan for involving the community

A note on scoring

There are lot of ways to do this, in the end we decided that whilst each Board member would score individually, the final score for each element or question would be a consensus score.  This is more involved than simple averaging, but the downside of averages is that outliers can significantly affect the results.  With an agreed score, people have to opportunity to discuss different views and analysis.  We had some questions where one person scored 1 and another 5, by allowing each to explain their reasoning any misunderstandings could be identified and the group could work through to reach a consensus.  No scoring system is perfect, but I think this method produced fair and accurate results.

Decision time

I don’t know what the final discussions were as the Board took this decision with no officers present.  They had two excellent options, so there wasn’t right or wrong option.  They chose Wrekin Housing Trust as their stock transfer partner.

WHT’s proposal was excellent and offers:

  • long term security of tenant control in Bushbury Hill,
  • an excellent financial offer,
  • added value in terms of new services,
  • will help us address social and economic challenges
  • provides new homes and stock diversity
  • opportunities for BHEMB to grow

All we have to do now is win the ballot…