Tag Archives: council

The Tory Right to Buy for HA tenants is fundamentally unfair

Mad Hatter's Tea Party

“Sell council houses to subsidise HA RTB sales? And I though I was mad.”

Part of me thinks that this election proposal to extend the Right to Buy (RTB) to housing association (HA) tenants is actually an admission by the Tories that they have no chance of winning a majority in this election.  In this case there is nothing to lose by floating crazy policies which you know have no chance of ever getting through coalition negotiations.

An unfair transfer from poor to rich

However, on the off-chance that they are serious, there is a serious unfairness at the heart of the proposal which will see the poorest communities subsidising the better off.  The money to pay for the policy is meant to come from selling off council houses, but only a minority of local authorities still own any housing stock – about 100 out of 326 English authorities.  This means the entire burden of funding a national policy will fall on this minority.

This would be bad enough in its own right, but if you consider the disparity between the LAs that own stock and those that don’t, it is actually much worse.  This is because the LAs who retain their council homes tend to be those urban and with more deprived communities and those who have no stock are on average leafier boroughs or rural, with wealthier populations.

If all HAs are to be reimbursed for the RTB discounts, this means that the money for HA sales in LA areas with no council homes has to come from outside the area – from LAs that do own stock.  On average this will see a transfer of assets from already poorer areas, to already richer ones.

Beggar Wolverhampton to help Elmbridge

Esher, Elmbridge Borough, Surrey

Esher, Elmbridge Borough, Surrey

For example, Elmbridge in Surrey a very pleasant place and typified by high incomes and very high property values, transferred its own council houses, so has nothing to lose from this policy.  However if an HA in Elmbridge sells a home through this RTB scheme, it will get reimbursed the full market value (likely to be a large sum) by the Government, so be well placed to build a replacement.  But how is this to be paid for?

Heath Town estate, Wolverhampton

Heath Town estate, Wolverhampton

In order to give money to the HA in Elmbridge an LA that does own stock will have to sell some homes.  For example, a place like Wolverhampton, one of the most deprived parts of the country, where the council owns lots of homes but is characterised by low property values.  Even the smart parts of the city don’t command huge house prices and on a typical housing estate a  nice modernised 3 bed semi might only be worth £75,000-£100,000 on the open market.  How  many of these homes would poor Wolverhampton be forced to sell in order to send money to wealthy Elmbridge?

No such thing as a free lunch

nofreelunch-200x200

The Tories want a free lunch on RTB, but it will actually come at a real cost to some of the poorest in society.

Let’s not forget that you cannot simply sell council homes and use the whole receipt to fund the scheme.  There is attributable housing debt attached to all council homes which would have to be repaid, early repayment also attracts an additional cost.  The selling LA would also suffer loss of future income which would need to be recompensed or risk detriment to the current tenants.  The net receipt would therefore be far lower than the sale price.

In the example I have used, Wolverhampton could well lose two council houses to fund RTB discounts in Elmbridge which would see little net loss in affordable housing.  It is hard to see how this is anything other than a regressive redistribution of wealth from the poor to the rich.  Not only is the Tory proposal a bad one, it is also grossly unfair and will tend to increase inequality.

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.

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.

Tenant led application to HCA

The newness of the Right to Transfer (RTT) means that all involved are feeling their way through to a certain extent.  This means that some of the well understood processes for large scale voluntary transfers are having to be rethought.  One example of this is the formal submission of a transfer proposal to the Homes and Communities Agency (HCA).

To date LSVTs have all (nominally) had the support of the local authority concerned.  It was therefore logical that the council make the application to the regulator.  With RTT the local authority is not in favour of the transfer and may be actively hostile.  It was therefore anomalous that the application pro forma in Annex A to the March 2015 Transfer Manual only allowed for applications with the support of the local authority.

Whilst councils involved in a RTT situation would be likely to comply with their statutory obligation to co-operate with the tenant group exercising the RTT, it was still odd that the elected members would have to pass a resolution giving support to a proposal that they did not believe in.  From the tenants point of view it was also a potential stumbling block which would allow their council to obfuscate or delay the process.

This situation has been resolved by a common sense approach from the HCA who have come up with a RTT version of the Annex A pro forma where the application comes from the tenant group.  This is eminently sensible and puts control where it should be – with the tenants.  The requirements and need to make a strong case for transfer are still there, but it is for the tenant group to make the case.  This is great news for Bushbury Hill EMB due to the tight timescale we’re working to, but will also make things clearer for other tenant groups in future.

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…

Could housing associations proactively use the Right to Transfer?

The push for the creation of a statutory Right to Transfer (RTT) undoubtedly came from tenant management organisations (TMOs) stymied by uncooperative local authorities.  It is no surprise therefore that it is TMOs in the vanguard of the first wave of RTTs. However there is nothing in the RTT regulations that requires tenants to be part of a TMO, all council tenants in England have the right.

What do you need to get started?

All you need is a “Tenant Group” with a written constitution and a membership of 20% of the tenants in the area concerned.  The area in question must be “geographically coherent” (no pepper potting allowed) and contain at least 100 secure tenancies.  This is hardly an onerous starting position, particularly as many areas will have a tenants & residents association that may already meet the requirements or be able to do so with a bit of a membership drive.  So there are hundreds of tenant groups who could potentially avail themselves of the RTT.

Fine in theory, but it’s going to cost you

Having the RTT is great, but in practice it requires quite a lot of money to go through the process.  If there are hundreds of homes involved then something as simple as a mail-out to every tenant will cost hundreds of pounds. If professional advice is taken – and it is almost certainly needed then this will cost thousands.  Tenants may be able to obtain Tenant Empowerment Programme funding from DCLG and which is very helpful, but is won’t cover all of the costs.

In Bushbury Hill, being a well established TMO we have a lot more resources in terms of staff, equipment, access to information, office space, and money than a  tenant & residents group would have.  We are in a position to commission a stock condition survey and structural survey, which would be impossible for other tenant groups.  It is very unlikely that a council that is not keen to transfer its stock is going to start paying for anything it is not required to.

So who else will pay?

Who has both the operational expertise and financial clout to be able to help tenants make their vision a reality?  This seems an ideal opportunity for enterprising housing associations to get in on the ground floor and help tenants drive RTT proposals.  There is nothing in the regulations to stop a tenant group making its proposed new landlord choice up front and then using the resources of that landlord to get through the RTT process.  The housing association would be operating at risk, but then that is always the case with stock transfers and the sums involved, whilst out of the question for tenants, are not huge for a housing association.  There are clearly advantages to both tenants and the new landlord in going through the process together – it allows for the building of relationships and trust prior to the all important transfer ballot.

Have we been here before?

Those with long memories will note the similarities with “Tenants Choice” brought in by the Housing Act 1988 which allowed tenants to pick a landlord.  At the time this created a lot of fear amongst local authorities that housing associations were going to cherry pick their best stock.  In reality very few transfers ever took place in the seven years it was active – in England & Wales it amounted to five transfers involving only 1470 homes (Derrick Tulloch, 2000).  However it did indirectly lead to a massive increase in  whole stock voluntary transfers, as well as an increase in tenant activism and the Right to Manage.  The threat of losing their stock to other landlords also acted as an stimulus for some council’s to raise their game and engage with tenants seriously.

Opportunities for enterprising housing associations

Unfortunately, 18 years after Tenants Choice was killed, there are still council landlords who provide rotten service and allow tenants’ homes to remain non-Decent (a scandal in itself).  Not only does this give tenants every reason to look for a better landlord, but surely provides opportunities for enterprising housing associations to offer to partner with tenants to use the Right to Transfer to deliver proper investment in their homes and a high performance housing management service.

No doubt there are housing associations out there with a good reputation with tenants, operating in localities where council tenants are putting up with a third rate service from their council.  RTT opens the way for them to approach tenants direct and proactively make a pitch.  The housing association could offer to support a tenant group to build up membership, campaign for support from their community and support tenants through the RTT process.

The tenants may have everything to gain and the housing association can achieve growth with relatively little risk.  Local authorities may still view it as cherry picking, but they’ve had a couple of decades to get their own house in order, if some have failed tenants in this time then shame on them.

PS this blog is written from a personal perspective and is entirely unofficial, albeit that I work for an organisation that is currently going through the RTT process.  What I write is opinion and I make no apology for having a pro-tenant slant, working directly for tenants will do that. I do however aim to be factually accurate, so if you do come across any mistakes in my posts, please let me know and I’ll check and update as necessary.  All comments and feedback and are welcome.