It’s difficult to know where to start with this rather complex story. Maybe we should go back to 2008 and the Welsh Housing Quality Standard, presented as an attempt to improve the standard of social housing. The WHQS was in fact nothing more than the Decent Homes Standard that operated in England. Another example of ‘Welsh’ legislation being just renamed and repackaged English legislation. Though in this instance, there was one very important difference, to be found in this National Assembly document, which says . . .
If the ‘Welsh’ Government can fund housing associations and also fund councils that retain their housing stock, then surely it can find the money for ALMOs? To argue otherwise doesn’t make sense. Limiting the choice to those options might make sense though to those in the social housing sector who saw WHQS as a weapon that could be used to get local authorities to hand over their housing stock. But do housing associations really exert such influence?
Well, consider this. The umbrella body for housing associations in Wales is Community Housing Cymru (CHC). From July 2006 until July 2014 the group chief executive of CHC was Nick Bennett. Prior to that he’d been a Spad for a few years until October 2002 and in between he’d been a director of Cwmni Cyfathrebu Bute Communications. Another director of this long-defunct company was Alun Davies, who had not long before switched his political allegiance from Plaid Cymru to Labour, and would be elected as a regional AM in 2007.
So Nick Bennett was in business with a rising star in the Labour Party – who’d already stood for the party in Ceredigion in the 2005 UK election – and this would have done him no harm when he applied for the post of group chief executive of Community Housing Cymru in 2006. Bennett’s strong links with ‘Welsh’ Labour also explain why he got the job of Public Service Ombudsman for Wales in July 2014.
In addition, many housing associations, particularly in the south, are stuffed with Labour Party members and supporters, and the party goes out of its way to help these associations. A recent example would be the takeover of Cantref by Wales and West. I’ve written about this disgraceful episode a few times, my posts can be traced back from Cantref: ‘Welsh’ Labour Takeover Challenged?
Cantref is a housing association based in Newcastle Emlyn, operating in a bilingual area with bilingual staff. It hit a rocky patch and a scavenger soon appeared in the form of Wales and West Housing, whose chief executive is Anne Hinchey, wife of Cardiff Labour councillor Graham Hinchey. Business is now conducted in English only and ‘Welsh’ Labour has an important beachhead in an area where it has very little electoral support.
The latest example of the influence housing associations exert over the Labour Party and its ‘Welsh’ Government comes with the news that, “In September (2016), the Office for National Statistics (ONS) announced housing associations should be considered part of the public, not private, sector. But the Welsh Government promised to take “whatever steps are necessary” to reverse the change, following concerns.”
The key to understanding what’s going on here is, firstly, that these “concerns” come from housing associations and their umbrella organisation Community Housing Cymru. I am not aware of anyone – other than CHC’s fifth column inside the ‘Welsh’ Government – who believes that housing associations becoming public bodies is a bad thing.
The reason given for opposing the ONS initiative is, “Community Housing Cymru (CHC) said it could affect their (housing associations) ability to borrow money and to build new homes.”
Let us look at the first of those claims that, if reclassified as public bodies, housing associations would find it more difficult to raise private funding. Which suggests that housing associations are now borrowing considerable sums from banks and other financial institutions. But are they? In my investigations into housing associations I have found little evidence that they rely on commercial loans. So where does housing associations’ income come from?
The largest and most obvious source of income is rents from their housing stock, most of which they inherited from local authorities. Yes, these properties have to be maintained and improved, up to Welsh Housing Quality Standard, but as we’ll see below, the ‘Welsh’ Government – i.e. you and me – pays for it all! And there are other funding streams, as I explained in Housing Associations – The Great Deception. (Nov 17, 2015.)
As I said back then, “One of the facts unearthed is something called Dowry Gap funding, paid to certain housing associations for them to use in upgrading the housing stock they’ve inherited from councils under voluntary transfer (i.e. through a vote by tenants). This funding is currently being paid to ten housing associations and in 2015 – 16 the total cost will be £43.8m. Tai Ceredigion Cyf’s ‘Dowry’ will be paid at the rate of £1.6m a year for 30 years. If this 30-year term applies to the other, larger housing associations, then the total cost will be £1.3bn.
This Dowry Gap funding seems to complement the Welsh Housing Quality Standard legislation, which demanded that all RSL properties be up to WHQS standard by 2012. This deadline – and its funding of £108m a year – has now been extended to 2020. Introduced in 2004 and running to 2020, £108m a year totals up to £1.7bn.
Adding the two we get a total figure of £3bn for ‘improvements’. Seeing as Wales has 143,790 RSL properties, this works out at almost £21,000 per property! (Is this right? Will somebody please check the figures.) That is a lot of moolah for windows and doors, especially when we accept that many of the dwellings inherited from local authorities were in good condition, certainly not needing ‘refurbishment’ to the tune of 21 grand per property.”
Another lucrative source of ‘Welsh’ Government funding for housing associations is the Social Housing Grant. The latest figures I have tell us that between 2008 and November 2015 £771,708,622.59 was paid in Social Housing Grant.
We are talking billions of pounds of public funding going into social housing. Perhaps four billion pounds by 2020.
The second part of housing associations’ objections to becoming public bodies is that they claim it could affect their ability “to build new homes”. Why? They’d still have the income from their rents, and they’d still receive public funding. This claim is just baseless scaremongering done to hide the real objections those running our housing associations have to them becoming public bodies.
As things stand, housing associations, or Registered Social Landlords as they’re also known, have the best of all possible worlds. They operate as private companies, but with massive advantages over what we would normally consider to be private companies.
To begin with, most of them inherited their housing stock for nothing when council tenants were given a vote (often after receiving misleading information). Then, as I’ve just explained, they receive staggering amounts of money from the public purse, despite, with their assets, being able to raise private funding just like other businesses. Being registered as Industrial and Provident Societies with the toothless Financial Conduct Authority means that they are not covered by the Freedom of Information Act – yes, despite all that public funding! Finally, oversight and monitoring by the ‘Welsh’ Government is non-existent.
This last fact explains how we can have a situation in which a publicly-funded RSL like Pembrokeshire Housing can set up and fund a subsidiary, Mill Bay Homes, for it to build and sell homes on the open market to retirees and investors (with of course Mill Bay Homes having an unfair advantage over independent house builders in the county).
When Pembrokeshire Housing will get back the millions of pounds it is has ‘loaned’ to Mill Bay Homes is anyone’s guess . . . but why should you worry when nobody in the ‘Welsh’ Government seems in the least concerned by this bizarre arrangement. I have written about Pembrokeshire Housing and Mill Bay Homes many times. Work back from Welsh Social Housing, A Broken System (Oct 23, 2016) to Mill Bay Homes and Pembrokeshire Housing 2 (June 14, 2016).
Those of you who enjoy a good read should settle down with this report into the workings of the Pembrokeshire Housing Group compiled by a concerned member of the public. (No, not me.) It has been circulated to interested parties, too many of whom seem to believe that if they whistle and look elsewhere the embarrassment will disappear.
But there are so many other problems with housing associations.
The most recent stock transfer seems to have been in Gwynedd, in 2010, when the council transferred its housing stock to Cartrefi Cymunedol Gwynedd (CCG). Among the first things CCG did was to hand over the maintenance contract for its properties to English company Lovell, which then brought in sub-contractors from north west England. I saw this first-hand in my village, and wrote about it in The Impoverishment of Wales (Aug 26, 2014).
Another issue I recently unearthed was that of housing associations leasing properties from shady offshore companies, the biggest of which is called Link holdings (Gibraltar) Ltd. I wrote about it in a piece entitled, unsurprisingly, Link Holdings (Gibraltar) Ltd (Oct 10, 2016). Equally unsurprising is that the ‘Welsh’ Government’s civil servants don’t want to talk about this scandal, ‘All a long time ago . . . leases taken out by previous incarnations . . . stop bothering us’. But nothing changes the fact that Welsh housing associations in 2017 are putting a lot of public money into companies hiding in tax havens. Should public money be used in this way?
A long-standing problem with housing associations, perhaps more visible in rural areas, is that in order to appear busy, to pretend there’s a demand in order to keep the funding coming, they will often bring into Wales misfits and petty criminals. This was certainly an issue with Cantref. Note the reference in the information below to “young tenants from the hostel”. I’m told that Cantref brings in from England young tearaways and within a very short time extended families of scruffs and roughs are wandering Aberteifi. Other housing associations do the same, because it pays well.
One of the worst cases in recent years was the gang of paedophiles and rapists housed in Kidwelly by Grwp Gwalia. I wonder how much Grwp Gwalia was paid to inflict these creatures on a small Welsh town? Were those responsible ever reprimanded or sacked? Did Grwp Gwalia compensate the victims?
It was in attempting to get information on this case that I realised housing associations are not bound by the Freedom of Information Act. Because when I asked for details a door was slammed in my face . . . a heavy and expensive door paid for with public money.
Finally, before leaving this section, let’s ask ourselves exactly who is complaining about the ONS proposal to make housing associations
open and honest public bodies? Well we can be sure that the minions employed by our RSLs don’t have a direct line to Stuart Ropke, Nick Bennett’s successor as Group Chief Executive at Community Housing Cymru. The opposition is coming from much further up the food chain.
From people like the £150,000 a year chief executive of RCT Homes. After that bit of bad publicity RCT Homes rebranded itself as Trivallis. Most people in the Central Valleys are still trying to figure out what Trivallis means, and how much it cost to change everything. But, hey, it’s only public money, and there’s plenty more where that came from.
With social housing we have bodies operating in a Twilight Zone that allows them to pretend they’re private companies, free from bothersome FoI requests and any worthwhile official scrutiny, yet enjoying assets they did nothing to build up while having their finances constantly topped up by the public purse. With overpaid CEOs pretending they’re part of the business community.
Registered Social Landlords are part of the Third Sector, that monkey that we must shake from our backs if we are to build up a healthy economy and a prosperous country. Wales is over-dependent on hand-outs, but instead of using even that funding wisely, far too much of it is passed on in further hand-outs. This is trickle-down economics Welsh style.
The fundamental problem with the Third Sector in Wales is not that it exists – for there will always be shysters looking for some ’cause’ to exploit in their own interest – but that it is so interwoven with the ‘Labour movement’; which in itself might not be a problem were it not for the fact that ‘Welsh’ Labour is the recipient and distributor of the handouts.
We should be thankful to the Office for National Statistics for giving us this chance to clean up the expensive mess that is social housing in Wales. We should grasp this opportunity with both hands and make our housing associations public bodies, open to public scrutiny.
The worst possible outcome would be for the ‘Welsh’ Government to be swayed by individuals like Nick Bennett, Stuart Ropke, the £150,000 a year CEO of Trivallis, and too many others with a vested interest in maintaining the indefensible status quo.
To maintain that status quo would be to pander to a selfish, sectional interest against the national interest. Of which we have seen far too much since 1999.
♦ end ♦