Dowry Gap funding

Jan 022017
 

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 ♦

P.S. Here is my submission to the Public Accounts Committee for its Inquiry into the Regulatory Oversight of Housing Associations.

Feb 292016
 

I’m off to Swansea this weekend, treating myself and the wife to a wee break. (Well, actually, the wife’s paying for the hotel.) I shall visit relatives and friends and go watch the Swans playing Norwich (son’s treating me!). So it will be at least a week until I put up my next post.

In the meantime, enjoy these tit-bits from hither and yon and have a good St. David’s Day. I might pop over to Wrecsam for the parade there, or maybe down to Aber’.

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DAWN BOWDEN AM?

Some of you will know by now that Dawn Bowden has been selected as the Labour Party candidate for Merthyr and Rhymni in May’s Assembly elections. If you haven’t heard – and even if you have – you’re probably wondering who the hell she is.

Around this time last year I also got to wondering, because I was told that she’d Dawn Bowden 3been promised a place in the Assembly, and although the seats suggested were Islwyn and Caerffili, my source was adamant that her elevation would be stitched up with a women-only shortlist. This prompted me to make enquires, resulting in a mention for Ms Bowden in my post ‘Welsh’ Labour And A Milking System Unknown To Farmers. And lo! it came to pass . . .

On the right you’ll see two screen-captured Twitter profiles for Ms Bowden, the ‘Before’ image taken at around 19:30 on Saturday, the ‘After’ around 00:30 on Sunday. (Thanks to ‘S’ for tipping me off.) There are significant changes in the second profile.

First, the reference to loving the unions is gone. Second, she has changed out of the Brizzle City shirt – a dead giveaway for her origins. Third, she is no longer a socialist. (Rhodri Morgan’s ‘clear red water’ seems to be flowing the other way at the moment.) Fourth, she has removed the reference to @Carrageryr, aka Martin Eaglestone, her current beau and another Labour insider. Gone with the reference to Eaglestone is the mention of being step-mother to his children by an earlier wife in Gwynedd. (Or at least I assumed they were his.)

The new profile was obviously put up in a hurry; such a hurry that she couldn’t tell us the full title of her job with UNISON or even get the spelling right for the party she represents. Maybe the champagne had gone to her head. No doubt everything has been put right by now.

Dawn Bowden is obviously a Labour loyalist first and foremost, knowing little about Wales, and even less about Merthyr. Just another Labourite on the make who’s come through the system of Unions and Third Sector, the kind of woman who’s always banging on about ‘the people’ but rarely gets to meet them because she lives in a Labour cocoon where she only mixes with her own kind.

Her success in Merthyr came about because the sitting AM, Huw Lewis, surprised quite a few people last month by suddenly announcing he was standing down. I won’t go into the reasons for this decision, suffice to say that they are of a delicate and intimate nature, the kind of messy personal relationships of which Ms Bowden and Martin Eaglestone have experience.

The other two women on the Merthyr and Rhymni shortlist were Carol Estebanez, who is also from that magic land, ‘Away’, and also helps prop up a ‘Welsh’ Labour Party having serious problems finding Welsh candidates of any quality; and then there was Anna McMorrin, who worked as an advisor to the dickheads down Cardiff docks and who is / was having an affair with Alun Davies AM former Natural Resources Minister.

The decision to impose an all-women shortlist in order to guarantee Ms Bowden her promised seat did not go down well with the bruvvers in Merthyr. Misogynists almost to a man who see La Bowden as the beginning of the end, for not only do the long shadows of council merger creep ever closer, but in the distance can be heard the heavy tread of the Westminster executioner coming to take an axe to the Merthyr constituency.

There’s nothing here to surprise anyone who knows how the Labour Party operates in Wales, but I still have three questions:

1/ Is ‘Welsh’ Labour now an official branch of UNISON?

2/ How much of the donkey vote will turn out for this latest parachutist?

3/ Will the Merthyr bruvvers – and, indeed, the disgruntled local sissters – canvass for Dawn Bowden?

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OXBRIDGE AND THE WELSH CRINGE

The aforementioned Huw Lewis is still the ‘Welsh’ Government’s Education Minister, and something (else) that causes him sleepless nights is the fact that so few of us aspire to Oxford and Cambridge universities. To listen to him and others who talk through their back heads the Welsh education system should be geared to getting as many as possible of our young people to Oxbridge.

So I was intrigued to see this item on the BBC website by Gareth Jones, a producer with BBC Wales, talking about the Oxbridge ‘success’ rate of his old school in Swansea, Olchfa Comprehensive. Though what I found most interesting, and disturbing, was that hardly any of those who went from Olchfa to Oxford and Cambridge returned to Wales.

Olchfa

And yet, this is how it must be in a colonial relationship. Wealth gravitates to the centre, where power and influence is also concentrated. The peripheries provide raw materials and manpower, holiday destinations and other benefits for the centre. This is how it was in Rome and every empire since.

Which means that Huw Lewis and all the other cringers, all those desperate to show ‘our English friends’ that we’re (almost) as good as them, want us to pay for our brightest and best to leave Wales and never return – and we are expected to be ever so grateful! This, remember, is ‘the Welsh Government’.

Here’s a better suggestion, Lewis . . . Why don’t you and your half-wit, forelock-tugging colleagues try to shake off your inferiority complex and start putting Welsh interests first. And to give you a clue where to start, subsidising a brain drain does not serve the Welsh national interest.

And if you aren’t serving the Welsh national interest then you really have no right to call yourselves ‘the Welsh Government’.

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TOURISM PAYING ITS WAY

Regular readers will know that I have firm views on tourism in Wales. Basically, I believe that it is a colonialist activity from which few Welsh people benefit, and that it is also destroying Welsh identity. In fact, from a patriotic perspective, I see nothing to be said in favour of the tourism Wales suffers today.

This unregulated and destructive ‘industry’ is doing irreparable harm to our homeland. Just look at the photograph below showing hordes of tourists swarming up to the summit of Snowdon, having been brought up almost all the way by the vile little train. Shouldn’t we be treating our beauty spots and our iconic mountains with more respect? Perhaps we would, but of course we Welsh have no control over the tourism ravaging our country.

Snowdon tourists

In Italy they do things better. With tourism taxes in various locations that suffer from too many gawpers and clickers. The latest moves are to limit the numbers of visitors to the Cinque Terre area. And as the article I’ve linked to tells us, big cruise liners are now banned from the Venice lagoon.

Elsewhere, in Italy and other countries, tourists are expected to put money into the public purse, not just the pockets of those taking the tourists’ money, who may be foreign companies or individuals from outside the country. The article I used tells us that such economic pragmatism is not limited to Italy, for “Bhutan doesn’t limit its number of tourists, but it does force them – through package tours – to spend $250 a day in high season ($200 in low), which apparently funds education, healthcare and so on.”

Here in Wales, when the subject of a tourist tax was mentioned last year, a spokesman for the industry was quite receptive to the idea – “providing the cash raised was ploughed back into the sector”. Er, no.

Wales has a problem with tourism. We have too much of it causing too much damage and bringing too few benefits to Welsh people and Welsh communities. So let’s tax tourism, thereby reducing the unmanageable numbers, and invest the money raised in those areas suffering the worst.

One way of using this income would be to help young locals buy homes in areas where tourism, and the resultant irruption of good-lifers and retirees, has priced them out of the property market. But it would be insane to ‘invest’ the money raised from tourism to encourage more tourism!

Of course the argument usually employed against a tourism tax is the same one used against raising council tax on holiday homes, which is that such measures would reduce the numbers of tourists coming from England.

I have given this argument a great deal of thought. It has caused me many a sleepless night. But for the life of me, I don’t get it. Because from where I’m sitting, Welsh people and Welsh communities seeing financial and other benefits from fewer tourists is a win-win situation.

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 IS ‘WELLNESS’ A SYNONYM FOR PRIVATE HEALTH CARE?

Those of you lucky enough to live in James-shire, the entertainment capital of Wales, may already be aware of the goodies coming your way in the very vague form of the Wellness village, or the Wellness centre, planned for Delta Lakes in Llanelli. I say ‘very vague’ because even if you are aware of it, I guarantee you don’t know who’s involved and what it’s all about.

Meryl

MERYL GRAVELL

There are so many interlinking and overlapping organisations involved with this project that I shall not attempt to list them, let alone guess at how they might be connected. Instead, I refer you to a piece that appeared on the Abertawe Bro Morgannwg University Health Board website in December 2015, and this article from last week’s Llanelli Herald which quotes the one and only Meryl Gravell, Mark James’ plenipotentiary extraordinary to us mere mortals.

If I was cynical (and I thank God I’m not!) I might suggest that what’s happening is this: The leisure centre is being demolished and a new one built; but to get as much lolly as possible bells and whistles are being added in order to promote the project as a ‘Wellness Centre’ incorporating a health centre, a hotel and conference centre, facilities for various ‘therapies’, etc.

Which could result in some poor bugger struggling down there with a bad back, going through the wrong door and finding himself confronted by a Siberian shaman; or perhaps getting legless with a bunch of middle managers down for a conference.

And if I wanted to be really, really cynical I might wonder who is involved in this project that isn’t among the many bodies named. For even the most trusting soul might have his or her suspicions raised by this document on South Llanelli, adopted by Carmarthenshire County Council in December 2014, which has this to say of Delta Lakes (on page 25): “Other related uses (eg healthcare /service sector – social and/or private health care) may also be considered appropriate”.

“Private health care”! Can we hypothesise that the undisclosed ‘partners’ in this project might be private health care providers? Though let me say that I have no objection in principle to private health care. Who can possibly object as long as such companies build hospitals and other health facilities using money provided by investors, banks, and those subscribing to private health care schemes?

But this is Wales and, more importantly, Carmarthenshire, so there must be a possibility that a company providing private health care has been wooed to Delta Lakes with the promise of spanking new facilities funded with public money, sixty million pounds of it.

And this being Wales it will also be trumpeted as a great coup that BUPA or Spire has chosen to ‘invest’ in Llanelli and Carmarthenshire. The massive investment from the public purse that underpins and explains this ‘coup’ will of course be downplayed if not excised entirely from the hyperbolic narrative.

So I suggest that instead of trying to confuse the public, those behind this project explain it better, and give us the names of all the ‘partners’. If only to allay the suspicions many hold.

Because Carmarthenshire in recent years has seen too many projects pushed through in secret. Loans have been made (and lost), and planning permission has been granted, on a nod and a wink. Small wonder that some ask if backhanders might explain this curious methodology.

And seeing as this Delta Lakes project – whatever it is – has the enthusiastic support of Mark James and Meryl Gravell we’re also entitled to ask if the council’s favourite business adviser, Robin Cammish, is involved.

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A LITTLE HOME IN THE WEST – RENTED FROM AN ‘INVESTOR’?

I like a man who can’t be fobbed of with flim-flam and bullshit, and one such man is regular correspondent Wynne Jones down in Cardigan. Not only is Wynne alert to flim-flam but he’s also very well organised, knowing what questions to ask and to whom they should be directed.

Not so long ago, after receiving information from Wynne, I wrote about Pembrokeshire Housing and its subsidiary Mill Bay Homes, first in Social Housing, Time to End This Lunacy (December 14), and then with Mill Bay Homes, Tai Ceredigion, Answers Needed (January 03).

To briefly explain, Pembrokeshire Housing is a publicly-funded – £27m since 2008 in Social Housing Grant alone – housing association or Registered Social Landlord (RSL). Mill Bay Homes, a ‘subsidiary’ of Pembrokeshire Housing builds and sells properties on the open market, with the money made from this activity going to the parent company for it to invest in more units of social housing . . . or at least, that’s the theory.

But as Wynne found out in a recent reply from Helga Warren, Head of Housing Funding for the ‘Welsh’ Government, Pembrokeshire Housing has yet to see a penny of the money Mill Bay Homes has made from five private developments! Admitted in the extract below, taken from a larger document (click to enlarge).

Wynne Jones Helga Warren

 

 

 

As I mentioned in my earlier posts, Mill Bay Homes advertises its properties as ideal investments for Buy-to-let landlords. Some reading this might think it odd for the subsidiary of a publicly-funded RSL to be encouraging such activity, I certainly think there’s something not right here.

Especially when we realise that Mill Bay Homes also administers the ‘Welsh’ Government’s Help to Buy – Cymru scheme, intended to help people, presumably young people, buy their first new home. Inevitably, Wynne and I wondered if ‘investors’ had been allowed to avail themselves of the Help to Buy scheme.

Ms Warren came to the rescue with this assurance: “Help to Buy is operated by Help to Buy (Wales) Ltd. They carry out extensive checks on behalf of Welsh Government as part of the affordability calculations for any potential buyer. As part of this assessment customers are advised that buy-to-let investments are strictly prohibited under the scheme. Scheme documentation clearly indicates that any fraudulent application for Help to Buy (Wales) assistance could be liable to criminal prosecution. Any fraudulent claims uncovered as part of our monitoring and governance arrangements, will always require immediate repayment of the shared equity loan assistance”.

Read it carefully. There is ‘advice’, there is ‘documentation’, but there seem to be no real checks. As things stand, someone from outside of Wales could buy a new property from Mill Bay Homes, taking advantage of the Help to Buy – Wales scheme, and use it as a holiday home – because nobody is checking. It is a system yelling to be abused.

But even this is only part of the much wider problem we have with housing associations, which in Wales have received, since 2008, close on £800m in Social Housing Grant alone. Then there’s Dowry Gap funding projected to cost £1.3bn and Welsh Quality Housing Standard funding of an estimated £1.7bn. Finally, there’s the Housing Finance Grant totalling £120m.

These are huge amounts of money in a poor country like Wales, so surely the ‘Welsh’ Government insists on every penny being accounted for . . . umm, no. The ‘Welsh’ Government dishes out the cash and seems to say something along the lines of, ‘If you get a chance, you might want to send in a report telling us how you’ve spent the money. No need for any nonsense like differentiating capital from revenue, or explaining where the money’s actually gone, all we need is good news to use as propaganda and to justify us giving you the money in the first place’.

There is no official oversight or monitoring. Housing associations regulate themselves. No one in the ‘Welsh’ Government seems to give a damn as to whether or not billions of pounds of public funding are being properly spent.

Keep up the good work, Wynne.

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‘EVERYTHING MUST GO’ SAYS CYNGOR CEREDIGION PwC 

Someone else with whom I’m in contact down west tells me of a curious partnership that has developed between Cyngor Ceredigion and PricewaterhouseCoopers LLP (PwC). It seems the council has retained bean-counters PwC to identify areas where cuts can be made – for a fee of 16% of identified savings.

And as in neighbouring Carmarthenshire, openness and telling the public what you’re doing in their name comes very low down on the list of priorities, with things being stitched up at private meetings.

Though this report from the ‘Nazis’ Cambrian News is able to tell us that by late January the council had already paid PwC £963,630. If my maths is up to it, this must mean savings already of over £6m. (And this must be delicate or even dangerous work, because it looks as if the reporters need to use pseudonyms.)

When you come to think about it, it’s a bloody strange system. This company is paid by cuts it identifies. So let’s say Ceredigion spends £100m a year on education, PwC could argue that, ‘The little buggers have all got iPads and smart phones nowadays – let them get their education from Google and Wikipedia‘, and make themselves a quick £16m! I could do that!

Then again, maybe there’s a simple explanation for it all.

Cuts have been forced on our local authorities by the Labour regime in Cardiff docks, and every time cuts are announced rural – i.e. non-Labour – councils take the hit, with Labour-voting councils being protected from the worst.

Now it just so happens that PwC is a major donor to the Labour Party. This article from the Guardian (12.11.2014) explains that Labour received £600,000 of advice from PwC on forming its tax policies – from a company that specialises in tax avoidance schemes. This article from the New Statesman (19.02.2015) tells us that, apart from trade unions, PwC is Labour’s biggest donor.

Ceredigion PwC

I was surprised to find no mention of Ceredigion on the PwC website

As we all know, few individuals and no companies give large sums of money to a political party without expecting something in return. I guarantee that PricewaterhouseCoopers LLP is no exception.

Can’t you just imagine the phone call from London to Cardiff: ‘Listen now, Carwell, PwC have been very generous to the party, so we’d like you to put some business their way, some out-of-way place where nobody’ll ask too many question. Got that?

Though that still might not explain why a non-Labour authority would agree to go along with this lunacy, so maybe the responsibility lies within Ceredigion. Can you help?

                                             ———————————————————————

Of course, none of our local authorities would need to cut services if the ‘Welsh’ Government wasn’t so profligate with it’s meagre resources; especially with the funding it showers on housing associations and the Third Sector, money that the ‘Welsh Government loses all interest in once it’s been handed over.

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Dydd Gŵyl Dewi Hapus / Happy St. David’s Day

 

Nov 172015
 

REMEMBERING BUDDY HOLLY

Back in January I posted a piece, Let’s Be Honest About Housing Associations, that began in nostalgic-humorous mood before going on to make more serious points about the provision of rented accommodation. The fundamental point I tried to make was that up until about a century ago rented accommodation was provided by the private sector, employers, charities and other bodies, not by local authorities or any other social housing provider. I asked, in view of changes taking place in the housing market, whether we could now be moving back towards that situation, how it might be done, and what benefits it might offer.

In my January piece I made a number of points about the changing nature of housing provision in Wales and, especially, how the proportion of people living in the private rented sector (PRS) was growing, almost unnoticed and, certainly in Wales, unplanned. I used the table below to show the dwelling stock percentages in the four categories: local authority, registered social landlord (RSL), owner-occupier and PRS.

Houses by tenure

I am now able to follow up that January piece thanks to a regular source who has drawn my attention to a recently published report examining the advantages of giving a greater role to the PRS in the provision of social and rented housing. The report is produced by the Public Policy Institute for Wales (PPIW) and is entitled The Potential Role of the Private Rented Sector in Wales. I advise you to open the report in another window or browser in order to follow the points I shall pick up on later in this article. But before that, let’s take a fresh look at the RSL sector, using information not previously available to me.

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WAY OUT WEST

For much of this new information I am indebted to another contact who has looked into the workings of the RSL sector in Ceredigion, an investigation that has unearthed a number of disturbing issues, prompting him to submit important questions to the ‘Welsh’ Government. Unsurprisingly, the civil servants acting as the ‘Welsh’ Government refuse to answer his questions, so he has now taken the matter to the Public Service Ombudsman for Wales.

Alas, the PSOW is Nick Bennett, former head of Community Housing Cymru, the umbrella body for housing associations, so I have warned my contact not to expect any help from that quarter. (Bennett’s appointment was a pre-Sophie Howe illustration of how incestuous and corrupt public life is in modern Wales.)

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.

Then there seem to be two funding streams for capital projects, i.e. new-build housing, the Social Housing Grant and the Housing Finance Grant. I knew about the first, and I submitted an FoI last year to the ‘Welsh’ Government asking how much had been dished out under the SHG. I used the answers to compile the table below (click to enlarge). It shows that the figure for the six years 2008 – 2013 is £692.5m. (The explanation for the declining amount paid out in SHG can be found below in other, newer funding streams.)

Social Housing Grant 1

But at that stage I knew little about the Housing Finance Grant. Now I know a little more.

Even though I’m a regular and consistent critic of housing associations one feature of their operations that I have always regarded as commendable is that they raise funding from banks and other commercial lenders. Which means they are not entirely reliant on the public purse. Well, that’s what I thought; the reality is very different, as I learnt from my enquiries into the Housing Finance Grant.

The system works thus: Yes, housing associations find commercial lenders prepared to give them large loans – but then the ‘Welsh’ Government – i.e. you and me! – repay those loans over 30 years to the lenders, M&G Investments and Affordable Housing Finance, the latter being funding guaranteed by the UK Department for Communities and Local Government.

(And as the DCLG website puts it, “Borrowers will need to be Registered Providers (or equivalent in the devolved administrations) and classified to the private sector”. Which suggests that housing associations are not public bodies. Or maybe they are, in which case why is a Conservative government putting so much money into public bodies in order for them to build up valuable assets . . . unless they are being fattened up for full privatisation?)

Housing Finance Grant clip

The system of repaying lenders also applies to the ‘Dowry Gap’; housing associations take out loans, paid in lump sums, and the ‘Welsh’ Government repays those loans over 30 years. This explains why Tai Ceredigion has now completed its programme of upgrading its properties but will continue to receive the ‘Dowry Gap’ funding every year. The money is repaying Tai Ceredigion’s loan, which seems to be itemised in the latest financial statement at £23m.

It is even suggested that ‘Dowry Gap’ and WHQS funding is being used – improperly – for capital projects, but financial oversight of housing associations by the ‘Welsh’ Government is so lax that there’s no way of proving or disproving this claim.

All of which means that housing associations, despite the flim-flam about ‘new ways of doing things’ are old-fashioned Statist creations, entirely dependent on the public purse, which explains why they are favourites of the anti-business parties, Labour and Plaid Cymru.

Their only assets, their only other source of income, is of course their housing stock – either inherited from local authorities or built with public funding. So, again, at no cost to them. It’s a ‘new way of doing things’ only in the sense that it’s more opaque than straightforward dollops of public funding.

Seeing as housing associations are entirely dependent on the public purse it’s worth asking, again, why they are not covered by the Freedom of Information Act? Maybe the duplicitous and very expensive way they’re funded provides the answer.

Another point, one that I have raised before – dealt with in my January post, and also here – is the scandalous amount of this public funding that our ‘Welsh’ housing associations spend over the border. In the case of Cartrefi Cymunedol Gwynedd it was the insanity of giving its total maintenance contract to English firm Lovell which, from its Cheshire base, recruited its sub-contractors exclusively from north west England.

I’m sure Tai Ceredigion uses local firms to do its work, but I still question why a firm operating on Cardigan Bay should have external auditors based in Birmingham (Mazars LLP) and internal auditors in Hampshire (TIAA Ltd). Both may have offices in Cardiff, but neither is a Welsh company. There are genuine Welsh companies closer to and even in Ceredigion that could and should be doing this work that is paid for with Welsh public funding.

Tai Ceredigion auditors

‘Welsh’ Government funding should carry the stipulation that as much as possible of that funding remains in Wales. This can only be achieved if the funding reaches genuinely Welsh firms, not outside firms with an office in Wales funnelling profits back to HQ, or those seeking to capitalise on the public funding bonanza with a hastily set up ‘Welsh branch’ that is little more than a post-box and a telephone number.

Of course, it would be easy to argue that none of this really matters because all the funding comes, in one form or another, from London. But only part of the Housing Finance Grant comes directly from London, the rest is raised commercially, and the other funding streams – Social Housing Grant, Welsh Housing Quality Standard and ‘Dowry Gap’ funding – seem to be ‘Welsh’ Government initiatives.

Which is worrying, because it gives us a situation in many parts of Wales, perhaps especially in rural areas, where housing associations are on a treadmill of growth and expansion fuelled by this funding – yet there is often little or no local demand for more social housing.

Housing associations are perhaps the ultimate manifestation of the Third Sector, the shadow world that those buffoons down Cardiff docks want us to believe is an economy, but it’s all smoke and mirrors, all underpinned by public funding. And all unnecessary. As I shall now explain by delving a little more into the Public Policy Institute for Wales report I mentioned earlier.

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‘THE POTENTIAL OF THE PRIVATE RENTED SECTOR IN WALES’

Before diving into the report it might be worth just pausing to see what kind of an organisation the Institute is. It was formed in January last year to “provide the Welsh Government with authoritative independent analysis and advice.” If you look through the names to be found in ‘The Team’, ‘The Board of Governors’, and the ‘Executive Group’, you get the impression that the PPIW is very much a cross-border outfit, containing – on the Board of Governors – people who know Wales such as Gerry Holtham, along with people, such as Will Hutton, who may be very clever and a Newsnight regular but know little about our country. ‘The Team‘, presumably those running the PPIW day-to-day, is disappointingly top-heavy, to the point of capsizing, with apparatchiks and people from the Third Sector.

The Executive Group “is made up of representatives from the organisations that formed part of the consortium that collaborated in the development of the PPIW”. These are ‘our’ universities (including Liverpool but not Glyndŵr!) and Victoria Winkler of ‘Welsh’ Labour’s very own think-tank, the Bevan Foundation.

The report set out to answer three questions, found below.

PPIW report aims

Some Report Findings

The PPIW report confirms that the PRS is growing in every single local authority area, though predictably, Cardiff, with its vast student population and other young singles, outstrips all other areas. In fact, the report tells us that in Cardiff, “owner occupation has actually fallen compared to renting in both absolute and proportional terms”. Table 6 shows that 22.1% of Cardiff’s dwellings are privately rented. The next highest local authority area is Ceredigion with 17.5%, and then in third place comes Denbighshire with 16.5%.

PRS changes

The figures for both Cardiff and Ceredigion are influenced by the student presence while the ‘Rhyl factor’ explains the Denbighshire figure, correlated in Table 1, which tells us that Sir Dinbych lost 870 private households between 2001 and 2011 while the same period saw an increase of 1,468 in the PRS. Other areas saw a decline in the number of private households but nowhere was the fall as dramatic as in Denbighshire.

Staying with Table 6, in percentage and absolute terms Carmarthenshire saw the highest increase in private households due mainly to the saturation housing strategy devised by the Planning Inspectorate and eagerly implemented by those running the council. The same designed-to-attract-English-buyers process can also be observed at work in Powys. (N.B. A ‘household’ can be a person living alone or a family of 10.)

Table 9 tells us that rents in the PRS are always higher than the RSL sector though this varies from area to area. In Blaenau Gwent the average social rent is £61.68 per week, or 89% of the PRS, whereas in Wrecsam, Swansea and Cardiff the percentage drops to 67%, though the average PRS rent in Wrecsam is lower than the two southern cities.

Poor PRS

Of course there is a downside to this unplanned and largely unchecked growth in the PRS, especially in decaying coastal towns like Rhyl, and areas of our cities taken over by students. That downside is the breakdown of community life and an increase in various forms of criminality and anti-social behaviour.

It could even be argued that there is a case to be made for paying compensation to long-term residents of such neighbourhoods. Compensation to be paid by the ‘Welsh’ Government or the local authority, whoever was responsible for not guarding against such decline or refusing to implement the legislation that could have prevented it.

A Better Way

Happily, the report also makes clear that there are alternatives to endlessly pumping public money into secretive, unaccountable and amateurishly run housing associations, or otherwise allowing the growth of ghettoes of cross-border criminals and misfits housed by slum landlords. To avoid these outcomes the report draws our attention to institutional investment such as pension funds to provide rented and other property, coupled with more imaginative and varied housing options.

In the Appendix the report’s authors look at three examples in the south where the ‘Welsh’ Government is in partnership with the Principality Building Society in a venture called Tai Tirion (or Tirion Group Ltd, Co. No. 08891823) to build over a thousand new homes on brownfield sites in Cardiff, Newport and the Rhondda. Though that said, there is not a lot of progress being made. Not really surprising, seeing as the ‘Welsh’ Government is involved . . .

I say that not out of malice, it’s just the way things are. Institutional investors such as pension funds are viewed with suspicion by Statist ‘Welsh’ Labour. As the report puts it – refer to ‘three questions’ panel above – “the Minister confirmed that the emphasis of the project should be concentrated mainly on (i) and (ii)”.

PRS minister response

To remind you . . . Question iii reads, ‘If the PRS is to be a long term tenure of choice, whether it is likely to be possible to interest institutional money and professional management in the market (i.e. what are the barriers to large scale investment?).’

On reading that you can almost imagine a ‘Welsh’ Labour politician or apparatchik having an involuntary evacuation of the bowels . . . “‘institutional money’! . . . ‘professional management’! . . . people who might understand business! . . . what about our friends in the Third Sector, how are they to sustain their muesli-weaving, skinny latte lifestyles? . . . oh, no, we can’t have that!

So the ‘Welsh’ Government prefers to let the private rental sector grow in a reckless and uncontrolled manner through the activities of Buy to Let ‘investors’ and people who buy dilapidated hotels in Colwyn Bay to house Scouse junkies.

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CONCLUSION

It is surely obvious that if housing associations are the answer, then the question must have been, ‘What is the most expensive (to the public purse) and least efficient way of delivering rented social housing?’ In the hope of disguising this monumental error we are now encumbered with secretive, unaccountable money pits.

Which would be bad enough if they were at least spending the money on housing Welsh people, but due to the Englandandwales allocation system into which our housing associations are locked a Welsh family is all too likely to discover that the Family from Hell has been given the house next door . . . ‘Hell’ in this case will be Birmingham, or Stoke-on-Trent, or Sheffield, or . . .

Consequently, there is no justification for pouring any more money into housing associations. Especially given that the Conservative government in London is almost certainly planning to do away with them. Or does the ‘Welsh’ Government think this is a devolved matter? Maybe it is, but that won’t count for anything if Westminster forces change through by cutting the block grant. And further undermines the sector with selected benefit cuts.

So my advice to the ‘Welsh’ Government is this: realise that housing associations are an expensive failure. Then, get ahead of the curve by taking control of the social rented sector nationally and looking for the kind of investors mentioned in the Public Policy Institute for Wales report, pension funds and others looking for the kinds of large-scale investments that individual housing associations and single sites cannot provide.

To take advantage of this private funding, and to save the public purse a hell of a lot of money, you, the self-styled ‘Welsh Government’, need to put aside your congenital hostility to business and real money and, for a change, prioritise the best interests of the Welsh people. It’s what you were elected to do – remember?

END