Third Sector in Wales

Jan 162017
 

INTRODUCTION

Regular readers will know that one of the ‘staples’ of this blog is the wasting of public funding by Third Sector organisations. Exposing this waste is not something I really enjoy but it’s so prevalent in Wales – and has become worse with devolution – that it just cannot be ignored.

In a very general sense it’s possible to divide most Third Sector organisations into two main groups.

The first is the local group set up to ‘regenerate’ a run-down area, with most of those involved being local people, and a surprisingly high percentage of them having connections with the Labour Party. I say ‘surprisingly high percentage’ because, while less than a third of Welsh voters may now support Labour, the party’s supporters seem to make up a clear majority in this category. Let’s call this the Community sector.

The second is not so easy to categorise. Perhaps the best way to put it is that this group is about things rather than people or a community, perhaps an old building, or a specific area of countryside. Those involved in bodies like this are unlikely to be local. Let’s call this the Conservation sector.

Despite this helpful distinction, there are of course overlaps. But it tends to be one way, with outsiders involved in, often leading, Community groups rather than finding many locals in Conservation projects.

I’ve given you this introduction because it might help with what follows. This post being about two stories breaking that involve one group from each category.

NSA AFAN

As the name suggests, NSA Afan is based in Port Talbot, and its website tells us, “The purpose of the organisation is to support regeneration to enable a better quality of life for people living in the most disadvantaged communities in the Swansea Bay Area.”  (I am grateful to the ever-alert ‘Stan’ of Neath Ferret fame for tipping me off about this story.)

The original media mention on the ninth of this month said that police are investigating the possible misuse of public funds, and tells us, ‘A Welsh Government spokeswoman said: “Following initial investigations into allegations concerning possible misuse of public funds at NSA Afan, we have suspended funding while further investigations are undertaken.”‘

UPDATE 23.01.2017: Funding has now been stopped completely.

The second report, two days later, says, quoting a police source, “We can confirm that South Wales Police has arrested a 35-year-old woman from the Port Talbot area on suspicion of theft on August 11, 2016 following a complaint received from NSA Afan.’

Now in cases like this I make my way to the figures, and so here are the most recent accounts for NSA Afan, these being for year ending 31.03.2016. A quick perusal of the nitty-gritty will tell you that income is falling, dramatically, down from £2,005,262 in 2014 to £1,428,901 in 2015 and £923,210 in 2016.

Even so, you’ll be pleased to know that despite this drop in funding staff costs at NSA Afan for 2016 were still over £800,000. Which means that in 2016 income just about covered staff costs.

‘Ah, Jac, you cynical bastard’ I can hear in the background, ‘that still still leaves a hundred grand to help people, at the Dalton Road Community Employment Academy and the Glyncorrwg Con Club’. Maybe, maybe not.

My equivocation is due to the fact that if we go to the Companies House website, there we find more information on (to give it its full name) the New Sandfields Aberafan and Afan – Community Regeneration, Company Number 03674953. Click on the ‘Charges’ tab and you’ll see that there are nine outstanding Charges against NSA Afan, that is loans or mortgages. Put it all together, the falling income, the high staff costs, payments on loans and mortgages, and it becomes clear that NSA Afan is not in the best of financial health.

In fact, the independent auditors say as much in the Accounts for 2016 (page 21, para 3), where we are warned of ” . . . material uncertainties which may cast doubt about the Charities (sic) ability to continue as a going concern.”

The more generous among you may think that the theft currently being investigated by South Wales Police plays a major role in NSA Afan’s parlous state. Not so. For elsewhere in the Accounts (page 20, para 9) we are told that “£50,000 was refunded by the credit card company during the year, however the remainder of the theft is unlikely to be recovered”.

The “remainder” may be the £46,144 we find on page 28, under ‘Donations and Legacies’. If so, how do we reconcile this amount with the statement quoted in the previous paragraph? Or is the £46,144 part of the £50,000 refunded by “the credit card company”?

Despite the falling income NSA Afan is still expanding. Curious, really, considering it’s a Communities First project and that last October even the ‘Welsh’ Government was forced to admit that Communities First had been a very expensive failure. Among NSA Afan’s recent acquisitions was Youth of Bettws (YOBS). So I made some enquiries.

What I’d assumed to be just a youth club is in fact registered with Companies House, Number 06719083. Under the Charges tab we learn that YOBS has an outstanding loan of £267,350 with the Big Lottery Fund, a loan it took out on June 29th 2011 to buy the leasehold of a former school owned by Bridgend County Borough Council.

The same property is now listed as a Charge against FSA Afan, but the details have changed. On May 27th last year The Big Lottery Fund made a ‘grant’ to NSA Afan of £388,384. This was presumably done to take over the leasehold of the property inherited from Youth of Bettws aka Bettws Boys and Girls Club, but what was the extra £121,034 for?

A question worth asking seeing as the Land Registry document tells us (page 3) that “The value as at 15 August 2016 was stated to be under £100,000”. Maybe NSA Afan is using some of the money it got from The Big Lottery Fund for some other purpose? Apparently not; because the Charge document mentions only the Bettws Boys and Girls Club. (In case you’re wondering, this is a repayable grant, what you and I would call a loan.)

To recap: we have a property, Bettws Boys and Girls Club, owned by a Labour-run council and valued – or possibly the leasehold is valued – at “under £100,000”; but a Labour-controlled, Communities First body goes out on a limb for £388,384 to lease this property! Unless NSA Afan has massive plans for YOBS I do not understand what the hell is going on here. All I see is the regular pattern of public money being shuffled around between Labour-controlled bodies to create the illusion of employment and economic activity.

And what of the Big Lottery Fund? I’m sure most of you think of the BLF as a generous body gifting large sums of money to worthy causes, money we have given to this organisation through playing the National Lottery or its other games. Did you know that the Big Lottery Fund is a commercial lender?

Perhaps lending to groups that might have difficulty getting a loan from a regular financial institution – those it describes as “community and voluntary groups”? I wonder what the interest rates are? And if those groups receiving a loan default, does the BLF take possession?

To conclude. The Communities First scheme operated in the most disadvantaged areas of Wales, in other words, areas controlled by ‘Welsh’ Labour. This gave the party a golden opportunity to engage in cronyism. Which is exactly what it did, and this explains why the Communities First project was such a disaster.

Dealing specifically with NSA Afan, I don’t doubt that someone stole money, but this is not why it’s folding. It’s folding because it was badly run. Even when it was half-way up Shit Creek with income falling it was still taking on new liabilities!

If this refers to 2017 I don’t see much point

As for the alleged theft, how was an individual employed by a body reliant on the public purse able to steal over £50,000 through a credit card? Was there no credit limit on this card? I do hope that the prosecution of this individual is not allowed to distract from the bigger problems at NSA Afan, all of which can be traced back to ‘Welsh’ Labour and the cronyism and nepotism on which it relies.

This system is now so discredited that it places ‘Welsh’ Labour at something of a crossroads. The party can either clean up the Third Sector and perhaps alienate many of those who benefit from it, or else it can stick with this system of corruption and see its electoral support slip even further.

If NSA Afan is – was? – a Community type of Third Sector organisation, this next case is most definitely about a Conservation body . . .

CAMBRIAN HERITAGE REGENERATION TRUST

This outfit has starred more than once on this blog, but before looking at previous posts let’s get the background on the Cambrian Heritage Regeneration Trust Ltd (CHRT). It was Incorporated with Companies House on February 28th 2003 as Ymddiriedolaeth Atgyfnerthu Treftadaeth Sir Gar (Carmarthenshire Heritage and Regeneration Trust) and appears to have been a joint venture between the County Council and Coleg y Drindod.

Lord Dynevor came on board on April 9th 2003. A few other local worthies joined on the same day, including a Meryl Gravell, described as “Leader of Carmarthenshire County Council”. Another was Roger (now Sir Roger) Jones, then of the Welsh Development Agency, and a former BBC Wales Governor. While yet another director was William Powell Wilkins, who came up with the idea of the National Botanic Garden. Quite a crew.

Though for the purposes of this article I suppose the most important recruit was Claire Deacon, who became a Director on October 8th 2008. At the time, Ms Deacon, based in Marloes, Pembrokeshire, was working as a lecturer and also as a consultant (possibly to the Pembrokeshire Coast National Park). Ms Deacon served as a director until June 9th 2010.

The reason for Ms Deacon resigning as a Director was to take over as CEO, soon after the Trust bought its main project, Llanelly House in Llanelli. Though she rejoined the Board on June 1st 2011 as Secretary.

LLANELLY HOUSE

The name of the body was officially changed, with Companies House, from Ymddiriedolaeth Atgyfnerthu Treftadaeth Sir Gar to Cambrian Heritage Regeneration Trust Ltd on February 25th 2015. (All the information here, and more, can be found under Cambrian Heritage Regeneration Trust Ltd on the Companies House website.)

In addition to the main company, there is also the charity of the same name, and down the years there have been a few of what I can best describe as subsidiary companies. The only one I think is worth bothering with is Plas Llanelly House Cyf, where we again find Ms Deacon as Secretary.

Previous posts told how the CHRT is branching out, first to Merthyr, with the purchase of the YMCA building in Pontmorlais, and then in the other direction, down to the ruins of Ystrad Fflur (Strata Florida Abbey) with the purchase of the farm buildings at Mynachlog Fawr. So you may wish to read Ystrad Fflur – The Heritage Industry Moves On and Conserving Heritage, Maintaining Colonialism, both by a guest writer.

The reason for CHRT branching out from Llanelly House was quite simple – the funding was running out, and there was no way that Llanelly House could ever pay its way – and Ms Deacon’s salary – unless a fairy godmother stepped in with oodles of loot.

The time had come to find another project, concoct another ludicrously optimistic business plan, rake in the grants, live high on the hog for a few years, get plenty of good publicity, improve the CV . . . until it becomes clear that this is yet another project that will never survive without the drip-feed of public funding. By which time people like Ms Deacon have usually moved on to the next project. And so it continues. This is the Conservation element of the Third Sector in Wales, and the beneficiaries are almost always, like Ms Deacon, from over the border.

Which brings me to the reason for writing this piece. The word on Stepney Street is that Ms Deacon recently parted company with the CHRT. And when you read the latest accounts you’ll understand why. The auditors state quite clearly (page 11, para 1) that the net deficit at 31.03.2016 of £114,038 “. . . may cast significant doubt about the Charity’s ability to continue as a going concern.”

A number of entries in the Accounts caught my eye, and if I was involved in CHRT or Llanelly House I’d be asking questions about them. The first is to be found on page 18 in ‘Direct Costs of Charitable Activities’, where we are told that in the year that ended 31.03.2016 £262,482 was spent on “Legal and Professional Fees” (£168,146 the previous year). That figure seems very high, and I’d like to have it explained.

Another perplexing entry, on page 26, tells us that . . .

How does the CEO get taken on as a consultant? CEO Claire: ‘Oh, hello, Claire, this Claire here, would you like to work for a while as a consultant, for a much higher rate than your CEO salary?’ Consultant Claire: ‘Well, thank you, Claire, I’d love to‘. This is bizarre, but I’ve reported on it before, so it’s not new to me.

As if the figures for CHRT weren’t bad enough the Plas Llanelly House Cyf Accounts tell us that that venture is sixty-five grand down the Swanee. But perhaps worst of all is that – just as with NSA Afan – in addition to falling income and rising debt there are Charges against CHRT, held by Finance Wales, the National Heritage Memorial Fund, the Architectural Heritage Fund, and Merthyr Tydfil County Borough Council. If the Trust can’t meet its obligations then presumably each of these Charges will become the responsibility of its guarantor, be that the ‘Welsh’ Government, Llanelli town council, or Carmarthenshire county council.

In case the escape plan in the forms of Merthyr YMCA and Ystrad Fflur don’t work out, Ms Deacon has now gone into business on her own account, with Marloes Conservation Ltd. This company was only Incorporated on December 1st (soon after the latest Accounts were published), which lends credence to the suggestion that she is no longer with CHRT. Perhaps she’s had a vision – Meryl Gravell leading the band into Abide With Me as the good ship Llanelly House heaves her last and slips into the abyss.

It will be interesting to see what work comes the way of Marloes Conservation Ltd. And where from.

Although very different in their fields of operation, and those involved, NSA Afan and CHRT have a lot in common.

To begin with, both have swallowed up large amounts of public funding. And now, with both projects in serious financial difficulties, it becomes clear that much of that public funding has been wasted. Which is not to say that some people haven’t benefited from NSA Afan’s courses, or that good work hasn’t been done at Llanelly House, but the issue is surely priorities.

With an economy in serious trouble, with EU funding bound to end soon, how do you feel about paying for classes on ‘The American Century’ in Port Talbot, and a new rococo balustrade for Llanelly House, when sick people have to spend hours on a trolley in our hospitals?

Obviously that money would be better spent on the hospitals, and on training doctors, nurses and other staff we need.

Another troubling issue with these and other projects is the ease with which they secure Lottery funding. In the case of NSA Afan it’s Big Lottery Fund, and with CHRT it’s Heritage Lottery Fund, but it’s still money we’ve given. It’s almost as if Lottery funders take their cue from the ‘Welsh’ Government. Is there a connection?

In a poor country like Wales, what funding we have must, in the first instance, be spent on what we need, and in the longer term there must be investment in making Wales wealthier, not in glossing over the deprivation with publicly-funded Labour cronyism, or by restoring Georgian mansions into which our ancestors would only have been allowed as servants.

It’s long past the time when the ‘Welsh’ Government and the civil servants it claims to control did what other governments across the globe do – prioritise, and stop wasting money we can’t afford to lose.

end ♦

Jan 272016
 

Let me make it clear at the outset what kind of ‘care’ I’m talking about. This is not the ‘care’ that involves helping old dears out of bed, making them breakfast, and listening – yet again – to how Uncle Arthur single-handedly won the Boer War. No, this is an entirely different kind of ‘caring’, one that most people are only vaguely aware of.

In addition, this post pulls together a few threads that might otherwise be left as loose ends. For example, in my enquiries into the housing associations operating in the south west I’ve come across puzzling references to the ‘Ceredigion Care Society’ or the ‘Pembrokeshire Care Society’, as you might expect, these references provided an incentive to make further enquiries,

Then there was the reliable source who told me last year about young tearaways turning up in Cardigan, with families in tow, being placed in temporary accommodation before moving on to something more permanent, provided by housing associations or private landlords. Few if any of these arrivals seemed to have pre-existing connections to Ceredigion, or to any other part of Wales.

Finally we have the housing crisis in Aberystwyth I referred to in this recent post. No, this is not a housing shortage, this is the exact opposite: student flats built at the very time the number of students applying to Aberystwyth University went into sharp decline, coupled with houses of multiple occupation in the town – many owned by men of fraternal tendencies – standing empty or under-occupied for the same lack of bright-eyed young things thirsting for knowledge.

*

Perhaps the best way to start would be with a list of the various bodies using the ‘Care’ label that have operated in Pembrokeshire, Ceredigion and Carmarthenshire in recent decades, some now defunct and one in the process of being wound up. After the name (containing link to website) you’ll see their Charity Commission number (with link to relevant CC page); date they were formed (and, where applicable, wound up); their company number (if applicable, also with link) and the date of Incorporation; finally, a link to the most recent available accounts.

  • The Dyfed Care Society, 506768, 22.09.1977 – 09.03.2000.
  • The Carmarthen Care Society, 508420, 05.02.1979 – 25.10.2001.
  • The Pembrokeshire Care Society (1), 508848, 18.06.1979 – 16.12.1996. 

The Cardiganshire / Ceredigion operation was clearly the earliest and its original remit was:

“1. The relief of poverty, the relief of sickness and the advancement of education and training amongst: A) Persons who have suffered a legal restriction on their liberty in the community, or any penal establishment or institution B) The families and descendants of such persons described in A) above C) Persons in need, hardship or distress.

2. The advancement of public education concerning all aspects of crime prevention.”

The Dyfed, Carmarthen and original Pembrokeshire societies used almost exactly the same wording. Telling us they were linked bodies helping ex-criminals . . . of whom there must be hundreds every year returning to the mean streets and gang life of Ystrad Meurig, Marloes and Ponterwyd.

Though I’m intrigued by the use of the word “descendants”. Does this mean that you could have demanded help if your great-great-great-great-grandfather was imprisoned for stealing a loaf of bread? I also love the term “Persons who have suffered a legal restriction on their liberty”, there are just so many euphemisms for being banged up.

The Constitution for the Ceredigion Care Society seems to have been changed (24.09.1999) and under ‘Activities’ on its Charity Commission page it now says, “PROVIDES HUMAN RESOURCES PROVIDES HOUSING SUPPORT PROVIDE INCREASED HOUSING OPTIONS TO THOSE THREATENED WITH HOMELESSNESS ADVOCACY”. I don’t know whether this is just unpunctuated or an attempt at shouted stream of consciousness. Either way, this change of emphasis brings it into line with the Pembrokeshire Care Society. The concern is no longer for ex-cons but the ‘homeless’ and others it can be claimed are in need of accommodation.

As I’ve said, the Ceredigion Care Society is currently being wound up in favour of  Cymdeithas Gofal The Care Society. Though this successor body is no longer restricted to Ceredigion as it claims to be operating in Carmarthenshire, Pembrokeshire, Ceredigion and even Powys.

*

As you will have noticed above, the Pembrokeshire Care Society and Cymdeithas Gofal are also limited companies, with the trustees serving as directors. The Pembrokeshire outfit is headquartered in Haverfordwest, conveniently near to Pembrokeshire Housing. Here’s a link to the most recent Annual Return received by Companies House, listing the eight current directors. (While the Companies House form offers the option of giving Welsh as one’s nationality, all describe themselves as ‘British’.)

And here’s the latest Annual Return for Cymdeithas Gofal, based at 18 Chalybeate Street in Aberystwyth, but also owning or leasing 26 Cambrian Street (night shelter) and 21 Terrace Road. (The situation at Cymdeithas Gofal is not much better, with a distinctly English-looking board saved by what could be seen as a token Welshman in the form of Y Parchedig Cen Llwyd.)

And here are the most recent accounts. For Cymdeithas Gofal and Pembrokeshire Care Society. So what do they tell us? Let’s look at Pembrokeshire first. With charity accounts I tend to cut to the chase to see a) where the money comes from, and b) where it goes.

We see that £308,279 came from the ‘Supporting People Programme‘ administered by the ‘Welsh’ Government. It’s worth remembering that ‘vulnerable people’ as used in this context can mean “persons who have suffered a legal restriction on their liberty”, drug addicts, alcoholics, those who find themselves ‘homeless’ after being evicted from their previous home, and others you might not want as neighbours.

Update 22:48: I am indebted to Jacqui Thompson for guiding me to this report on the shambles in administering the Supporting People grant in neighbouring Carmarthenshire.

The other major source of income – accounting for £224,020 – is listed as “Advice, Pathway Letting & Bond Scheme”, which was new to me. However, I soon found Pathway Lettings . . . “Part of Pembrokeshire Care Society”!

Pathway Lettings

Seeing as this is ‘Welsh’ Government funding the next stop was obviously the website for that shower, where I found no reference to Pathway Lettings. Which was all very confusing until I scrolled further down in the accounts and found (top of page 15) a reference to ‘WG PATH’, clearly a reference to something, again linking to the ‘Welsh’ Government, but what, exactly?

PATH

Googling ‘PATH homelessness’ took me first across the Atlantic, where it is the acronym for Projects for Assistance in Transition from Homelessness, a federal programme designed to help those who are homeless and suffer severe mental issues. This seemed to fit the bill, but to confuse the picture the Pembrokeshire Care Society has in the past been known by the acronyms PASH and PATH, explained in the panel below.

Pembrokeshire Path

So what exactly is Pembrokeshire Action for The (sic) Homeless? Googling the name takes us straight to the Pembrokeshire Care Society. So despite the hype about a ‘forum’ it’s little more than another name for the Pembrokeshire Care Society.

Then it struck me that much of the funding involved here could be in the form of the “Bond Scheme” referred to, and sure enough, under the ‘Services‘ tab on the Pembrokeshire Care website I found this.

Bond certificate

And on the Pathway Lettings Home page you’ll find this, which at least acknowledges the support of the ‘Welsh’ Government.

Pembrokeshire bond scheme

All of which poses a number of questions:

  • How much homelessness is there in Pembrokeshire to justify this funding?
  • Are there figures available on homelessness in Pembrokeshire from a body independent of the Pembrokeshire Care Society?
  • Isn’t there an incentive for organisations being funded to combat homeless (or anything else) to exaggerate the scale of the problem in order to secure more funding?
  • In pursuit of that objective an obvious route to more funding is to ‘import’ homeless people from outside of Wales. Were this to be happening, what response – if any – could we expect from the ‘Welsh’ Government?
  • Why is the ‘Welsh’ Government giving funding to a “Social Lettings Agency”, Pathway Lettings, rather than to the Pembrokeshire Care Society? Is it to disguise the ultimate destination of the money? If not, why are we paying for an extra and unnecessary layer of bureaucracy? Or is the ‘Welsh’ Government funding the Pembrokeshire Care Society’s empire building?
  • Why can’t we have a body independent of the ‘Welsh’ Government and the Notional Assembly to monitor how public funding is spent in Wales?

Just one final thing that caught my eye in the Pembrokeshire Care Society accounts, under the heading ‘Designated Funds’ (page 19), was the figure of £100,000 for ‘Senior Management Succession Planning’. What the hell is that about!

Reassuring, I suppose, in that it suggests that if there’s that much money available for such a purpose then the homelessness situation in Pembrokeshire can’t be that bad.

*

Moving on now to the accounts for the ever-expanding Cymdeithas Gofal The Care Society. As with Pembrokeshire Care, we see that over half of the money received is spent on salaries and pensions, a reminder that charities like this provide good jobs for those ‘on the inside’ and those they know.

The Cymdeithas Gofal accounts were certainly easier to follow than the Pembrokeshire Care accounts, and different in many ways. For example, the Bond Scheme accounts for only a very small proportion of the income and I was initially surprised to see no reference to the Supporting People Programme that is Pembrokeshire Care’s most valuable source of income. (I also found it odd, five years after the 2011 referendum, to see Cymdeithas Gofal, despite its Welsh pretensions, still referring to the ‘Welsh Assembly Government’.)

Then I saw the entry ‘Ceredigion County Council – supporting’. I went to the council website for confirmation. So why is this funding administered on behalf of the ‘Welsh’ Government by the local authority in Ceredigion but given direct to the charity in Pembrokeshire?

Cymdeitas Gofal Incoming Resources

In fairness, Cymdeithas Gofal does raise some of its own money. Of its total income of £1,152,457 for y/e 31.03.2015, as shown in the panel below (from page 12 of the accounts) £427,898 is not in the form of direct grant funding. After the various grants, totalling £724,559, the most rewarding income stream is ‘Rents receivable’. This is, presumably, rents received for accommodation in the buildings Cymdeithas Gofal has bought, with public funding? If so, who holds the deeds on these properties, and if they aren’t in public ownership, shouldn’t they be?

Cymdeithas Gofal Incoming Total

One major source of funding we did not encounter in Pembrokeshire is the £175,408 ‘Welsh Assembly Government S180 Night Shelter Funding. (This page provides a link to further information on S180.) As I’ve mentioned above, this night shelter is at 26 Cambrian Street. Though if it’s been running since 2002 – as this clip from the Cambrian News tells us – why did the ‘Welsh’ Government need to dish out 175 grand last year, which may be more than a terraced house in the centre of Aber’ is even worth?

On the plus side, there is no six-figure sum allocated by Cymdeithas Gofal for ‘Senior Management Succession Planning’. So that’s something to be thankful for, eh?

My original thought when I approached this subject was that Cymdeithas Gofal was gradually taking over the south west, and that Pembrokeshire Care would be the next to go. But the more I’ve learnt about their relationship I now see something more  subtle and complex at work. Maybe I watch too many Mafia movies and TV series, but it looks like the rackets have been carved up in a way that satisfies both parties. (‘Yous can have construction an’ we’ll take da Teamsters. Capice?)

*

Many of these Care societies’ clients of course move on to become tenants of the local housing associations, to justify more funding for housing associations, which clears up one loose end. Then there’s the young tearaways from God knows where turning up at some kind of ‘halfway house’ in Aberteifi, a border town where both organisations operate and where Cymdeithas Gofal has a £34,000 a year ‘Young Persons Project’. Finally, the housing problem in Aberystwyth, well, just think about, those empty student flats have to be filled somehow. See how it all fits neatly together!

The growth of the Third Sector in Wales was inevitable given that the only political parties (other than the Lib Dems) that have ever been in power down Cardiff docks are statist, anti-business parties. These parties – Labour and Plaid Cymru – are devoid of ideas when it comes to creating wealth, but their imagination knows no bounds when it comes to spending money. With this hostility to ‘nasty’ business comes the inevitable impulse to help those they view as the victims of a heartless capitalist system.

This ‘Throwing money around like a drunken sailor’, as my mamgu used to say (no offence intended to partying mariners), has been brought home to us this week with two cases that saw tens of millions of pounds of public money needlessly expended or lost. The first being the land deal on the outskirts of Cardiff and the other the purchase of Cardiff airport. Though in defence of the ‘Welsh’ Government let me state that the figures involved here are peanuts compared to what has been wasted in Cardiff since the dawn of devolution.

Cymdeith Gofal Objectives

The waste of public funding we have seen in Wales since 1999 could not have happened if the sham devolution we suffer had not brought together an unholy triumvirate to work against Welsh interests.

First we have the aforementioned politicians of the Left, believing that ‘helping those in need’ (even if they’ve been dumped on you) is the right thing to do; then we have the politicians of the Right, who will oppose anything that might disadvantage England, unconcerned that their position invariably disadvantages Wales; and finally, we have civil servants answering to London but ostensibly serving as ‘advisers’ to ‘Welsh’ Government ministers. (Though it should be understood that many politicians on the Left will also adopt an anti-Welsh position, and defend it by arguing that to do otherwise would be ‘narrow’, ‘insular’, ‘nationalistic’ or ‘racist’.)

The only way to change this is to reject all of the existing parties because none of them has either the capability or the will to curb the wasting of hundreds of millions of pounds every year on professional grant-grabbers – most of whom seem to originate outside of Wales – who exaggerate or import problems in order to keep themselves in cosy, well-pensioned jobs funded entirely by the Welsh public purse.

Wales needs a political revolution to overthrow the fools who fund the shysters and those who turn a blind eye because this system damages a country for which they have no real love, a country whose integration with England they will not oppose. Our country.

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