PLEASE APPRECIATE THAT I GET SENT MORE INFORMATION AND LEADS THAN I CAN USE. I TRY TO RESPOND TO EVERYONE WHO CONTACTS ME BUT I CANNOT POSSIBLY USE EVERY BIT OF INFORMATION I’M SENT. DIOLCH YN FAWR
The old problems are:
- An ‘arms race’ among housing associations to build more and more properties (often where there is little local need) to deter predators from swallowing them up.
- Certain housing associations being very close to the Labour management team in Cardiff docks with this closeness giving them an unfair advantage over competitors.
- I say ‘competitors’ because, unlike the old system of the local council being the major or sole provider of social rented housing in a locality, we now have any number of housing associations operating in the same area.
- Social tenancy allocations in Wales being made on an Englandandwales basis.
WARNING: This report gets complicated given all the players and different commercial entities. So sit up straight and pay attention!
‘BUILD THEM AND THEY WILL COME’
Cartrefi Conwy Cyf came into existence in 2008 with the transfer of Conwy council’s housing stock. In 2015 it branched out with the creation of a subsidiary, Creating Enterprise CIC (Community Interest Company).
Creating Enterprise CIC is now seeking ‘new income streams’ on the north coast, an area where north west England likes to dump its social problems.
What could possibly go wrong?
And Creating Enterprise CIC would appear to have found new sources of income, for the latest accounts tell us that turnover increased by over 700% between 2017 and 2019. That is impressive.
As stated, Creating Enterprise is a subsidiary of Cartrefi Conwy (and many or even most of its ’employees’ may be Cartrefi Conwy tenants) that maintains and upgrades Cartrefi Conwy properties. Nothing unusual in that, many housing associations have in-house maintenance teams.
But there’s not much profit in such an arrangement, it’s just a housing association giving work to a wholly-owned subsidiary. The only way to make money is for the subsidiary to branch out. Which is what has happened with Creating Enterprise CIC.
But now it gets a bit complicated.
For while Companies House confirms that Creating Enterprise CIC exists, and with a charge held by Cartrefi Conwy that confirms CE’s subsidiary status, there is another Companies House entry for Creating Enterprise CIC, linking it with Calon Homes LLP. Explained in the panel below taken from Creating Enterprise CIC’s accounts.
As you’re read, the other partner in Calon Homes LLP is Brenig Developments Limited. There is a charge against Calon Homes LLP held by Creating Enterprise CIC, which in turn has a charge held by Cartrefi Conwy. Which means that, ultimately, housing association Cartrefi Conwy is in partnership with private company Brenig Developments.
Curiously, there is another, and different, Companies House entry for Brenig Developments Ltd suggesting that it’s a dormant company. To confuse matters further there is also a Brenig Construction Limited and a Brenig Homes Ltd. (None of which should be confused with Brenig Fish & Chips of Tregaron. Pass the vinegar!)
First question: Why did Cartrefi Conwy Cyf, via Creating Enterprise CIC, go into partnership with a dormant company?
Second question: There is an outstanding charge against Brenig Homes Ltd with Kennah Motor Credit Ltd, of Cheshire, a dissolved company. But why would a building firm seek credit from an auto finance company?
Third question: This report from Wales247 in September tells us that Calon Homes is building 11 houses in Middlewich, Cheshire. Why is a company half-owned by a publicly-funded Welsh housing association building private dwellings in England?
Fourth question: The architects involved with Calon Homes’ 111 Conwy properties mentioned in the Wales247 report are Base Architecture and Design, which is expanding. Does this (from the report I’ve linked to) give the game away, “Conwy is a thriving area with a lot of development and investment going on, particularly along the A55 corridor through to Anglesey,”
Fifth question: Why do we also read of Base Architecture and Design, “Its clients in the region include Brenig Construction, one of North Wales’ leading civil engineering and construction companies”? At 31.10.2018 Brenig Construction Ltd had a net book value of just £84,637.
Sixth question: This report, from last Thursday, tells us that Creating Enterprise is “in partnership with Norfolk-based Beattie Passive”. The only Beattie Passive company in Norfolk is Beattie Passive Norse Ltd. This company has ‘accumulated losses’ of £4,589,441. That’s £4.5m.
What we have here is a publicly-funded housing association – whose assets consist primarily of a stock transfer of council housing – playing at being a private company through subsidiaries and partnerships. Cartrefi Conwy justifies building properties for commuters, retirees and others from over the border by arguing that its share of the profits from this work will be used to build social housing.
But is that a sensible model? Let’s say Cartrefi Conwy lends Creating Enterprise CIC one million pounds that in turn is lent to Calon Homes to build in partnership with a private company. And let’s say that the profit on that project is £500,000. After being split with the private developer, and after admin, staff, and other costs are taken out by Creating Enterprise and Calon Homes, Cartrefi Conwy might be lucky to get back £50,000 for social housing. So why not just spend the original £1m on social housing?
The true purpose is building open market housing along the A55 commuter/retirement belt. And when we realise that most of Cartrefi Conwy’s other efforts go into providing care homes, retirement bungalows and flats, it becomes clear that it’s just an agency for the further colonisation of Wales.
OLD AND NEW
In the introduction I listed the established problems with ‘social housing’ in Wales. Having got this far you’ll know that the new problems stem from diversification.
But the problem is not confined to Cartrefi Conwy. Let’s go to the other end of the country and look at Mill Bay Homes in Pembrokeshire, a private company and a subsidiary of Ateb (formerly Pembrokeshire Housing). Despite being a private company Mill Bay has a “revolving credit facility with the parent”, Ateb.
Which in practice means that money held by Ateb that should be used to provide social housing is loaned to Mill Bay to build homes for ‘investors‘, ‘retirees‘ and others, including holiday home buyers. (Check those links.)
Clearly, the system in Pembrokeshire differs from that up north in that instead of entering into a partnership via a subsidiary with a private company, with the subsidiary getting 50% of the profits, Ateb loans money directly to in-house subsidiary MBH, which does the building.
But much of Mill Bay Homes’ profits will be eaten up by its own running costs, for it is after all a separate company with its own staff and overheads. Unless MBH is selling its properties at greatly inflated prices it’s difficult to see how it can ever repay Ateb.
An example of how Mill Bay Homes operates is its St Davids’ development. Due to the demand from England for property in and around St Davids most locals experience great difficulty in finding a place to buy at a price they can afford.
Yes, a small number of properties on the new development are reserved for locals (with a very narrow definition of ‘local’) and a small window in which to apply. Otherwise, it’s “32 executive dwellings . . . 2, 3 and 4 bedroom bungalows.”
Executive homes and retirement bungalows. Just what local first-time buyers are looking for!
Mill Bay claims to be meeting the local need in St Davids but in reality it’s just capitalising on the external demand.
But nobody cares, for there is neither regulation nor oversight of housing associations.
An example would be the ‘Welsh Government’s ‘Shared Ownership Wales’ scheme – a disguised form of leasehold – that should only be offered by Registered Social Landlords (registered with WG); yet it’s available in St Davids and elsewhere through Mill Bay Homes, a private company that is not a RSL.
And all the while we hear politicians complain about the lack of social housing, and how we must build more – so more money is given to housing associations . . . and spent on ‘diversification’.
Let’s face it, we are in the same position with ‘social housing’ as we are with the third sector – keep a problem alive and publicised in order to keep the funding flowing. If housing associations wanted to meet the demand for social housing – i.e. for good quality rented accommodation – then they would not be launching subsidiaries.
The bottom line is that social housing in Wales has been privatised, and to pretend otherwise is deceitful. I tried to explain it last year in The Privatisation of Welsh Housing Associations.
Finally, those who think that it’s better to see private housing built by Welsh housing associations than by major English companies should think again. For they don’t challenge Persimmon, Wimpey, and the rest, they complement them by building the smaller developments that the volume builders can’t be bothered with.
The social housing system in Wales is broken, it no longer serves its original purpose. So we need a new system to provide affordable rented accommodation.
♦ end ♦