Blog 12th November 2019

Nov 12th 2019, 20:17

Blog 12th November 2019

In this week’s blog, I refer to: UK Parliament; Russia; Brexit; General Election; Boris Johnson; Dominic Grieve; Conservative Party; Impact Housing Association; Riverside Housing Association; Regulator of Social Housing; Service Charges; Seminars & Training.

The UK Parliament's Intelligence and Security Committee has prepared a report into possible Russian interference in the United Kingdom's 2016 Brexit referendum and 2017 general election. It was sent to Boris Johnson weeks ago, but the Prime Minister is yet to sign it off and make it public, according to committee chair, Dominic Grieve MP. The fifty-page report's publication is therefore not expected until after the general election on 12th December. 

I recently came across an interesting book called ‘The Foundations of Geopolitics: The Geopolitical Future of Russia’. It was written by Aleksandr Dugin. Apparently, the book has had a significant influence with the Russian military, police, and foreign policy elites and has been used as a textbook in the Academy of the General Staff of the Russian military.

The book considers ‘the battle for the world rule of Russians’ and states that Russia remains ‘the staging area of a new anti-bourgeois, anti-American revolution’. It proposes a ‘Eurasian Empire’ based on Russia and constructed:

“On the fundamental principle of the common enemy… and the refusal to allow liberal values to dominate us."

Military operations play a relatively small role in the plan. The book advocates a sophisticated programme of subversion, destabilisation, and disinformation spearheaded by the Russian special services; that would return much of Europe to the Russian sphere of influence.

A key objective is that:

“The United Kingdom should be cut off from Europe”.

Meanwhile, 'Business Insider’ reports that:

  • The Conservative Party has received a surge in donations from Russians in recent months.
  • Donors with ties to Russian President Vladimir Putin have donated hundreds of thousands of pounds to the party.
  • The same donors have paid for meetings with senior government figures including Boris Johnson.

The Sunday Times has reported claims from a whistle blower about ‘serious concerns’ about the time Dominic Cummings, the government’s political strategist, spent in Russia in the 1990s.

An ‘Open Democracy’ investigation found that the United Kingdom Conservative Party received at least £498,850 from Russian business executives and their associates between November 2018 and October 2019. This was a significant increase from the previous year, when such donations amounted to less than £350,000. I understand that these Russians are resident in the United Kingdom and that it is legal for political parties to accept their donations.

It has also been suggested that there are links between Russia and other British political parties.

While I wouldn’t go so far as to say that the United Kingdom government or the opposition is being manipulated by the Russian government, it appears to me that ‘Brexit’ supports the Russian strategy of disrupting Europe and driving a wedge between Britain and other European states.

I will therefore be very interested to read the UK Parliament's Intelligence and Security Committee’s report when it is published and would suggest that it would be in the best interests of the United Kingdom if it was published prior to the election on 12th December so that everyone is aware of the facts before they vote.

Readers of this blog will recall that I was a member of the Board of Impact Housing Association from 2009 to 2015 and was Chair from 2011 to 2015. Throughout that time, Impact maintained a top V1/G1 rating with the Regulator. However, in 2017, Impact was downgraded to a non-compliant V3/G3 and the Board proposed a ‘merger’ with the Riverside Group that could more accurately be described as a ‘takeover’.

As a shareholding member of Impact, I was shocked at the way the Board behaved, mainly because of:

  • Their mismanagement of Impact that led to the downgrade.
  • Their decision to bring forward the 2017 AGM to before the Regulator announced the downgrade so that they could tell members that Impact’s finances were ‘strong and stable’ contrary to the conclusions of the Regulator.
  • The agreement that they reached with Riverside failed to protect Impact’s values, services or tenants; and was supported by misleading information. It was also made without enough engagement with shareholding members or tenants.

The Impact AGM in 2017 where members were told the finances were 'strong and stable'. The following week the Regulator downgraded the association's rating for financial viability from the top V1 rating to a non-compliant V3 rating.

I opposed the ‘takeover’ at the 2018 AGM, but it was approved.

Interestingly enough, only a year after the ‘takeover’, everyone who was a member of the Board of Impact prior to the downgrading has been replaced. Impact also has a new Finance Director.

Both Riverside and the Impact Board made great play at the time of the ‘takeover’ about how Impact would continue to act independently within the Riverside Group. Tenants were even told in writing that their landlord would not change. In view of Riverside’s highly centralised business model, I questioned this at the time. I asked whether Riverside planned to do with Impact what they had previously done with the Carlisle Housing Association – namely wind them up and integrate their homes and operations into the parent housing association. I was assured by representatives of Riverside at the highest level that this would not happen.

However, Riverside and Impact have now decided – only a year after the ‘takeover’ - to make a ‘transfer of engagements’. This would mean that all Impact’s operations, including their housing stock, would move to Riverside and they would become the landlord.

To view or download the text of the letter that Chairman Cullinan has sent to tenants to inform them of this proposal, please click here.

Impact was always ‘more than just a Housing Association’ and provided a wide range of other services including a community centre at Salterbeck in Workington; foyers in Kendal, Penrith and Whitehaven; a furniture service; and a domestic violence service. This approach is not consistent with Riverside’s business model so I also raised concerns about whether these services would continue to be provided. The response from Riverside’s representatives was rather vague. I would not be surprised if we see some services closed.

You may be thinking that I am just having a moan. However, I think that this may be a cautionary tale for other housing associations and their tenants and that the Regulator of Social Housing should consider taking a different approach to regulation to ensure greater transparency and accountability especially when providers are downgraded or when mergers or takeovers are being considered.

I wrote about this in my response to the Housing Green Paper in November 2018. A copy of my response can be viewed or downloaded by clicking here.

The government has yet to respond to the consultation on the Green Paper. Whichever party or parties form the next United Kingdom government, I hope that their Housing Minister will address these issues.

Our first seminar of 2020 will be on ‘All You Want to Know about Service Charges in Social Housing’. This seminar is a very useful introduction and overview to this important subject.

For further information about ‘All You Want to Know about Service Charges in Social Housing’ or to make a booking, please click here.

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