Blog 5th February 2018

Blog 5th February 2018

In this week’s blog, I refer to: Service Charges, Lambeth Borough Council, Homes for Lambeth, the Public Works Loans Board, Local Housing Companies, Impact Housing Association, the Riverside Group, Homes England, Salterbeck, Carlisle City Council and AWICS seminars

This week we have published the 2018 edition of ‘All You Want to Know about Service Charges in Social Housing’. This book is designed to give an introduction and overview to service charges in social housing and is fully up to date with all developments. It is designed for people who are not experts in service charges, but who need to understand the basics and achieve an overview of what is going on. It is suitable for councillors, board members, housing managers, finance staff, tenant representatives, members of the service charges team who have limited experience and others who realise that an understanding of service charges can place them at an advantage!

This book is excellent value at £30 plus £3.25 postage and packing. It includes 100 pages. To order a copy please click HERE

Lambeth Borough Council have been in the news this week as they have approved the business plan for their arms’ length Local Housing Company – ‘Homes for Lambeth’ – and agreed to lend the company £300million. The Council will use its prudential borrowing powers to borrow from the Public Works Loans Board and then on-lend to ‘Homes for Lambeth’. ‘Homes for Lambeth’ intends to build 500 new homes by 2023 and a further 1,500 by 2028. It has six regeneration schemes planned of which three (Knight’s Walk, South Lambeth and Westbury) will be completed by 2023. It also has some other small sites. The three initial regeneration schemes are estimated to cost £286million.

We are holding a seminar on ‘Local Housing Companies and Development’ at the Novotel Waterloo in Lambeth in May. For further information or to make a booking, please click HERE

In recent blogs and newsletters, I have written about the proposed takeover of Impact Housing Association by the Riverside Group. Until 2015, I was Chair of Impact and I continue to be a shareholding member. I am hearing that tenants and others are concerned about the lack of transparency in this process. I understand that:

• Tenants in Salterbeck (Impact’s largest estate in Workington) are concerned with the lack of information.
• There are concerns about the fate of the Oval Centre (a community centre in Salterbeck that provides a range of services and that is operated and funded by Impact).
• Tenants are concerned that Impact may end up as a subsidiary of Riverside rather than an equal partner in a merger.
• Local authorities, councillors and members of Parliament are having difficulty in establishing what is happening.

In the absence of information from Impact or Riverside, I would like to offer my own thoughts.

I don’t think anyone could accurately describe what is proposed as a merger. Impact has about 3,000 houses and Riverside has about 50,000 houses and is the fifth biggest housing association in the United Kingdom. Impact has a non-compliant grading with Homes England while Riverside has a compliant grading. This is clearly a takeover.

I am told that:

• Impact prepared a specification of what it wanted and that tenants were involved in this. I do not know which tenants or how they were involved. I do not know what the specification said.
• Impact approached five housing associations and asked them to make proposals. I do not know which they were (other than Riverside) or how they were chosen. I am told that confidentiality agreements were signed that prevent Impact from divulging who they were.
• Impact found that Riverside provided the best match for what they wanted but I don’t know anything about what they proposed.
• Negotiations are now in progress between Impact and Riverside.

I doubt if Impact would become a subsidiary of Riverside. Riverside does not appear to be organised based on geographical areas. Their subsidiaries are joint ventures and for-profit subsidiaries with all affordable homes in a single subsidiary.

The benefit of the takeover of Impact from Riverside’s point of view would probably be to integrate Impact’s properties into the management arrangements that they already have in Cumbria that are focused on the ex-Carlisle City Council properties that they own.

In fact, Carlisle provides a useful case study of how Riverside operate. Carlisle City Council transferred their stock into a stand-alone housing association – Carlisle Housing Association. This was later absorbed into the Riverside Group and lost its identity.

I also doubt if Salterbeck Oval would fit into the Riverside business model. Whereas Impact are a member of the place shapers’ group of housing associations whose vision is to support communities as well as to let housing, Riverside is not and tends to focus on providing housing – an approach that seems to be favoured by Ministers. When I was Chair of Impact, we found it necessary to subsidise the Oval and I don’t think it would fit with Riverside’s business model to do that.

Of course, Riverside and Impact may be working on an agreement that would include local governance arrangements and the continued operation of the Oval. However, none of these commitments by housing associations are binding for ever and after a few years arrangements can be changed. There is currently a trend to ‘collapse’ group structures. For example, I was recently involved with Community Trust Housing that was a subsidiary of Network Housing in Stockwell Park, London. They were wound up by the parent association and their stock absorbed into Network. Similarly, commitments to continue services are usually time limited.

I am not saying that the takeover should not happen, but I am saying that the process should be honest and transparent and shareholding members, tenants, councillors and local communities should know exactly what is being proposed. I am not alone in this view. For example, a local councillor has contacted me to say that:

“I certainly think that shareholders and tenants need to be given better information than they appear to be getting.”

I have spoken to Homes England and they assure me that the takeover cannot go ahead without the approval of the shareholding members. Impact has had a long-standing policy of encouraging tenants and others in the local community to become shareholding members. It only costs £1 and should ensure a say in the takeover. I would advise tenants and anyone else with an interest in Impact to apply to join. To view or download an application form, please click HERE

I will continue to keep readers of this blog and of the ‘AWICS Housing News’ informed of developments at Impact Housing Association.

Our next seminars are on:

• All You Want to Know about Service Charges in Social Housing
• All You Want to Know about Local Authority Housing Finance
• Funding Supported Housing
• Local Housing Companies and Development

For further information or to make a booking, please click HERE