Housing update

January 12, 2007 — Danivon

In the end, the Council decision went like this:

The Tories wanted to defer a ballot, but keep the process going (and this would mean starting the process of working out the costs again and hoping that they were right this time).

Labour wanted to stop the process, and not simply keep trying, as it is clear that tenants will not vote in favour. The Lib Dems supported this, and so the policy went through 18-16.

Afterwards, Labour leader Brenda Smith asked for a cross-party group which could really look at the Housing Department and look for areas where it could make savings without affecting service levels or the cost to the tenant. The Tories refused. I suspect that the Lib Dems would have agreed, especially as this mirrors comments made by Marcella Head.

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Ignorant and Misinformed?

January 10, 2007 — Danivon

Duncan Crow (who you know I love dearly) today responded to a report in the local press that he had called tenants ‘ignorant and misinformed’. Apparently that was the last thing in his mind.

The question that immediately came to mind was whether anyone else is ‘ignorant and misinformed’ about the Housing issue.

For example, the Audit Commission, the TPAS (tenant’s panel) and now the Government Office of the South East have refused to endorse the transfer documentation. Why? Well, it seems that when they said in June that the finances were critical and we needed to get shot of council houses, they overstated the facts a little. The costs have gone up to £60M and now back down to £25M. The ‘deficit’ of £11M that they claimed would force lots of service cuts and increased charges/rents would then turn into a cushion of about £24M.

Back in June, the Tories chose to restart the process and try to shoe-horn it into 9 months with a new set of figures. In November they were warned that this might fail but plowed on regardless. The Lib Dems swallowed the propaganda and concentrated on the finer detail, and so the process rolled on, in the face of opposition from tenants and the Labour group.

A DVD costing £30,000 was sent out, which only 24% of tenants watched and was rendered innacurate one week before it was posted by the U-Turn on increased charges for ‘Lifeline’. More time and money will have to be spent on tidying up the mess and starting yet again and the Tories can only bleat about how it’s not their fault and answer direct questions with tedious waffle or ‘we will get back to you’ (which was the answer they gave to the same question in November).

‘Ignorant and Misinformed’? Duncan is right, it isn’t the tenants is it? Perhaps it’s the Tory Executive, including one Cllr Crow of Furnace Green.

Oh, and on another topic, Duncan Crow has been accused of being a’roundabout robber‘ and the Observer helpfully depicted him as he’d look in a stripey jersey and black mask. Tsk Tsk, naughty Observer.

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Housing revisited

December 8, 2006 — Danivon

Thinking of the last two posts reminds me that a while ago I wrote a letter to the Crawley News which (as well as pointing out that Fastway was down to the Tories at Chichester) said that I thought tenants should vote against transfer as it was in their best interests.

Shortly after that, Duncan Crow challenged me in a reply to say how. I didn’t bother, mainly because Martin Ballard does a far better job. But here’s a few ideas:

  • Tenants will pay higher rents.

    Ok, rents go up every year. But Housing Associations generally charge more than councils.
  • Tenants will pay higher rents

    What is more, the transfer documents do not include anything to stop a revaluation of the stock by the new HA after transfer (this was one thing that the Council referred back to the Executive on Nov 22). A revaluation would probably lead to steep rises for at least some tenants. Would we be hugely surprised it it turned out to be most tenants? Shouldn’t the stock have already had a recent valuation as part of the process going on now?

  • Tenants will pay higher rents (so will home-owners)

    If they are also renting a garage. In fact, most garages are rented by homeowners. When I asked a flippant question from the gallery on Nov 22 about whether garage rents would rise to meet the levels of house rents (as the valuation of the average house is about £2000 and the valuation of the average garage is about £2600 by the latest figures), I was surprised to get the answer from Bob Lanzer that the rentable value per square foot for a garage is indeed apparently more for a garage than for a house.

  • Tenants will pay higher rents

    The way the finances work is this. A new Housing Association will be set up to buy the housing stock etc from the Council. They will pay £30M, or thereabouts. As a brand new entity, it will not have the cash, so will have to borrow at market rates to do that. So, immediately, the HA will not only inherit the liabilities that landlords have (sitting tenants, repairs & maintenance), as well as assume new promises made for them by the Council to replace over 4000 kitchens and 5000 boilers in the next five years, but they will also have a massive debt. Who pays the interest on that? Tenants do, through their rents. If interest rates increase, we can expect that to be passed on.

  • Did I mention that tenants might have to pay higher rents?

    Of course, I could be spouting fearmongering propaganda (but at least I’m not spending £30K of public money on DVDs to do it). After all, the council sets up a rent agreement with the new HA doesn’t it?

    Yes. But the National Audit Office has found that 17% of transfer associations had ripped up those agreements. Scottish Borders was supposed to limit increases to inflation plus 1%. But instead rents went up by 5.5% (inflation plus 3%). Increases in tranfer associations in Scotland are higher than increases in pre-existing Housing Associations, which are higher than for councils.

    And of course these agreements have a time limit. What happens when the time runs out? Well, look to Hastings, where the transferred tenants of ‘Ten-Sixty-Six’ found that the average rent went up by 10% in the year that the agreement lapsed.

  • Not to labour the point, but rents might increase

    Housing Associations are beholden to their ‘owners’ and creditors, not to the tenants. If there are financial problems, there’s no hefty bank account to help out (Crawley Borough Council is £100M in credit), and so the choice is to increase rents, to sell assets, to cut services or to borrow (which will of course mean higher interest payments).

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