Rob Shorrock

Received a copy of the stock transfer offer document, DVD and the latest edition of Your Homes Your Choice. It seems that promises are now realities and intentions are now facts. Frances Cartwright (Housing portfolio holder) has decided to help us overcome our anxiety and misunderstanding by telling us that, 'South Lincolnshire Homes can meet those demands.'  I feel so reassurred. Facts boxes are scattered throughout the offer document providing useful information such as ' Transfer Facts - Communal bathrooms would be eliminated with every flat having its own bathroom.' But hold on, earlier in the document this is something that council intends to do anyway. How can this be a fact that is excusively related to transfer?

Here is the problem. It is about language and the positioning of the council (that exists and has a solid track record in delivering democratic housing services) as the poor cousin to the bright, glossy, modern new housing association (that has no track record, is currently dormant and has to borrow everthing on the open market). The notion of balance and objectivity in making the case for stock transfer and for council retention has been flushed down one of the communal toilets.

Why are SKDC not abiding by the CODE OF RECOMMENDED PRACTICE ON LOCAL AUTHORITY PUBLICITY that states:

19. Legitimate concern is, however, caused by the use of public resources for some forms of campaigns which are designed to have a persuasive effect. Publicity campaigns can provide an appropriate means of ensuring that the local community is properly informed about a matter relating to a function of the local authority and about the authority's policies in relation to that function and the reasons for them. But local authorities, like other public authorities, should not use public funds to mount publicity campaigns whose primary purpose is to persuade the public to hold a particular view on a question of policy.

The offer document and associated publicity is clearly designed to get tenants to vote in favour of stock transfer and is therefore in breach of this code. Care is also supposed to be given about the language used. Statements that South Lincolnshire Homes will deliver x, y and z should be couched in the language of ‘plans to' or ‘intends to' deliver. The reason for this is that promises should not be construed as facts. This is clearly not the case in the offer document and associated publicity

Tenants have also not been given any information regarding the long term stability of South Lincolnshire Homes. The business plan will not be available to the public or indeed tenants. It will set out a more realistic picture of expenditure and borrowing over the full 30 year term.  It is also worth noting the following:

"Particularly in their early years, transfer associations' highly indebted status and their need to honour often very specific 'transfer promises' makes them highly vulnerable to unforeseen changes in the economic or regulatory environment. This can impose substantial pressures on inexperienced management boards, sometimes necessitating regulator intervention. Indeed, nearly a fifth of transfer associations have given rise to serious (Housing Corporation) concerns in respect of their financial viability or governance (Improving social housing through transfer, National Audit Office).

It is this risk that is not being shared with tenants. We would argue that a financial risk assessment is crucial as ultimately it would have an impact on repayments of loans and hence on rents. A significant interest rate rise would be the catalyst for the housing association to go to the council and the housing corporation to request a change in what they have agreed to deliver. The idea being given in the offer document is that rents and service charges will remain within current government rules of inflation plus 0.5% This is meaningless without realistic projections of what this might mean in the future.

The right for tenants to request self management of their estates is also removed in the process. This is skipped over as something that tenants have never raised but is a fundamental issue about tenant control and democratic ownership:

The Housing Corporation and the National Housing Federation  resist the extension of the Right to Manage to their "social landlord" sector, and recent research has found no instances of tenant management organisations forming in transferred stock after transfer has taken place. While central government may, at one level, endorse community led approaches, experience shows that other sections - such as regional government services - can be hostile and support advice which maintains the integrity of council-wide, single transfer solutions. Neighbourhood management - measures to give residents more control over the range of street-level services - has been implemented in a way that avoids the choice-led TMO model, and maintains the state's role in prescribing where and how control may be devolved to the neighbourhood level.

 Isaacs, 2004

 The council and other proponets of the stock transfer process like to argue there is no alternative because of the constraints placed on councils in terms of borrowing and that we have to pay 4.3 million per year into the national Housing Revenue Account (HRA). What is ignored in the Offer document is that we receive an annual repairs and maintainance allowance from government and rent rebates that means there is no real loss of funding from the Housing Revenue system. None of this is mentioned in the offer document.

SKDC's stock transfer campaign rumbles on. It is increasingly mind boggling to discover more and more about the public deceit that the stock transfer process contains, and breath-taking to listen to those taken in by the hype.

The government policy that housing associations and councils should charge the same level of rents for similar properties would seem on the face of it to be a good idea. The only problem is that Housing Association rents are generally higher than council rents and housing associations that take over the running of council housing can't do it as cheaply.  According to the Public Accounts Committee this is an average of £1300 more per home. This and  current government policy will lead to higher rents for tenants living in either council or housing association houses.

This issue is also one that affects the wider public. Higher rents mean higher housing benefit payments from the Treasury. If public housing is transferred, as SKDC intends, to an independent housing association the public loses an asset (and the ongoing value of this over the next 30 years which is not included in the stock transfer figures) The process of stock transfer spends public money on appointing consultants, promoting the transfer, setting up the housing association as well as the time of officers of the council in working on the transfer.  If it goes ahead the government will also cream of a percentage. Conservative estimates would indicate that this will all cost around £10 million pounds before any improvements are made to one single home. Hardley, a good use of public money.

The impression given by those in favour of stock transfer is that it is the only way to meet tenants' aspirations. Yet the government is under intense pressure to change the housing finance system to allow councils to keep all rents and right to buy receipts to invest in council housing, which would certainly allow SKDC to do what tenants wanted at a fraction of the cost of stock transfer. The Audit Commission has stated that the current system of nationally pooling all rents is inequitable and unfair; the Labour Party conference this Autumn will demand a pro-council investment option for the fourth time; the minister in charge has recently said that she wants to see if some councils could be ‘released from the constraints of the housing subsidy system.'

All of this clearly indicates a crumbling policy that is about to change. It would be a sad irony if SKDC pushes ahead with stock transfer only to find a few months later that the government changes the current policy and gives full freedoms to councils to invest in council housing.

If there was ever a good time to transfer council housing it certainly isn't now.