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Right move for tenants
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Following the recent merger, it is hoped the Link Group will improve the housing stock for former Port Glasgow Housing Association tenants. We hear from Link Chief Executive Craig Sanderson, about the benefits.
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Following the recent merger, it is hoped the Link group will improve the housing stock for former Port Glasgow Housing Association tenants. We hear from Link's Chief Executive, Craig Sanderson, about the benefits.
Interviewer:
Can you explain about the merger with the Port Glasgow Housing Association? What was the thinking and what was the build-up to that?
Craig Sanderson:
We were invited by Port Glasgow Housing Association last February to talk to them about their financial position and their future. Port Glasgow Housing Association was formed to take over a former Scottish Special Housing Association, Scottish Home Stock, in 2002. Part of the reason for doing that was that they agreed to start a comprehensive improvement program. The houses were pretty much past the sale-by date in many ways.
Within the five years between them doing that and coming to speak to us, they actually had not been able to do very much; their financial plans were awry. They had also been selling more houses under the right-to-buy than they had anticipated. Then a new thing had come along, called the Scottish Housing Quality Standard, which was a higher standard then they originally thought they would have to bring the houses up to.
Putting all that together, they were having a bit of a problem. They had approached a couple of the local, community-based associations, who really didn't have the wherewithal to be able to borrow, for example, enough money to start this. But as we did, we were able to use our asset-base in our balance sheet to borrow money. And that is what is happening: we are going to borrow around two million pounds to kick-start an improvement program.
That had to go to a ballot of tenants and members, as you can not just transfer to another Housing Association. That was why the so called 'Transfer of Engagements' took place, which means that their stock and the tenants moved into Link, because they wouldn't have been able to borrow the money themselves. The money had to be borrowed in their own name for their tenants. It was going to be a much-improved service for tenants, but what they were sacrificing, was their sovereignty.
That was different from Lockfield Housing Association. Lockfield joined the Link Group the year before, but because they were in good financial position, they came on as a self-contained subsidiary within the Group, and have remained as a separate, stand-alone company. That is really the reason why the 'Transfer of Engagements' took place.
The idea is that we will embark upon a program of improvement that will meet the Scottish Housing Quality Standard by 2015, which is what they have to do. The price that they will pay for that will be rent increases that are no more than, or equivalent to, inflation in the medium to long term. We believe that none of that could have happened without the 'Transfer of Engagements' to somebody like Link.
It did not have to be Link -- we were fortunate enough to be chosen. What has happened is that the board members who used to be on the Port Glasgow Board, some of them are now involved on Link's Board. So, we have ticked a few boxes, you know. Now we have to get on with that.
Interviewer:
What sort of changes will it mean for Port Glasgow Housing Association and their tenants? Obviously, they were in favor of it, as you mentioned. You have substantial benefits to the service. What will it mean for them on a day-to-day basis, if you like?
Craig:
Well, on a day-to-day basis they will be seeing improvement work starting. Obviously, they will have to be getting their service delivered from a different source, because beforehand there was a local office in the Port Glasgow area, in Dubs Road, but the staff all moved onto other jobs before the transfer took place. The local services are now provided from Larkfield Housing Association, which is on the far side of Greenock. We have got to get used to delivering that.
On a day-to-day basis, they will be probably seeing more people around and about with clipboards, because we will be having a plan which houses we are going to do up first, and all that sort of thing. But apart from that, they should not notice too much of a difference, you know - we would like to think that it is more of the same, but better.
Interviewer:
I was going to say that, I suppose, change is always a difficult thing for anyone to get used to, but looking at the long-term picture, it is going to benefit them, we hope.
Craig:
Oh definitely. If we have not even started to have vans on site and scaffolding going up and so on, I am sure they will soon tell us. It is all very well: us coming in here and saying this is what we are going to do - but then we have to do it.
Interviewer:
You mentioned, Larkfield was, obviously, in the same or similar position, but had slightly different financial footing. Are there lots of examples of these smaller Housing Associations having similar difficulties to Port Glasgow?
Craig:
There probably are, but it is a very sensitive issue. I have been there for over 30 years and there has always been a debate about the large housing associations: are they better than the small housing associations? Or are the small housing associations better, because they have this distinct community base?
Our community is made of 22 local authority areas in Scotland. There has been an argument that small is best. Well, yes, it can be. But the large associations can also provide a good service. And they can use their financial might, if you like, to do broader things.
You know that we widen roads, we do social enterprise support, we do care in the community -- we do all of these sorts of things. And the reason why we can do that is because we can take risks to get these sorts of things going; because we have put money aside for a rainy day over a 40-year period.
We have been going a lot longer than the smaller associations, but that is not to say that we are any better. The problem is, though, that if a small association has some difficulty with its funding or anything like that, it is more exposed than we are.
So what we then say is: "OK, we recognize that you have got difficulties", and we try to make sure that you retained as much of your local control as you can and as is reasonable. But we are not going to force you to enter a ridiculous situation.
If we had said to Port Glasgow: "Oh, you can be another Larkfields and you can continue as a subsidiary of Link", that would have been the wrong advice, because the circumstances are so different.
There probably are a number of associations out there, and it may be that we will get more approaches as things go on, because up until now, they have been able to go along without too much pressure being put on them. But the new Scottish Government Administration has said quite clearly: "Housing associations have got to become more efficient." They have made it quite clear, and nobody has stepped back from that. They are saying that much more strongly than any previous Administration.
Interviewer:
Is that a good thing or a bad thing? [laughter]
Craig:
Intellectually, you have to say that we have to become more efficient. We have got to recognize that there is less money around for public sector projects.
But the "Harp" says: "Why were housing associations needed in the first place?" It was because the councils were not doing a good enough job. Other ones started because they were in places like parts of Glasgow or parts of Calvin Hill, where there is multiple occupation and common repairs could not get done or anything like that.
In the '70s, that is why the housing associations were needed. That has not gone away. In fact, we might be going in a circle here, because housing associations did these areas, then the tenants were given an enhanced rate to buy. So, what happens is that the houses are sold, and then they sell to somebody else who is an absentee landlord, and you find yourself in a situation like 30 years ago: with multiple ownership, and you can't even get common repairs done.
I believe in the benign dictatorship, I suppose. The housing associations have assured that they can control the quality of an area, whether they are big or small. But, up until now, I would say there is a price you have to pay for that.
If we are going to indulge in community consultations to the extent that we have - to talking to people, which is what we got base for, it has got to be recognized by the Government that you have your pay for that. Community consultation does not come cheap.
Interviewer:
I suppose that what is best for the tenants, is key to what everyone is trying to do. And it is a case of getting down to detail and trying to sort it all out.
Craig:
I would not say that it is just tenants, either. I think that we have recognized that mixed-tenure schemes are a good idea. We are quite happy to create shared-ownership for people, the home-stay thing, and others like that. It is all to do with service, but part of service is giving somebody a decent-sized house, which I have not mentioned up until now.
The government is saying that the housing associations can provide more houses for less money. Well yes, of course we can. We can do what has happened in England. What has happened in England? They have built huge developments and reduced space standards. There is less common area. There are less common facilities. Of course you can provide a house cheaper if you do not do that!
They also do not do any community consultation. They just go into an area and build 5,000 houses. The ability to do that in Scotland is very limited. You do not have that scale of service available, and you have a tradition of doing things in conjunction with local people.
We are trying to get the Government to realize now that, OK, we are up for making efficiencies, and that we do not want to waste money. But, what we do spend our money on, is valued, and you have got to put a price on that, as well as the savings you can make.
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Podcast kindly provided by Social Enterprise Podcasts.
