Honest Promises? The GHA three years after the transfer vote

IN March 2002, Glasgow council tenants voted by a narrow margin to transfer their homes to Glasgow Housing Association.[i] They were persuaded to do so by promises of repairs and investment given by many senior politicians, including First Minister Jack McConnell.

Three years on, the promised repairs and investment have not materialised. Instead GHA has placed the majority of its houses in a “question mark” appraisal category – meaning no investment for those houses – and has announced that it now:

“aims to balance the commitments given to tenants at transfer against the potential for wasteful expenditure in properties that may be demolished soon after.”[ii]

When all of its housing stock will have been moved off to successor organisations. That will allow the GHA to walk away from the mess of ex-Council Housing in Glasgow (for which it is partly to blame), leaving successor organisations to struggle to deal with the majority “question mark” houses. Most tenants will be left in a worse state than ever before.

This ought to be surprising, because commitments to the contrary were given as promises, as guarantees, in public statements made by Government Ministers while tenants were voting on the transfer proposal.

"By transferring their homes tenants will reap real benefits – warm, dry homes with modern kitchens and bathrooms, guaranteed rent levels and a much greater say in the future management of their homes and estates… Investment in properly insulated and heated homes will improve people's health"

Notice the difference then, before the vote, and now, when commitments are to be "balanced" away.

“Our demolition estimates are in the region of 11,000 homes not having a long term sustainable life.”[v]

The Investment figures contained in this chapter are based on the 84,168 units contained in the property database and are divided into 73,314 for retention and 10,854 for demolition or disposal.[vi]

That was based on an exhaustive (and expensive) stock condition survey that had just been carried out by FPDSavills.

But after the transfer, when it became time to consider actually spending money on tenants’ homes, the GHA decided to add an extra 30,000 houses to the list that would not receive investment.

The GHA calls the new 30,000 houses “question mark” properties, and has made their status the subject to an open-ended option appraisal process. No one expects option appraisal to be completed before 2007, when the GHA ceases to exist in its current form.

That means that the majority of GHA houses are now either intended for demolition or are “question mark” properties, and as such will not receive investment by the GHA.[vii] They are stuck in a black hole of GHA neglect.

The promises of investment – of new kitchens, damp-proofing, roofs, overcladding – are not to be delivered on. Because the GHA now tells us that it:

“aims to balance the commitments given to tenants at transfer against the potential for wasteful expenditure”[viii]

By wasteful expenditure they mean expenditure on tenants, generally poorer tenants in the most deprived housing, who some in power might think of as the undeserving poor.

But it is precisely the more run down housing that needs the investment so urgently. Precisely those houses which have the severe dampness problems and dilapidated kitchens and bathrooms. The better quality houses already obviously have a long term future, before any new investment is spent on them, because they need much less investment. It is not surprising that the GHA finds itself unable to spend even its investment grants when it is so hamstrung in its choice of properties to invest in.

Some of the neglected majority of GHA tenants might hope to get one of the GHAs planned newbuild houses, but it is a slim chance - just 3,000 houses to replace more than 30,000 houses.

The GHA is certainly not short of cash to spend on tenants – if it chose to do so.

The GHA had £55m “non-specific” grants to spend on investment from the Scottish Executive – the GHA only bothered to spend £49m of that on investment[ix].

The GHA has £725m bank loans available to draw upon at any time. The GHA has chosen not to draw on any of that money.[x]

The GHA takes in £200m rent from tenants each year. But the GHA only spends £44m back on repairs and maintenance. The GHA spends twice as much on staffing and running costs – which are £96m.[xi]

This cash mountain ought to be an embarrassment for GHA and its ministerial sponsors. But it is not – and this adds to the suspicion that such a lack of investment was intended from the outset.

In March 2003, The Scottish Executive issued a News Release which quoted First Minister Jack McConnell:

" The transfer will unlock massive investment in some of the city's most deprived communities. It will lead to the creation of thousands of new jobs and apprenticeships – and tenants can look forward to getting the warm, dry, affordable homes they deserve."

"Tenants voted for the transfer last April and I can assure tenants that the promises made at the ballot remain a key part of the transfer."[xv]

Council Leader Charles Gordon had earlier categorically stated in a newsletter posted to every tenant:

"Four years after transfer, every tenant will have a guaranteed warm, dry and centrally heated home."[xvi]

Other Ministers rushed to join them in making commitments that would not be delivered.

“If tenants vote yes in the Glasgow housing stock transfer ballot, the Glasgow standard will ensure that Glasgow Housing Association’s homes are safe and structurally sound, secure, with modern kitchens and bathrooms, warm, dry, dampfree with affordable central heating and energy efficient. The Glasgow standard will include specialist works to multi storey blocks and non-traditional houses, remodelling of houses, security measures, improvements to common areas and environmental works. If tenants vote yes in the Glasgow housing stock transfer ballot, every home with a long-term life will be fully modernised to the Glasgow Standard within 10.5 years of transfer.”[xvii]

“I'm delighted that Glasgow Housing Association has committed to rolling-out developments to design out crime following a successful outcome in the ballot on the transfer of Glasgow's housing stock. This means that not only would tenants have warm, dry homes - they would also have secure homes. Safer communities is a further good reason for tenants to vote 'Yes'.”[xviii]

"The Scottish Executive is committed to rebuilding and strengthening communities. As part of that we are determined to put in place the necessary resources to regenerate Glasgow, including an adequate supply of good quality rented social housing with tenants in control."

“…if tenants vote yes in the ballot in March they will see greater investment, not only in their housing, but in the wider community… Transfer to the GHA will bring tenants warm dry homes, modern kitchens and bathrooms.”[xix]

During the transfer vote, then Communities Minister Iain Gray wrote to every tenant:

“I believe, as does the First Minister and the rest of the Scottish Executive that this [Glasgow’s Housing] state of affairs is not acceptable - that is why we are backing the Glasgow Housing Association’s proposals to change the city’s council housing for good.

And that is why we have put together a financial package with the UK Treasury, which will pay off the outstanding debt and let the Association borrow a further £700 million from the private sector to invest in your homes. This means that, over the next 11 years, it will have a total of £1.6 billion to spend on building a brighter future for you and your family.

If you say yes to the transfer, you will be voting for social ownership, not private landlords. You will also be voting for guaranteed rents rights, repairs and regeneration.”[xx]

“This [transfer] is great news for tenants in Glasgow and allows the process of improving the quality of Glasgow's socially rented housing to move forward. These proposals represent a significant step towards our goal of tackling social injustice. They will provide good quality, affordable housing for all, help tackle poverty and disadvantage, rebuild and strengthen communities and give new opportunities for jobs in construction.”[xxi]

But the promises never became reality. And we are now told they are to be "balanced" out of existence. We're not told this by Jack McConnell or Charles Gordon - they now stay silent on Glasgow Housing Association. But they remain in charge. Glasgow Housing Association is overseen very closely - effectively controlled by - Communities Scotland, an agency of the Scottish Executive directly responsible to the Communities Minister. And the board of management of GHA was, when I was on it and I believe this is still the case, was dominated by it's Vice Chair, the former Labour politician Maria Fyfe, appointed to that position at the urging of the Scottish Executive. Four Labour Councillors are also members of GHA's Board of Management.

So the First Minister is in a very good position to see his promises, his guarantees, be acted upon - if he chose to do so. He does not, and it is becoming increasingly difficult to believe that he ever intended to deliver on his guarantees to tenants, that he ever intended his public statements on housing transfer to be statements of truth. His integrity, and the integrity of his Ministers, is under question.

THE RHETORIC:
What will GHA do for my house?, sent by GHA to every tenant immediately before the transfer vote. [xxii]
what

THE REALITY:

Photograph of inhabited GHA close, January 2005, Maryhill. Squalid housing conditions like these are commonplace for GHA tenants.

Dampness in GHA house, January 2005, Milton. Serious health problems can result especially in children because of dampness like this, yet the GHA will not act on this in its majority "question mark" properties.

Photograph of inhabited GHA close, January 2005, Maryhill.

New (19 year old) GHA houses in Maryhill - but near expensive West End - being prepared for demolition, January 2005.

GHA "question mark" houses awaiting option appraisal, January 2005, Maryhill. Tenants must continue to live in closes such as these even with neighbouring flats boarded up.

Disabled GHA tenant Frank Kennedy protesting GHA Anniesland Office, January 2005. Mr Kennedy has been refused an extension to his GHA house to make it wheelchair accessible. Such adaptions were carried out with little fuss before transfer.

[i] 58% for transfer, 42% against. Tenants back housing transfer, BBC, April 2002, online at http://news.bbc.co.uk/1/hi/scotland/1911929.stm

[ii] Draft GHA 30 Year Business Plan, November 2004, Page 31, online at http://www.gha.org.uk/publications/30y_business_plan/business-plan-cons.pdf. Emphasis added.

[iii] Draft GHA 30 Year Business Plan, November 2004, Page 20 and Page 5 online at http://www.gha.org.uk/publications/30y_business_plan/business-plan-cons.pdf.

First Minister backs housing transfer, BBC, 19 February 2002, online at http://news.bbc.co.uk/1/hi/scotland/1828982.stm

[v] GHA Press Release, 1 October 2001, online at http://www.gha.org.uk/gha/html/pressreleases01-10-2001.htm

[vi] GHA Final Proposal, February 2002, Section 4.6, online at http://www.gha.org.uk/final-proposals-feb/chapter4.htm

[vii] In addition to the 30,000 ‘question mark’ houses, a substantial number of the 10,867 houses marked for demolition in 2002 are still part of GHA stock. GHA estimates its stock will be 75,167 houses at 1^st April 2005 in its Draft GHA 30 Year Business Plan, November 2004, Page 30, online at http://www.gha.org.uk/publications/30y_business_plan/business-plan-cons.pdf.

[viii] Draft GHA 30 Year Business Plan, December 2004, Page 31, online at http://www.gha.org.uk/publications/30y_business_plan/business-plan-cons.pdf. Emphasis added.

All figures below are for FY 2003/04, as reported in GHA Annual Report and Accounts 2003/04, online at http://www.freightdesign.co.uk/gha/pdf/GHAcompleteReview0304.pdf. These are the most recent published figures available – we expect figures for FY 2004/05 will not be made available until September 2005. However 2004/05 revenue and expenditure figures are expected to be much the same.

[ix] GHA Annual Reports and Accounts 2003/04, Page 44. £24.637m of those grants was carried over from the previous year, £30.750m was grant money received during the course of FY2003/04. An additional £11m was spent on investment, but almost all of that was from “specific” grants from the Scottish Executive, especially from the Scottish Executive’s “Warm Deal” scheme.

[x] GHA Annual Reports and Accounts 2003/04, Page 38. We have heard that a token amount of loan money has been drawn down in financial year FY2004/05, but have been unable to confirm this in the absence of published accounts for that financial year.

[xi] GHA Annual Reports and Accounts 2003/04, Page 33

[xii] GHA Annual Reports and Accounts 2003/04, Page 23, final sentence of first paragraph.

[xiii] GHA Annual Reports and Accounts 2003/04, Page 24, first sentence.

[xiv] GHA Annual Reports and Accounts 2003/04. Staffing and running costs from Page 33. Income (turnover) from Page 26 – turnover of £218.060m in first table, Consolidated Income and Expenditure Account, i.e. figures including wholly owned subsidiary GHA Management Limited.

[xv] Scottish Executive News Release, March 2003, online at http://www.scotland.gov.uk/News/Releases/2003/03/3241

[xvi] Council Leader Backs GHA Plan in The Key newsletter, Issue 23, February 2002, online at http://www.gha.org.uk/key23/2_councilleaders.htm

[xvii] Written Answers to Scottish Parliament, S1W-23900 and S1W-23901, 28 March 2002, online at http://www.scottish.parliament.uk/business/pqa/wa-02/wa0328.htm

[xviii] Scottish Executive News Release, 11 March 2002, online at https://www.scotland.gov.uk/pages/news/2002/03/SE5493.aspx and repeated in GHA Press Release, 12 March 2002, online at http://www.gha.org.uk/gha/html/news12-03-2002.htm

[xix] Scottish Executive News Release, 12 February 2002, online at http://www.scotland.gov.uk/News/Releases/2002/02/1090

[xx] Your vote for a better future in The Key newsletter, issue 24, March 2002, online at http://www.gha.org.uk/key24/7_yourvoteforabetterfuture.htm

[xxi] Scottish Executive News Release, 2 November 2001, online at http://www.scotland.gov.uk/News/Releases/2001/11/512

[xxii] What will GHA do for my house? in The Key newsletter, Issue 24, Glasgow Housing Association, March 2002, online at http://www.gha.org.uk/key24/3_whattransferwillmean.htm