Proposals for Action on Glasgow Housing

Scottish Monitoring Group on Housing and Homelessness

Proposals for Action on Glasgow Housing

August 2007

Glasgow’s stock transfer of 2002 was sold to tenants on the basis of two promises:

· Tenant empowerment, and

· Community ownership.

Neither of those has been delivered.

It is now time to take action on Glasgow Housing.

Our proposals are:

1) GHA Direction and Governance

We believe that a temporary team of housing professionals should be appointed to the board of Glasgow Housing Association.

Communities Scotland has taken this action in the past for other housing associations in difficulty. The need for an immediate change in direction for Glasgow Housing Association is much greater than in those cases where action was taken.

The newly appointed Chief Executive of Glasgow Housing Association, along with the more active members of its current board, seem determined to continue along the same route in defiance of both the previous and the new Scottish Executive, until such time as they are brought under control. Delaying that moment merely worsens the scale of the problem.

2) Democratise the board of Glasgow Housing Association

Longer term the board of GHA should be made democratic, with fresh elections for tenant representative open to all tenants.

The GHA is presently controlled by its 15 strong Board of Management, comprising:

· Six tenant members, elected by all tenants from a list of pre-selected candidates;

· Four ‘independent’ members, appointed or co-opted by the GHA board;

· Four councillors nominated by Glasgow City Council – but note that those are currently unable to take up their places, leaving only the other eleven board members active;

· The GHA Chief Executive.

The Glasgow City Councillors – two Labour and two SNP – are currently unable to take up their seats on the board due to the now very restrictive code of conduct required by the GHA. Glasgow City Council believes this could prevent the councillors fulfilling their duties to constituents and potentially place them in breach of their own code of conduct enforced by the Standards Commission for Scotland.

The GHA board has been dominated throughout its existence by two if its independent appointed members, who have occupied the position of vice chairperson (chairperson is reserved for tenant members) of the main board and chaired some of the more important sub-committees. Initially the former Labour MP Maria Fyfe was the dominant member. Following her retirement, former investment banker Fred Sheddon has dominated GHA decision making. The particularly crucial board sub-committee in charge of recruitment and remuneration of the new GHA Chief Executive is headed by Fred Sheddon, another long standing Labour Party member. Both of these appointments were quasi-political appointments and there is no reason why the new government should want to have the same individuals continue in post.

The six tenant members of the GHA board are elected by postal ballot of all tenants conducted by the Electoral Reform Society. However it is not open to ordinary tenants to stand for election. To be accepted as a candidate you must be accepted and proposed by a local housing organisation committee, and must already be a member of an LHO committee. Initially (that has fortunately proved unsustainable in the long run), LHO committees were themselves unelected, and it was from that time that GHA board candidates emerged.

On just one occasion election to the GHA board was made democratic. Two of the three candidates elected on that occasion (Colin Deans and Billy McAllister, who have since then both become SNP Councillors) were removed from the board after just seven months and have not since been permitted to stand for election. Since then, GHA tenant board members have been the product of “ayatollah elections” (due to the similarity to the 2004 Iranian elections where a severely restricted list of candidates were permitted by the religious authorities). Often the election was uncontested with only one tenant candidate allowed in that electoral area.

A major function of boards of management is to provide oversight to the chief executive. For that reason, chief executives of other housing associations in Scotland are not members of their board of management. That was initially the case with GHA, but in 204 the structure was changed to include Chief Executive as a full member of the Board of Management. We believe this was improper and should now be reversed.

A further problem is that board members are bound by a code of conduct which prevents free speech – tenant representative board members are forbidden from representing individual tenants, or specific groups of tenants, for example. And councillors would be prevented from debating GHA practice in council chamber or committee rooms were they to take their places as board members. That is not acceptable in a modern country.

So we are suggesting that the Board be changed by:

· Replacing the four independent appointed members with new appointments from the Minister through Communities Scotland.

· Removing the Chief Executive from the board

· Conducting fresh elections for all six tenant members of the board. The existing tenant members would be eligible to stand for re-election, but the elections would also be open to all other GHA tenants without restriction.

3) Review GHA’s Refurbishment Program

We believe that GHA’s refurbishment programme should be the subject of a review which would:

1. Identify any wasteful, cosmetic, or superfluous proposed spend of funds;

2. Prioritise the most needed investments, on the basis of tenant need;

3. Aim to free funds for a new build programme.

Quote:

One of the burning questions in my mind is whether we are getting value for the huge sums of taxpayers' money that is being ploughed into housing provision. The increasing cost of subsidy per house that I mentioned a moment ago suggests that we are not. We must get more housing for the public money we spend.

Stewart Maxwell MSP, Scottish Parliament Housing Debate, 21st June 2007.

Complete new roughcasting of external walls, whether they need it or not, is an easy way to plough huge sums of taxpayers (and homeowners) money into housing provision. But it does not represent value for money. Neither does laying complete new roofs and gutters on houses when they do not need anything more than a clean. There is no reason for this waste other than to show that the money has been consumed. Yet such is commonplace, routine, for Glasgow houses.

We believe this has to be reviewed. The refurbishment cost for each unit could pay for up to a third of the cost of a brand new front door social rented house. That would often be a more useful use of public funds. Front door social rented houses are in desperately high demand.

It is not only taxpayers money is being wasted: homeowners are being forced to pay for work they do not want done, and which is often not essential.

Case Study:

In Cardonald in 2006, tenement flats had a new roof fitted. But the roof it replaced was just twelve years old – the previous landlord, Glasgow City Council Housing Services, had replaced the original roof in 1994. Roofs can be expected to have a lifespan of up to 70 years depending on circumstances. Even when this was brought to the attention of the GHA they proceeded with the work regardless. The new roof tiles were a brighter colour of red than the old one, so there was some minor cosmetic improvement from the work. But this represents a enormous waste of rentpayers money, taxpayers money, and owner-occupiers money.

4) Fair Deal for Owners, Fair Deal for Tenants

· Allow more than one year for owner occupiers to pay their refurbishment costs

· Demonstrate repairs and refurbishment are required with structural report or surveyors reports.

· Competitive tendering.

· Have open accountability that charges to owners are equitable and fair.

We believe there is no reason in law for GHA to require repayment within one year. Because the GHA’s constitution says that it exists in order to provide housing for necessitous people in Glasgow, it may provide assistance to necessitous homeowners.

Many of the affected homeowners are, despite owning their homes, pensioners with very low income. Others are young families with relatively low wages and high mortgages and other existing forms of debts. We are not calling for any undue or unfair assistance to homeowners – merely that reasonable repayment schedules be adopted.

The GHA, recently joined by a Communities Scotland spokesperson [Gerry Braiden, Glasgow Herald, 31st May 2007], claim charity regulations restrict repayment to one year. But that is not believed to be the case by most all people outside those two organisations. Mike Dailly, principal solicitor at Govan Law Centre says that is not correct: that because the GHA’s constitution says they exist for housing for “necessitous people in Glasgow”, they could cater for owner occupiers also, if they wanted to.

Direction from the minister or cabinet secretary to GHA could be needed here. Legal advice could be sought if there is genuine doubt to the effect of charity regulations.

The suffering being inflicted upon homeowners by this policy is unacceptable.

Case Study:

In September 2006 GHA invoiced one owner occupier in North Glasgow for their share of refurbishment costs, with the standard demand for payment within one year. By June 2007, the owner had not yet managed to pay and had contacted their MSP for assistance. Following their intervention, the GHA agreed to extend the re-payment period to one year from that date, to July 2008. Inconsistent application of repayment timescale rules undermines belief in the necessity of those rules.

5) Build New Homes

GHA’s business plan includes construction of 3,000 new social rented houses. So far only 200 are in the process of being delivered. The new CEO, Taroub Zahran has stated that GHA may not build any further hoses until they determine what kind of organisation they will be.

We believe that the current mass demolition, clearance, and expensive private housing development programme should be halted. Substantial new housing should be funded and built – but when built on land provided by housing association or local authority then it should be:

· For social rent (mostly);

· And the remainder low cost shared equity ownership, perhaps through community land trust vehicles as in 2007 Scottish Liberal Democrat manifesto – to help alleviate unaffordable house price rises.

Most of the new social rented units should be front door entry houses, not common entry flats.

Monies could be diverted to this from the lower priority elements of GHA’s expensive refurbishment program.

Shelter are calling, quite reasonably, for 30,000 new social rented homes to be built across Scotland. Housing Association waiting lists in Glasgow tend to be closed off now, such is the demand for good quality affordable housing. GHA funds and land could play a massive part in new housing construction - providing both are not wasted on a shocking scale as now, and as will continue to be the case without intervention.

We believe that the majority of new social rented homes should be front door entry and of reasonable quality and low density. That is what tenants and residents want. We should not erect any more low-lifespan flats. If that means getting fewer units built for the money, so be it. Cheap future slum housing is of no long term use to society, and should be a matter for the private sector to provide, where it is provided at all. Taxpayers money should be restricted to encouraging quality desirable housing only.

6) Audit Scotland

Audit Scotland is prepared to audit the GHA – but can only do so if requested to by Ministers. The previous government declined to make that request. But with over £1 billion of finance at its disposal, and after many controversial financial decisions and questionable performance, we believe the time is now right for GHA to receive an audit from Audit Scotland.

We believe the Scottish Executive should require Audit Scotland to investigate the financial competency, efficiency, and procedures of Glasgow Housing Association.

7) Curtail Management Overhead

GHA has the highest management/staff/admin costs of any housing association in Scotland. Efficiency savings of 5% and 6% per year have been promised, but management overhead costs continue to rise year on year.

8) Greater Draw Down Money

GHA has drawn down only a small proportion of the funds made available by lenders. Its refurbishment program has instead been funded mainly from rental and factoring income and Scottish Executive grants. That is in contrast to the original business plan and promises made before stock transfer.

We believe a larger proportion of this money should be used, provided there is first a review of the refurbishment and investment program. These funds would allow a substantial new build program to be undertaken.

9) Communities Scotland

Inadequate and improper monitoring and regulation from Communities Scotland has exacerbated the problems described here.

Communities Scotland has tended to be to close to the GHA to fulfil its responsibilities properly. The present Chief Executive of Communities Scotland, Angiolina Foster, was for twelve months during 2002-03 seconded from Communities Scotland to be acting Chief Executive of GHA. She became acting Chief Executive, and shortly after Chief Executive, of Communities Scotland almost immediately after the end of that secondment to GHA. Communities Scotland in general were closely involved in the creation of the GHA and we believe this makes this interferes with the required neutral disinterested monitoring and regulation.

The new government was elected with a manifesto commitment to replace, or fundamentally alter, Communities Scotland. We believe housing in Glasgow would benefit if that were done sooner rather than later.

Quote:

“We will transfer the functions of Communities Scotland that can be appropriately delivered locally to local authorities, while retaining a national regulatory and monitoring framework for Registered Social Landlords.”

[SNP Manifesto, 2007, http://www.snp.org/policies/health-wellbeing]

10) Jobs and Training

Before stock transfer, the GHA investment program was advertised as a source of thousands of new jobs, helping Glaswegians, especially young Glaswegians, into work. Large numbers of qualified tradesman would be trained up through apprenticeships arising from the investment. These would be in high demand trades: joiners, plumbers, electricians, and so on, which would be beneficial for the Scottish economy as a whole and for the individuals who were trained up and qualified.

Instead GHA has employed private building firms as contractors and sub contractors who, while not necessarily particularly cheap in their cost to the GHA, have employed the cheapest possible workforce and reduced their costs to the minimum.

Not only have apprentices not been taken on and trained through this, the firms involved have employed very few qualified tradesmen. Most of the work has been done by completely unqualified labourers, with only loose inspection and supervision from a very few qualified tradesmen. Even the electrical rewiring has often been done by workers who are not electricians. GHA kitchens are not fitted by joiners.

Inadequate inspection by GHA has allowed private contractors to cut costs in this way. GHA inspection is done by ordinary neighbourhood housing officers – who are themselves not qualified to inspect the standard of building work.

Large numbers of Polish workers, also not qualified tradesmen, have been used for the refurbishment work – including of houses inhabited by young unemployed Glaswegians, unable to secure a rare training or apprenticeship place for themselves.

The City Building (Glasgow) quango continues its long standing successful program of apprentice recruitment, some of whom are involved in GHA work, but the much larger private contractor element has ignored training and apprenticeships. An enormous opportunity to re-vitalise the West of Scotland economy has been missed, and we believe steps should be taken to rectify this.

11) Empower GHA’s Local Housing Organisations by devolving decision making to them.

Local Housing Organisations have been set up by GHA and involve a large number of local tenants and some factored owners. They have no significant decision making powers however: local housing officials are all employed by GHA centrally, and investment plans and priorities are also determined by GHA centrally. They are functioning simply as glorified tenants associations and consultative committees.

We believe this represents a missed opportunity to empower tenants and to allow housing priorities to be determined at the local level.

Empowering LHOs is a quicker and easier method than second stage transfer of giving local tenants power. The structures are all already in place and functioning, and LHOs are ready to assume greater responsibility. It can and should be done irrespective of whether the eventual structure adopted for second stage transfer conforms to the LHO structure or not.

We believe the opportunity should be seized to disaggregate decision making to local bodies, by giving them control over administration, funding, and investment priorities. LHOs should be able to draw up a business plan, and the GHA should fund that plan.

Case Study:

Govanhill Housing Association has a record of fixing broken windows promptly and cheaply by simply calling on a local glazier. Govanhill local housing organisation comprises GHA tenants in the Govanhill area and is also a sub-committee of Govanhill Housing Association. However the LHO has no discretion over how windows are repaired or how fast – all such work goes through central GHA procurement, which tends to be slower and less efficient than the local system.

12) Retain Communities

Demolition and clearance has been undertaken on a large scale. That causes existing communities to be scattered into different areas. Established neighbourly relations are broken, extended families are often left isolated from each other, which is especially important for care and support of the elderly, and children are forced to switch to a different school. Many of those affected are vulnerable with social and health problems and find it especially different to re-adjust and form a new community relations. Many of modern Glasgow’s problems were caused or exacerbated by the similar mass clearance program of the 1960’s, and the mistakes of that are being

Better practice is to proceed with demolition and rebuild in an area in stages, demolishing one block of houses at a time, and constructing the replacement houses in the cleared plots as each demolition stage completes. Existing residents are left in the same neighbourhood area as the work progresses, and the existing community is left intact throughout. That method has actually already been used successfully in the many small scale community controlled housing association refurbishment and new build programs in the 1980s and 1990s. We believe it should be the sole method used now – that would however require a commitment to new build social rented housing, instead of its replacement by solely private housing developments.

Another side effect of large scale demolition is the blight a whole area faces when it is marked for demolition and clearance. Because of the critical shortage of social rented housing, especially large family units, delays of several years are likely in re-housing the existing tenants and residents before large scale demolition can proceed. During that time the area as a whole decays, with restrictions on repairs, a growing number of vacant and boarded up houses, and the use of the more empty areas as safe bases for drug dealers and other anti social elements. Ordinary tenants and residents, including young children, have to endure this for pre demolition timescales of up to several years. We believe this is a completely unacceptable way for government in Scotland to treat its citizens.

Case Study:

In Shawbridge, Pollokshaws, GHA plans at July 2007 involve the demolition of 1,200 houses and flats. 900 replacement houses and flats are to be built, but only 280 of those will be for social rent. That means ¾ of the current community residents will be dispersed elsewhere.

13) Add Glasgow Housing Association to schedule 1, Freedom of Information (Scotland) Act 2002

We believe a statutory instrument should be made to add Glasgow Housing Association to schedule 1, Freedom of Information (Scotland) Act 2002.

The previous Executive was prepared to do this, but never got round to introducing the required statutory instrument. The argument in 2002 for excluding registered social landlords was that many were small and would struggle to cope with extra paper work; but that argument never applied to GHA as the largest registered social landlord in Britain. Freedom of Information would mean tenants and residents could find exactly what the GHA is doing with their money.

Scottish Monitoring Group on Housing and Homelessness

c/o Pollokshaws Burgh Hall, 2025 Pollokshaws Road Glasgow G43 1NE

www.monitoringcottishhousing.org.uk Email: info@monitoringscottishhousing.org.uk

August 2007