Grand plans but tenants just an afterthought (and worse)

Big is beautiful – and more efficient. That’s the mantra that seems to be driving the housing association world at the moment. Egged on by the Government in the shape of the increasingly desperate Housing Minister Brandon Lewis, we have had some huge merger announcements in the recent past: Genesis and Thames Valley, Circle and Affinity Sutton, and now the biggest of them all with L&Q, Hyde, and East Thames joining forces to form a body with 135,000 homes.

The claims for the benefits of the merger are grand, under the headline ‘Stronger Together‘ (which I’ve seen somewhere else recently). There are planned savings of £50 million a year (through combining back office functions and IT, refinancing and better procurement deals) as well as a target of building 100,000 homes over a decade, making it the fourth biggest housebuilder in the country (the top 3 all being private companies). We do not know how much work has been done to test these estimates; achieving savings on this scale is easy on paper and a lot harder in practice. Small organisations can be as efficient as big ones; reorganisations eat up huge resources (ask the NHS) and frequently lead to managers taking their eyes off the ball. Managerial hubris is common in mergers;  empire buiding which is not soundly based frequently fails.

But if the savings are there to be made, and the new organisation can deliver more homes that the existing three, why did this announcement still make me feel uncomfortable?

First, the organisation does not yet have a name but we do know who the top dogs are to be. The three existing chief executives become the top managers in the new organisation, with David Montague of L&Q taking the CEO role. He’s always struck me as being exceptionally good at the job (more than I say about some other HA CEOs), which gives me more confidence that the claims for the new organisation will be delivered, and he normally has interesting things to say about housing policy. So this isn’t personal. But it makes me scratchy when the top jobs are stitched up before an announcement on the principle of the merger is made.

This applies not only at employee level but also at Board level. The ‘Chair Designate’ is L&Q’s existing chair, Aubrey Adams, a former chief executive of global estate agent Savills and a non-executive director of British Land.  The Deputy will be Mark Sebba, the current chair of Hyde, a former chief executive of a luxury tailors as well as being involved in investment banking.

It all feels nice and cosy, but it also makes it look more like an L&Q takeover.

My second misgiving is about the social purpose of the new organisation. The PR tries to make it feel good. David Montague says: “Our plans will allow us to tackle the housing crisis head on, driving greater efficiency, building more homes, creating beautiful new places and sustainable, independent communities. At the heart of our united mission will be the continued provision of affordable homes for those in need.

Yet the new building programme, with the target of 100,000 over ten years, will comprise 25,000 new homes for first time buyers, 25,000 new homes for (unaffordable) ‘affordable rent’, with the remaining 50,000 new homes for market rent and sale. There is not one word about aiming to build any at all for social rent, and so claims that they intend to help low income families sound just a little hollow. It looks like another step on the road to losing the sector’s social purpose, and it is nothing short of outrageous to claim that ‘Half of these new homes will be for people on lower incomes’. They will not be, and I do hope Sadiq Khan will take them to task when he becomes mayor.

Thirdly, where are the tenants? They scarcely get a mention in the merger announcement although there are some vague promises about consultation on the detail. Yet the strength of the mergees is based on the rents that tenants have paid in the past and these organisations belong to them as much as anyone else.

Tenants do get a mention in an article by the Deputy CEO-designate published on the same day as the merger announcement. It got my hackles up. With so many things that she could have written about, Elaine Bailey, formerly a senior executive at Serco, ‘set out a vision for the new giant organisation’ by saying she would tackle the ‘dependency culture’.

In a piece entitled ‘Knuckle Down’ she says: “We have been responsible and are partly to blame for the dependency culture we have created”. Her particular beef is that tenants do not take enough ‘personal responsibility in respecting their homes and making an effort to help themselves’. This is stereotyping and condescension rolled into one, turning tenants’ most common complaint – the quality of the repairs service they pay for through their rent – on its head. You would think that the new Deputy CEO-designate would emphasise how the merger provides a great opportunity to review and improve services and offer tenants better value for money. By choosing to use Iain Duncan Smith’s favourite phrase, yet another £200K a year boss looks down her nose at people who are struggling to get by. I bet they even keep coal in the bath.

Dependency Culture: By choosing to use Iain Duncan Smith’s favourite phrase, yet another £200K a year boss looks down her nose at people who are struggling to get by. I bet they even keep coal in the bath.

We are left to speculate about the name of the new organisation. LH & Q? Jekyll and Hyde? Perhaps just ‘Big’. Suggestions in the comments box below please!

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8 Responses to Grand plans but tenants just an afterthought (and worse)

  1. Paul Sargent says:

    Hyde took over as our new landlord from L&Q in July 2015. They have not carried out any repairs even though we have asked many times. They have only maintained and cut the grass in our close (Old Farm Close, Haywards Heath) once in one year although we pay service charges. Most of the Flats and Houses have gone up for rent privately at four times the normal rent. We have had the four bedroom house we rent which was valued by Leaders last week and a Surveyor is coming round next week. We fear we may be the next to be told to move out even though we have been here for ten years. We do not claim benefits and we work hard but our income is not enough to privately rent.

  2. Steve Hilditch’s post raises some really important points about this increasing trend for mega-mergers. These mergers themselves , of course, do raise key issues about the social accountability of such huge landlord organisations in which so much historic public money is invested , but who account directly to a regulator whose regulatory interest is only on asset management and financial viability.There is, however, another problem when previously independent associations come together to form large group structures, That is, the increasing tendency of those group structures to be subsequently collapsed down to a single entity. This is particularly important when part of the group contained organisations formed via stock transfer which included promises to tenants that the new transfer organisations would be a locally controlled stock owning organisation.

    In this context I thought you might be interested in seeing a letter on this topic to Inside Housing which they did not publish . Here it is

    Dear IH

    The recently announced decision of the ‘Together’ Group to collapse its group structure raises important issues about the value and enforceability of promises made to tenants. As Independent Tenant Advisors (ITA) in the stock transfers that established Twin Valley Homes and Green Vale Homes, we were well aware that the promise that council homes would be transferred to a stand-alone, stock owning , locally controlled housing association was an important factor in the decision of tenants to vote in favour of those transfers. Those promises were given in good faith by the local councils, and relayed to tenants in good faith by us as ITA’s. The two stage operation of, first, incorporating those associations in to a group structure , and now dissolving that structure entirely, betrays those promises.

    So at what point should we judge that the moral force of a promise given is eclipsed by a pragmatic one (essentially ‘time passes, things change’)? Clearly, looking to the DCLG (in its current and previous incarnations) and the HCA , for a recognition that there are such things as moral questions involved in actions such as these, will be futile. Governments have only ever been interested in managing the mechanics of stock transfer, and bestowing on the HCA a regulatory framework whose focus is on asset management within narrowly defined criteria of economic ‘rationality’. But if we can’t answer that question then the vacuum will be filled by the simplistic nostrums of organisations, such as Defend Council Housing, who are only too willing to say ‘we told you so’.

    As for ‘Together’, it now clearly needs a name that doesn’t suggest a collaborative partnership of independent organisations. How about ‘Monolith’ ?

    Yours sincerely

    Dr Steve Sharples
    PS Consultants

    So to Steve’s question about ‘where are the tenants?’ we can add ‘and do promises made them count for anything ?’

  3. Edward says:

    My experience as an elderly L&Q tenant managing illness is that I am giving to the landlord by spending my own money decorating/improving and so on. When their repairs people come they are often botchers and have to revisit and cause a lot of anxiety before a repair is done properly. That woman talking about “dependency” is out of touch. Many tenants go above and beyond to look after their homes.

    • Ca Darcy says:

      I am so glad to see that I am not the only older disabled person going through L&Qs botched repairs…I have been having repairs , Subsidence, collapsed drains, electrics, gas damp, asbestos repairs for over 5 years, just had 2 years with HOI who were a waste of more of my time, and L&Q rejected their recommendations anyway. They are bullies I am so very ill I can’t even get Environmental Health to help…L&Q answer to NO ONE.

  4. Definitely don’t hold your breath, this woman made me so mad when I read her article yesterday, she forgets who pays her wages, tenants do! But of course she is looking towards the Private sector where she may double her salary and let the “dependent” tenants go hang, The government doesn’t want renters, everyone should hang a mortgage round their necks and worry when interest rates go up. See what dependency is then.

  5. lizziespring says:

    I so resent these fat-bellied creeps and their ego-driven entitlement to sneer at the people who pay their immoral wages. Dependency culture? Their dependence on wringing as much as they can from low paid people, to fill their own feather lined bank accounts, is literally nauseating.
    DEPENDENCY CULTURE? Oh god help me if, rather than being someone who’s worked for 47 years and has never been dependent on anyone, I really was dependent on the incompetent blustering rude shambolic idiots that slither about the social housing sector.
    Oh how heartily I wish they’d all fuck off.
    Good article Steve, but I feel even more angry and disgusted by these vile fools than usual.

  6. colin wiles says:

    Excellent blog Steve.

  7. suelukes says:

    We definitely need a write in campaign for Jekyll and Hyde. And I am glad to see a CEO pledging to tackle the dependency culture since one of the biggest drivers of benefits “dependency” given low wages is high rents and housing associations like Hyde and L&Q are in an ideal position to do something about this. Let’s not hold our breath

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