Tuesday, August 06, 2013

436,000 reasons why we need employee reps on Housing Association Boards

Last Friday Inside Housing magazine disclosed that the former CEO of the so called "not for profit" Housing Association "Places for People" received a total pay off of £436,000 when he recently retired (voluntary).

Because of this the Housing Regulator has downgraded the Association due to "governance concerns" and 3 board members have resigned.

Frankly, this response is grossly inadequate and appears to be mere hand wringing. This is not just an isolated cock up but indicative of a wider malaise. The impression given is that some large Housing Associations are run by some unaccountable, self perpetuating mates club. Solely concerned with enriching themselves from their residents, clients and of course, the public purse.

So what can be done to reverse this? There are vague calls for "restraint" but come on - do turkey's votes for Christmas? Will Hutton in his 2011 report on Fair Pay recommended there should be employee reps on public sector boards especially the remuneration committees (who decide pay). Such organisations should also publish the multiples between the lowest paid and the highest paid. Personally I believe we also need far more independent resident and client reps on all boards.

I had a quick look at the "Places for Executive Profit" website tonight and noticed an advert for an estate cleaner in Sleaford, Lincolnshire for £6.33 per hour (for a whole one hour per week!). This is  poverty pay and only 2p per hour above the uprated national minimum wage. I work it out that the CEO got pro rota 35 times as much as the cleaner that year. I suspect that office cleaning is outsourced. I wonder how much the worker who cleans the CEO office receives?

Why can't employee reps sit on all Boards? They sit with management on joint safety committees where they take decisions on the lives of workers and residents? They have employee reps on  pension committees where they decide on investing millions of pounds.  So why not on Boards and especially remuneration committees? In other arguably more successful countries than the UK this is just considered the norm? Employee representatives will be a brake on greed and corruption.

Unless Housing Associations clean up their act then I don't think there is a long term future for the sector. There has been a lot of genuine fuss and bother today about 30 staff at 14 foreign aid voluntary organisations being paid more than £100k per year. While I share this concern this is just small beer compared to the huge amounts paid in executive pay in most Housing Associations.
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