Saturday, September 20, 2008

“Housing chiefs enjoy bumper pay hikes”

Soon after I posted last month on the 32% pay increase (to £327,000pa) of the Housing Association boss of Anchor Trust, the UNISON office rang to warn me that someone who was “very angry” had rang them and was trying to contact me.

Now professionally and politically, it is not exactly unknown for “angry” people to want to contact me for various reasons. But when I actually spoke to this elderly person after she emailed me via this blog (who I have never met and whose voice was literally shaking with anger as she spoke) her fury was about this pay rise and ‘... how on earth was it allowed to happen...’ A good question.

Yesterday, Inside Housing reports that the average pay rise of Housing Association Chiefs 2007/2008 was an inflation busting 7.3%. While the top 10 highest paid enjoyed an average 15% increase. Number one of course was John Belcher, chief executive of said Anchor Trust.

Now, I will try and be objective over this news. I will say from the onset that I personally have no objection to hard working, talented, successful people earning significant financial rewards from leading large, complex and, of course, flourishing organisations.

There is of course the inevitable “but”. My “but” is that these salaries should also be reasonable in all the circumstances and not excessive. While one part of me might just simply despair at the numbers, I think also that there are sound, reasoned and persuasive arguments that paying senior management such huge amounts of money is also wrong for good business reasons.

I simply do not believe that you can have a successful organisation with a positive and inclusive company culture, where the senior management are paid vastly more than the mass of employees. Surely there is no justification for paying say more than 10 times the salary of the lowest paid? I include contracted out workers such as cleaners and security staff in this calculation. I suspect that Anchor Trust have such staff on minimum wage. That means that John Belcher earns over 28 times the earnings of such employees (£327,000 divided by £11,481). This just encourages a “them” and “us” attitude.

What is potentially even more destructive to the morale of housing association staff is if their wages are increased by less than inflation while their senior executives enjoy above inflation large pay rises. In many Supporting People contracts staff are being offered no pay rise, skill levels are being reduced and working hours increased for no extra pay. UNISON national housing officer Mike Short argues that this may be discriminative since many of these already low paid workers are female.

Never mind what hard pressed residents think of their Chief Executive’s salary as they struggle to pay their rent or service charges.

Such pay rises are also extremely damaging to the social housing movement as a whole. There have been a number of very negative comments about housing associations made recently by MPs. I have myself met a number of MPs, Assembly members and senior local councillors who despair of housing associations. They are not the “usual suspects”.

Housing associations enjoy large public subsidies in development aid and many residents receive housing benefit to help pay their rent. This is huge amounts of public money that we are talking about. How do we ensure that the salaries paid to senior staff have been properly arrived at and accounted for?

Following the governance failures that led to the demise of Ujima Housing Association, how confident are we that boards are able to challenge excessive pay?

Ironically, while there are justifiable complaints about the level of executive pay in the private sector, at least (in theory anyway) all shareholders have a vote at the company AGM on executive pay. However imperfect this mechanism is it means that the private sector is more accountable than the public sector in this field.

The regulator seems toothless over this issue and more concerned with justifying their own large pay rises.

Clearly the “market” has failed the housing association movement over pay. Bearing in mind recent economic events where we find a ring wing US Republican government nationalising banks, we should now all know beyond doubt that it is right for the state to intervene when the “market” fails in such ways. Better still; intervene now before things get worse.

Last year at the UNISON Housing fringe at the Labour Party conference I questioned the then Housing minister, Yvette Cooper, about excessive pay for association chiefs. She said that she would consider sending a message on this issue. Since it now seems that many executives now get more than twice as much as Local Government & Communities boss Hazel Blears (£138k per year), it appears that the message has been lost in the post?

I expect this year at the conference this issue will not go away. Now is time to act and intervene?

(BTW what did Boston Mayflower have to hide, since they were the only HA to refuse to take part in the Inside Housing Survey?)


Anonymous said...

Yes, well, in your neck of the woods perhaps this sort of thing has everything to do with greedy little opportunist Thatcherite spivs in the Labour groups that are obsessed with attaining place in the Cabinet of the London Borough of X and no conception at all of helping the people they were elected to serve.

And of course the careerist spivs in the council who think they're serving socialism by bottom-licking said Cabinet members, even it does mean obscene bonuses and ALMOs.

I expect you'll blame it all on the Tories though - Boris is a sitting target for the blame.

Anonymous said...

Well nothing New in Labours grab as much as you can world.

Anonymous said...

Blimey does Hazel Blears, that old bag that was left in charge when Charles Clarke was on holiday, really get 138K ..what a complete waste of money. Personally I would'nt be arsed to to turn up to hear her speaking even if the beer afterwards was free.

John Gray said...

Sorry all not replying sooner

Hi Anon 1
Nah, there are a few “bad apple” Labour Councillors but the vast majority of them are decent people doing a difficult job well most of the time. But you are partly right – Boris is to blame!

Hi Robert - bye Robert

Hi Anon 2
Hope you don’t mind me saying that it is a bit sad you making these remarks "anon" – I bet you would not say such things to her face –

she would have your guts for garters!

Anonymous said...

Frankly i'd rather spend a saturday night at a bus stop in the pouring rain than be bothered to give Blears the time of day...what a Cabinet of total deadbeats. What amazes me is that you can even be bothered to give their views any air time at all? Sheep have more energy and sense of direction than this lot...but since you are from sheep shagging land you probably find them agreable.

John Gray said...

Come on Anon – admit it, you are scared of real debate, that why you don’t comment in your own name! (or are you that “b**** little S*** from St. Albans – quote unquote)

We should be told

Anonymous said...

Harpenden not St.Albans

John Gray said...

Belgian Bloody Blackadder