Friday, July 31, 2015

How the #LabourLeadership contenders reacted to #CecilTheLion

Some Friday Fun - hat tip General Boles on Twitter. Apologies for formatting.

The Future of Housing Associations & Social Housing

Yesterday we had the news that Genesis, a large Housing Association is to stop building homes for rent following the recent Government budget.

Today, Inside Housing magazine reports that other housing associations are seeking advice on how to deregister as social landlords and become completely private bodies. By doing so they think they can avoid the recent measures.

This is a watershed moment. Not only for housing associations but for all social housing including council stock as well.

The Communities and Local Government Select Committee is looking into the future of Housing Associations and there is a call for written evidence by Friday 28 August 2015. I am sure that UNISON will be sending a submission and I will also be consulting with my branch (Greater London Housing Associations Branch) on making a response.

The key threats are :-

  • 1% cut in rents that Housing Associations can charge for the next 4 years when only last year they were told that they can plan ahead assuming a 1% increase plus inflation for the next 10 years. This could mean that some will go bust since they modelled an increase into their business plans when they took loans and bonds to pay for new build. Good news for Housing benefit and tenants but not if it means they get Rachman & Sons as their new landlord. 
  •  The reduction in rents will also inevitable mean threats to jobs and services. Housing associations have been for many years been providing additional services to residents such as floating support to vulnerable tenants, job training and youth clubs. These will all be at risk. 
  • The proposed maximum benefit cap of £23k per family in London and £20k outside will not only result in more evictions and rent arrears especially for tenants with children. It will also make it harder for landlords to let their empty properties to residents on waiting lists since many will not be able to afford the rent due to the cap. This is crazy.
  • Extending the Right to Buy will also mean some housing associations going to the wall especailly if the government does not fully refund any discount (100k in London). Others will have financial problems with paying off early fixed rate loans (such as LOBOs) and meeting their convenants even if they get the full value of any sale. 
  • Housing associations are at the moment "charities" and many of them have benefited from money or gifts of land in the past and this could cause problems with their status if they sell property in this way.
  •  If local authorities have to sell their stock in order to fund the discount then that will be not only unfair but financially disastrous for them and their tenants. The 3 year settlement on council housing finances has also been ripped up.  
  • It is rumoured that instead the government will take away the remaining subsidy for new investment and use it to fund the discount. This will pretty much end the supply of new homes at sub market rents in expensive areas such as London. 
  • Even if the government does fully refund the cost of Right to Buy (which I doubt) then since new homes costs more to build than exisitng properties there will still be an overall reduction in social homes.
  • The so called "pay to stay" will mean that tenants who earn over £40k in London (and £30k outside) will have to pay "market rates". This will be unworkable unless Housing Associations are given the powers to demand income details from tenants with criminal sanctions, which will of course, go down badly with all tenants. I thought this government was against means testing? 
  • If "pay to stay" does go ahead and means that renters are charged full market rent they will be effectively forced to try and exercise the right to buy in order to stay in their homes. Even if you are on £40k per year salary in London, you will find it difficult to get a mortgage even with a discount. Market rents will be completely unaffordable in parts of the City.
  • I have no doubt that the certain individuals and rogue companies will be looking to making deals with vulnerable tenants into "loans" to enable them to buy their property in order to get hold of the £100k discount.
All in all, the sector is facing a crisis and a threat to its future but we have been here before. Right to Buy for housing associations was defeated in the 1990s following a broadbased campaign against it. The government is vulnerable to pressure on housing. We must campaign against these changes.

Even Tory MPs must understand that if government grant is taken away from building new homes and rents reduced then the current grossly inadeaquate supply of housing will get even worse. The leader of Tory Westminster Council, Phillipa Roe, said it would wipe out "swathes" of social housing and leave it unable to house residents in need.

The issue is not just the future of housing associations or council housing but where will the elderly poor, the disabled, the unemployed and the low paid live in the future? In workhouses, in "barracks for the poor" or in British versions of Les banlieues slums?

Thursday, July 30, 2015

"Bloody dangerous" Newham's proposed pension Special Purpose Vehicle

I posted last week here my concerns about a proposal to Newham Executive about setting up a so called "SPV" for the Councils pension fund.

This would cost at least £500,000 to set up and is in my view very risky and could result in a complete waste of public money.

I am very concerned that there has been no independent scrutiny beforehand of this plan by our own Investment and Accounts Committee.

Professional Pensions picked up on the expense and high risk issue and made a very sensible report here

I then received these comments below by email from - let me say "a leading financial figure" who said :-

"Proposing SPV to reduce pension contributions !!!!!!!!! 

Bloody dangerous. Have they learnt nothing from the City as to how not to do it? SPV-financing mechanisms were a significant part of what caused the financial crisis. 

They know not what they do: feels like they have been sold a pup by some City whizz. And where does this kind of financing arrangement (off balance sheet most likely) end ?"

Wednesday, July 29, 2015

UNISON supports Jeremy Corbyn & Angela Eagle in Leadership elections

"UNISON has decided to nominate Jeremy Corbyn in the Labour Party leadership contest and Yvette Cooper as its second choice at the union’s National Labour Link committee today (Wednesday).

UNISON General Secretary Dave Prentis said:

“Jeremy Corbyn’s message has resonated with public sector workers who have suffered years of pay freezes, redundancies with too many having to work more for less.

“They have been penalised for too long by a government that keeps on taking more and more from them. Their choice shows a clear need for change towards a fairer society where work is fairly rewarded, and where those living and working in poverty supported.

“Today’s decision is a recommendation and our members are of course free to cast their vote as to who they think should lead the Labour Party.”

Notes to editors

UNISON represents 1.3 million workers in the UK.
430,000 have actively opted-in to the union’s political fund.
In the region of 28,000 UNISON members are members of the Labour Party in their own right. And around 15,000 are registered to vote in the leadership contest.

The union’s National Labour Link Committee has 23 elected members from across the UK. The decision was taken following a thorough consultation with all the regions".

(UNISON also said it would nominate Angela Eagle in the deputy leader contest, with Stella Creasy as its second choice).

Check out report from BBC. 

Tuesday, July 28, 2015

"LOBOs and the confessions of an ex-auditor"

Check out this article in the local government finance online site "Room 151". Former auditor, Stephen Sheen, looks critically at the decision making process that resulted in Councils taking out LOBOs (Lender Option; Borrower Option) in the first place.

He thinks that the arguments that LOBOs were better than PWLB (the government Public Works Lending Board) are "somewhat disingenuous". The big numbers thrown by critics do not "illuminate the evils inherent in LOBOs"  To be fair he seems to be not a great fan of any long term fixed rate loans.

He "fesses" up that as an auditor at the time there was little thought about whether "LOBOs had unlawfully sneaked Bermudan swaptions" back into Local Government finance (after I assume the Hammersmith & Fulham debacle).

The suspicion is that LOBOs appeared attractive since loans could be rolled over and spread for unprecedented time periods.  Also the initial "teaser" interest rates (some 0%) provided short term financial relief.

His final thoughts were that this is still relevant since "it is still the episode from my twenty-year audit career that I remember with most concern about the enduring question of the acceptance of advice without due critical reflection". So I think he means if it happened once, it could happen again.

This is the only commentory I have read in mainstream council media that "suggests" LOBOs were a bad deal for local authorities. Unlike the Housing Association world where it is widely accepted that LOBOs were a disaster, in Local Government, we still have our heads buried in the sands.

If you are in a hole, the first thing to so is to stop digging and get yourself out of the hole. Councils holding large amounts of LOBOs should accept that they have been mis-sold unlawful loans and then combine together (with housing associations) to sue the Banks and the advisers.

Otherwise we face spending billions of pounds that we haven't got on profits for the Banks paid for by further slashing and burning public services.

Can we start this by having some more confessions please. 

If you don't have a clue what I am talking about (not an uncommon occurrence) check this article

Hat tip Mr Meech.

Monday, July 27, 2015

West Ham Votes for Jeremy Corbyn and Tom Watson

A little late but last Thursday West Ham CLP narrowly nominated, Jeremy Corbyn, as Labour leader ahead of Liz Kendall, Andy Burnham and Yvette Cooper. Tom Watson, was nominated as Deputy leader beating Caroline Flint, Stella Creasy, Angela Eagle and Ben Bradshaw. Local boy Unmesh Desai was also comfortably nominated as the City & East GLA candidate ahead of Murad Qureshi, Howard Dawber, Abdal Ullah, Ashton McGregor & Feryal Demirci.

It was one of the largest West Ham meetings (122 members) I have attended and took place in the Vicarage Lane Community centre in my ward. All members were invited to give speeches and make nominations. I think probably a fifth of those present spoke including young and new members. The speeches were often quite passionate and waiting for the results was tense and rather exciting.  Everyone behaved themselves (even Red Tel) and  I think we did our CLP proud.

As a Party member I nominated Andy Burnham for leader and spoke in favour of Stella Creasy for Deputy. As a UNISON delegate I nominated Murad Qureshi for the GLA seat who has the support of Greater London UNISON.

Afterwards there was food and the traditional Labour Party raffle. When everything was cleared up a few die-hards went down to the Black Lion to further analyse in detail the results and debate the merits (or otherwise) of candidates.

Sunday, July 26, 2015

Beware of Shapeshifters & Outsourcery: Protecting public services and the public purse - APSE seminar

Last weekend I went to a well attended seminar for London Labour Party Councillors at the UNISON Centre in Euston Road presented by Mo Bains from APSE (Association for Public Sector Excellence).

It was an eye opener and I would recommend that all progressive Councils and Councillors should also get this alternative view of how to challenge the so called "orthodoxy" regarding cuts and privatisation before they make any final budget decisions. 

Mo reminded us that the provision of public services only came about in the first place due to massive private sector market failure.

There is little or no evidence that "the market knows best" in public services. The "savings" from privatisation of public services are often down to cuts in terms and conditions of low paid staff and more than off set by paying profits to shareholders and increased salaries to senior management. 

It seems that many private companies see the public sector as "easy meat" to rip off and defraud.  

"the National Audit Office study in 2013/2014 explored the £40BN contracts market. Of 60 contracts tested 34 found billing issues".

Public policy is not set in stone but if services are privatised and policy changes then Councils are being penalised and held to ransom if it means contracts have to be altered.

The privatisation (top down "mutalisation") of Council services into small businesses only results into a greater risk to the Council from failure and massive inefficiencies due to fragmented dis-economies of scale. Many so called former local authority "mutuals" have collapsed or staff have been forced into accepting massive pay cuts.

"Outsourcery" of public services is no panacea and can result in greater cost and a reduced service.   This is not political. More services are currently being taken back in house by Conservative Councils. 

Councils should make greater use of their expertise and resources to offer services to other councils and local businesses. They most also be prepared to make evidence based difficult decisions on the provision of services to ensure they remain in house. For example if a council runs a personal social care service 9-5pm but the users want a service in the early morning or evening then the in house service must to be changed to provide this need after full consultation with staff and the unions.

The great thing about APSE is that it is about public sector excellence and not provider interest. I would recommend that Councillors should ask for APSE to present to their Councils before decisions are made in the coming months on budgets following the savage government cuts.  There is an alternative way to protect public services and the public purse.

Saturday, July 25, 2015

Great Newham Run 2015

Off message-ish but last Sunday (19 July) I took part in the first Great Newham Run 10k in the Queen Elizabeth Park. I have also taken part in the Great North Run in Newcastle and the Great South Run in Portsmouth.

For I think the fifth year in a row, I took part in a running (or rather in my case - a jogging very slowly) event in Newham. The weather was warm but there was a very welcome cooling breeze. It seemed well organised apart from huge queues for the portable toilets at the start.

I was in the Green wave which started off just after 10am near the ArcelorMittal Orbit. Running legend and founder of the Great North Run, Brendan Foster, set us off. The route was around the Olympic park and went past all the iconic Olympic 2012 sports stadiums that are still standing - the main stadium, the Aquatics centre and the Velodrome. The park is also a mass of canals and beautiful green spaces.

During the final 300m you are in the Olympic Stadium itself and running along the track to the finish line which is great thrill.

Fellow Newham Councillors James Beckles and Terry Paul also took part (Terry had the previous day also particated in the Great Newham Swim with Cllr Julianne Marriot in Victoria Docks).

The run itself was a great experience. The big downside was that I didn't see very many Newham residents taking part. We were identified on our number bib. Despite being host to the Olympics in 2212, Newham also has the most "inactive" adults in the country. Is this because we have very little organised youth work provision in the Borough?

There was also a distant lack of black runners taking part. Newham and the boroughs that surround the Park are amongst the most ethically diverse in the country.  While I love Queen Elizabeth Park, I often think it has become a middle class playground and local Newham residents for whatever reason are excluded. Something to work upon I think.

Friday, July 24, 2015

"Alternative Financing Proposals for the Newham Pension Fund"

(This sounds pretty teckie and boring but I have serious concerns about this proposal which you can find here and was agreed yesterday at Newham Cabinet. I circulated this email to all Cllrs with a copy of my submission to the overview and scrunity committee meeting on "Pensions for Members" Call in).

"Dear Colleagues

I hope to attend at least part of the Cabinet meeting tonight but due to work commitments I cannot be certain. Please see attached document on "Pensions for members" item that I submitted to the Overview & Scrutiny “Call in” yesterday evening.  

I also have concerns about the proposal in item 6 “Alternative Financing Proposals for the Newham Pension Fund”. These concerns are :-

1.       The Government announced in the budget that if the 101 different local authority pension funds do not pool their funds they will be forced to do so by the Government. It would be unwise and a waste of public money to set up an Alternative  Financing proposal if the Government is about to force funds to merge. It may provoke legal action by the Government as well.

2.       When funds are merged we can expect huge cost savings and improvement in return which will be far more that any projected savings from the alternative proposed vehicle (even if it works).

3.       I understand that the proposal will cost £500,000 to set up and it is a significant cost at a time of savage cuts.

4.       I do not understand why this proposal has not been before the Investment and Accounts Committee (and the Pension board) for consultation and initial approval? The committee may decide that the proposal is not suitable for the fund and again, public money will be wasted?

5.       Finally, I understand that such complex alternative vehicles are high risk and eye watering expensive.  After our dreadful experience with LOBO loans we should be extra careful not in invest in such complex products without the highest level of scrutiny.

         I therefore hope that the Mayor will withdraw this proposal and send it for consideration by Investment and Accounts Committee (and Pension Board)


John Gray (Councillor)

(All Newham Cllrs have been asked to suggest ways to save money and cut costs. I will be publishing posts such as this on possible savings that can be achieved without harm to residents. So far this amounts to £1.1 million. £500k for not going ahead with this alternative proposal and £600k for not giving some Cllrs pensions).

Update: Professional Pensions (and a leading financial figure) have taken up this issue. See here

Thursday, July 23, 2015

UNISON Selection of Labour's Leader and Deputy Leader Candidates

This survey below has gone out to all UNISON members in Greater London region who pay a voluntary affiliation levy to the Labour Party.  We did a similar survey for the London Mayoral candidate and got an excellent response.

I hope to be able to attend the UNISON National Labour Link leadership nomination meeting as a re-elected NEC Member (NEC will elect the same day - fingers crossed). It will be good to get the views of London on who we should nominate. I will also consult with my branch and Community Service Group colleagues. 


 Dear UNISON Member,

Selection of Labour's Leader and Deputy Leader Candidates - UNISON Members Canvassing Survey

Following the recent General Election and the resignation of Ed Miliband the process is now underway to elect a new Leader and Deputy Leader of the Labour Party.  UNISON is eligible to make a nomination and is seeking your views so these can be considered by the National Labour Link Committee when they meet next week.  All members are encouraged to participate and have their say. 

We would be grateful if you could take a few minutes to answer a very quick survey (there are only 3 questions and it should take just a moment). Just click here to start: (Survey Monkey link on email only).    The survey will close on 12 noon on Tuesday 28 July.

The four candidates standing for Labour Leader are Andy Burham, Yvette Cooper, Jeremy Corby and Liz Kendall.  In accordance with the agreed process UNISON London Region encourages you to support candidates who have shown a commitment to UNISON values by joining our union.  These are:

"         BURNHAM, Andy
"         COOPER, Yvette
"         CORBYN, Jeremy 

The five candidates standing for Deputy Labour Leader are Ben Bradshaw, Stella Creasy, Angela Eagle, Caroline Flint and Tom Watson.  In accordance with the agreed process UNISON London Region encourages you to support candidates who have shown a commitment to UNISON values by joining our union.  This is:

"         EAGLE Angela 

To view opening and closing statements from the candidates at a hustings event at UNISON's National Labour Link Forum please go to

The responses of the survey will be forwarded to the National Labour Link Committee who will make the nomination.