Monday, August 31, 2015

Friwin Memories - New Ballast Pit Short

Bass Maltings Short from Friwin on Vimeo.

This is an amazing drone video of an historic site. When he is not on his ship off the coast of South America (month on, then month off) he is trying to set up a promotional video company with an old school friend. From close up weddings, naming ceremonies, business launches to ariel drone flyovers. My talented nephew. He obviously takes after his Mum's side of the family :)

Vote against Keith Hellawell as director of Sports Direct

"VOTE AGAINST resolution 4 to re-elect Keith Hellawell as a Director of Sports Direct International PLC at the AGM 9/9/15

We believe that voting against the chair Keith Hellawell is appropriate in order to send a message about our concerns about management and employment practices, and weak corporate governance at Sports Direct, which the chair must take responsibility for.

Trade Union Share Owners (TUSO) is a group of investors representing the financial assets of the labour movement and committed to long-term responsible investment. We collectively have over £1bn in assets under management and our membership includes affiliated unions that represent workers at Sports Direct.

We urge you to VOTE AGAINST resolution 4 to re-elect Keith Hellawell as a Director of Sports Direct at the Annual General Meeting on the 9thSeptember for the following reasons:

The company’s questionable corporate governance and employment practices are long-standing issues that pose potential risks to investors. Yet the current chair has not addressed them despite concerns being raised repeatedly by various stakeholders, further he has been criticized by MPs for his lack of knowledge of important events at subsidiary USC.

Voting against Keith Hellawell would communicate that shareholders concerns can no longer be ignored and that Sports Direct has to change the way they do business if the long term reputation and success of the company are going to be sustained.

MPs have said that the chairman Keith Hellawell of Sports Direct is presiding over a FTSE 100 company run like a “backstreet outfit” where executives made deals behind the board’s back, withheld payments to force suppliers and landlords to the negotiating table and failed to consult with staff over the pre-pack administration of its fashion chain USC.

For many investors and the wider public, Sports Direct is synonymous with the use of zero hours contracts and other controversial management practices. Sports Direct was even the subject of an investigation by Dispatches on Channel Four in April this year.

The risks posed by the use of zero hours contracts and other management practices revealed by Dispatches need to be disclosed to shareholders, and it is clear that investor expectations are growing. A report issued by the National Association of Pension Funds in June recommended that PLCs disclose the breakdown of full-time, part-time and “contingent” workers. The NAPF specifically highlighted the use of zero hours contracts as a potential risk that investors need to assess.

Shareholders are aware that much of Sports Directs workforce is employed on zero hours contracts, yet continue to be left in the dark about the extent of such practices. The chair has acknowledged that this is an issue by referring to casual employment in his statement in the annual report. However the 48 words that chair spends on the topic provides no further information. In the Corporate Social Responsibility section of the annual report there is neither any commentary on zero hours contracts or a breakdown of numbers in each type of employment.

We believe that the workers of any company are their greatest asset and they should be treated accordingly, something that we must ensure Sports Direct follows.

Sunday, August 30, 2015

Dave Prentis - UNISON General Secretary election 2015

Just as the Labour Leadership election is coming to a close there is another important Labour Movement contest for 1.3 million UNISON members. The 5 yearly election of our General Secretary (GS). 

I am supporting Dave Prentis to be re-elected as our GS. Dave is a members' champion and will always put the interests of the union first. Despite the Tory onslaught against public services and unions, UNISON has survived and continues to defend its members through thick and thin. We have even recruited record number of new members and activists.

We need an experienced, pragmatic leader and campaigner to defend members as we face a government determined to take us all back to a 1930s economy. 

Check out Dave's key pledges here

On Wednesday 2 September at 6.30 pm, in the Parcel Yard, Kings Cross station, London there is a fund raiser with Daily Mirror's Kevin Maguire.

Friday, August 28, 2015

Evidence from the UNISON Housing Associations Branch to the Select Committee

"We are a London-based branch of the national trade union UNISON, which organises workers providing public services. 

We organise over 3,000 workers across Greater London who are employed by housing associations and are recognised by most of the G15 housing associations as well as a number of smaller housing organisations. 

We welcome the opportunity to submit evidence to the Communities and Local Government Select Committee and have consulted with our members and activists in order to compile this response.

·                     Last year housing associations were assured that they could plan ahead for the future with a new rent increase model of CPI inflation plus 1% increases per year. Instead they have now been instructed to apply a 1% cut in rent every year for the next 4 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 building. There is an advantage to social tenants in receiving a cut in rents but not if it leads to a net decrease in the social housing stock. 

·                      The reductions in rents will also inevitably 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. 

·                     Housing costs in London are high and decent housing is scarce. The cost of non-socially provided housing in London outside is unsustainable, with private rents averaging £1,500/month, and the average cost of buying a house at around £480,000 (nearly 20 x average wages). Extending the Right to Buy to HA tenants is therefore likely to be extremely popular with London residents; for many this may be their only hope of every buying a property. For some inner London boroughs the number of properties purchased under Right to Buy is over 60%.

Implications of extending Right to Buy to housing associations
·                     Extending Right to Buy will also mean some housing associations going to the wall especially if the government does not fully refund any discount (which will be over £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. 

·                     Many housing associations currently have charitable status and many of them have benefited from money or gifts of land in the past. This could cause problems with their status if they sell property in this way. This is a real threat to the existence of many associations and means that after years of real-terms pay cuts or stagnation our members may find themselves out of work altogether.

·                      If local authorities have to sell their housing 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 has been 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 has not yet been clarified) then since new homes costs more to build than existing properties there will still be an overall reduction in social homes. With high land prices and opportunities for development in inner London low, selling off housing association properties through Right to Buy would mean a net decrease in the numbers of social housing properties across the capital, as properties are sold and not replaced.

Changes to benefits
·                     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.

·                     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. Changes to benefits such as the bedroom tax have already increased the workloads and stress levels of our members, who do a difficult job at the frontline of the government’s austerity regime.

·                     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 – the Islington and Shoreditch Housing Association recently advertised a property in Hackney for sale under a supposedly ‘affordable’ shared ownership scheme for £1,000,000. Market rents will be completely unaffordable in parts of the city. This will increase social cleansing leaving large parts of London available only to the very rich.

·                     Inside Housing recently showed that around 40% of council houses sold under Right to Buy are currently being rented privately. There is no reason why this pattern should not be repeated in the housing association sector, meaning that private landlords will benefit from homes built through public subsidy. Furthermore, many of these properties are occupied by tenants who are claiming housing benefit – a transfer of wealth from the state to private landlords which would be completely unnecessary if these properties were still owned by local authorities.  It is this transfer of housing benefit to private landlords which has led to the Conservative government claiming that the welfare bill is unsustainable and to their cuts to the social security system – a problem that could be solving by relieving the pressure on housing both in London and nationwide.

·                     It is also possible that the certain individuals and rogue companies will be looking to make deals with vulnerable tenants into "loans" to enable them to buy their property in order to get hold of the £100k discount.

Sustainable future
·         The UNISON Housing Associations branch believes that the housing crisis, particularly in London, will not be solved and indeed will be worsened by extending Right to Buy to housing associations. As workers we feel this will remove or dilute the social aspects of our work and lead to increased stress, job losses and the forced closures of many associations. As housing workers and as London residents we do not feel this is the way to solve the housing crisis.

·         We call for a programme of mass house-building in the capital, both for social rent and for private ownership. We also call for greatly increased regulation in the private rented sector to give tenants greater protection and security of tenure, and for rent controls to be reintroduced and rents capped at a “Living Rent” set by an independent commission.

·         We note that Right to Buy for housing associations was defeated in the 1990s following a broad based campaign against it. The UNISON Housing Associations branch will continue to campaign against Right to Buy in housing associations and for a fair and sustainable solution to the housing crisis.

Thursday, August 27, 2015

Murad Qureshi Standing up for City & East

'We need an experienced City and East representative like Murad, who can hit the ground running. With his strong track record of effectively holding the London Mayor to account, he offers all the people of East London a campaigning GLA member who will deliver results from day one of his election.Cllr John Gray (& UNISON)

Many eligible voters have already take part in the election for the Greater London Assembly City & East Labour candidate but there is still another 2 weeks of the ballot to go. There is even a hustings arranged for next week!

"As well as choosing our next Leader, Deputy Leader and Mayoral candidate, as a member in City and East London you will also get the chance to choose who you want to represent you as Labour's candidate for the London Assembly.

Before you vote you can put the candidates to the test in a hustings on Wednesday 2 September from 7pm at Queen Mary University. This is your chance to put your questions to the candidates and hear them make their case for why the want to represent City and East London on the Greater London Assembly".

Wednesday, August 26, 2015

UNISON Champion - June Poole RIP

I was shocked to hear the sad news that UNISON stalwart, June Poole, has passed away after a short illness. We were supposed to meet yesterday at the UNISON centre in London for a Board meeting of the Welfare Trustees.This meeting was cancelled out of respect for her.

My sympathies are with her family and her many UNISON friends and comrades.

June was a real UNISON grassroots "activist", who was not only a longstanding member of her branch, Rochdale Local Government, but took part in numerous regional and national committees as well as campaigning on disability issues, women rights and for Labour Link.

She will be best remembered as a "tireless worker for
 UNISON’s welfare organisation ‘There for You’".
I got to know June when we were both members of UNISON Community Service Group Executive. She became its Vice Chair. Earlier this year we both stood together on the same centre left ticket for the two UNISON Community National Executive Council seats. I managed to get in but June narrowly missed out by only 61 votes.  She would have made an absolutely brilliant NEC member.

June was a no nonsense, feisty, instinctive trade unionist, who stood up for workers and for their interests. While she did not suffer fools, she cared for members and there was no side to her. She did however have an infectious "wicked" sense of humour.

Our Labour movement family has lost one of its own.

UNISON will be letting people know the funeral details as soon as they are available.

(hat tip great picture to UNISON North West Region)

Tuesday, August 25, 2015

Speech to Cabinet on “Alternative Finance Proposal for Newham Pension scheme" (Special Purpose Vehicle)

Below is the full version of the speech I gave this afternoon at the crowded Cabinet meeting at Newham Dockside in support of last night's recommendations by our Overview & Scrutiny Committee.

The recommendation was that we should not spend up to £500k on a SPV for the pension fund without the approval of the Pension committee. This meeting was open to the public and I believe a journalist was present.

“Thank you Mayor. John Gray, Councillor in West Ham ward. I apologise that I have not had time to properly prepare this speech but I support the recommendations of the Overview & Scrutiny Committee for the following reasons.

The first reason for further review is "Risk". This proposal appears to be, on the inadequate information I have been allowed to see so far (despite being a Councillor and member of the Investment and Accounts Committee) to be an expensive and I am advised, dangerous, gamble with residents' and pensioners' money. To be clear there are no, I repeat no budget “savings” to be made from this proposal.

It will only be at best a (welcome) deferral of Council “contributions”, which if the pension fund does well may not be needed. But if the pension fund does not perform well, then it runs the risk of plunging it into an even greater deficit over the next 20 years than the £298 million current shortfall.

The second reason is “Process”. To be clear,I bought up this item in the Pension work plan at the Committee meeting in June and was reassured that this proposal was at a very early stage and nothing would be agreed without the agreement of our committee. There was no mention of a 20 page PowerPoint presentation dated April and no mention of spending up to £500k before the pension committee had agreed to this proposal.

Some background to the issues. Newham Council is obliged by law to allow its employed and (many of its) contracted out staff to join the national local government pension scheme (LGPS). To pay for the cost of pensions, Newham and other Councils have their own local pension funds which they, other employers and staff contribute towards. Thousands of former Newham staff are already dependent upon the scheme for their pension, the majority of whom were low paid.

This money is usually invested in British and worldwide government bonds, company stocks and shares, which are intended to grow in value over the long term and pay for the pensions. The value of the Newham fund is currently around £1 billion, but it has a significant "deficit" (i.e. it is estimated that it has promised to pay out more in pensions than it will get in contributions and from investment growth).

The current deficit is £298 million. The Pension fund has been in deficit for many decades. There have been a series of plans to pay off the deficit over up to 20 year periods which have not worked and the repayment period just keeps getting extended.

It should be noted that Newham has decided to adopt a more "optimistic" valuation of the deficit than many other Councils. Other Councils employ advisors who would value our deficit as being far worse.

There are a number of reasons for the deficit but the chief one is that the Council (as have many other Councils) has consistently failed to accurately predict what are the future costs of the scheme and have therefore failed to put enough money into their funds. This means that Newham is currently paying millions of pounds per year extra to make up for the past shortfall.

The other main reason is that unlike other funded public sector schemes such as the Universities and Railways, the LGPS is split up into 101 different funds which means expensive duplication of advisers and managers and that they are far too small to achieve economies of scale to cut costs and improve performance. Size and scale matters in pensions and the Newham scheme is arguably far too small and therefore inefficient.

Past deficits are the responsibility of Newham Council tax payers while the risk from the cost of future pensions is now the responsibility of staff. If the cost of providing future pensions goes up by more than 13% then Government legislation will mean that staff pensions will have to be reduced and/or their contributions raised.

It is now clear from QC legal advice that there is no “Crown Guarantee” to the LGPS. In the unlikely but not impossible situation in these uncertain times that a Council goes bust, who will pay the pensions of our pensioners?

It is imperative to residents and staff pensioners that the recovery plan to pay off the deficit is not to be put at risk. There must be sufficient funding for the scheme and the Council must not continue to underfund it and therefore making the deficit even worse. The Council needs to invest to save.

Finally, we must make sure that managers and adviser costs are reduced and returns enhanced. Newham pension fund is being ripped off by the financial services industry and this is where we should be making savings.

The proposal itself (based on the limited information available)

·Newham currently pays £35 million per year in employer contributions to the staff pension scheme.

· It pays this because it is advised by pension experts called “actuaries” that it needs to pay this amount of money to meet its future pension promises to staff and make up for its failure to pay enough money into the scheme in the past.

· The proposal argues that Newham does not have to pay so much into the staff pension scheme because the Actuary is being too cautious about investment returns and pensioners life expectancy (being “Prudential”). If he or she was more optimistic about this then it could pay less.

· These change in assumptions could mean that the Council will only have to pay £30 million per year instead of £35 million. Therefore “saving” £5 million per year and £15 million over 3 years. Note this is “revenue” and not “real savings”.

· To “safeguard” the Pension fund it will be given a Council owned asset, such as a property or group of properties (for example only the Morrison’s shopping centre in Stratford) as security against the “Prudential” assumptions being right after all. Rents from the asset would then be paid into the pension fund. It is unclear but in theory the building could also be sold by the pension fund to make up the difference.

· The presentation on the Newham website makes it clear that after 3 years the proposal will have to be revalued and if the assumptions made are wrong, then the Council will have to pay an extra £20 million in contributions to the scheme over the next 20 years to make up for this new shortfall. This is on top of the massive deficit/shortfall they are already funding.

· It is of concern that the Newham Council Executive continually stress that they make prudential decisions regarding Council borrowing over the Olympic stadium and Red Doors but don’t want to make prudential assumptions regarding pension investments.

· On the information so far it seems to at best that this is a clever (but expensive) speculative punt to reduce staff pension contributions over the next few years by gambling that the actuaries were just being overcautious and we didn’t need to put that amount of money aside in any case. However, at worse it will make the scheme far more expensive and the deficit even bigger. This needs further investigation by the pension committee.

I finished by asking that the Mayor agrees to let Newham Pension Committee, whose responsibility it will be is to approve the final proposal to agree that they are indeed minded to scope it out before any public money is spent on it - and possibly wasted if we don't agree to the proposal".

There was some further debate at Cabinet and I understand that the Mayor decided to not follow the recommendations of Overview & Scrutiny and that public money will be spent on the developing the SPV.

I am preparing a series of questions to be submitted to our treasury officers and our actuaries which I will post in next day or two once they are submitted.

Monday, August 24, 2015

South West Ham Independent Labour Party - "Wanted £2000 For New Buildings"

Hat tip Captain Swing who noticed this in an ebay auction. I am not sure who "Treasurer Alderman W. Bell 15 Mafeking Road E16" or what was the "New Building" appeal or why the "Bullfinch"? but suspect he is the former Mayor of West Ham mentioned here

"West Ham Electricity Offices Key

A key presented to Alderman W.T. Bell Mayor of West Ham, With the West Ham coat of arms. On the reverse:- Opening first block of electricity offices Romford Rd West Ham. 24th October, and an engraving of the building. This is in its own fitted box, by Elkinton & Co. Ltd".

I also think he is listed as an Alderman in 1932 here in the "West Ham Annual Report by the Medical Officer" which is well worth a read if pretty shocking. The death rate for illegitimate infants under age of one was 125 out of every 1000. Nowadays for all infants under one in England and Wales it is 3.8 per 1000. Which is dreadful enough but imagine a death rate nearly 100x worse for the most vulnerable in the life time of my father.

If anyone has any further information on this please let me know.

Sunday, August 23, 2015

Newham Overview & Scrunity "Call in" on SPV - 6.30pm Monday 24 August 2015

Tomorrow evening at Committee Room 1, East Ham Town Hall, members of Newham Council Overview & Scrutiny will debate a request from a Cllr that up to £500,000 should not yet be spent on a proposed Special Purpose Vehicle (SPV) for its staff pension fund.

Cllr Farah Nazeer has asked that this proposal should, firstly, get agreement from the Newham Investments & Accounts (I&A) Committee. She quite rightly points out that in a time of public spending cuts the Council should not be committing to this proposal until the I&A have made an informed decision to support further investigation into what is an expensive and potentially risky measure.

As far as I can make out the idea is that Newham will let its pension fund have some sort of control over a council owned asset in exchange for reduced employer contributions to the fund.  I have posted my concerns on this proposal here and here

There has been some interesting coverage in the Pension press. Professional Pensions have covered the story and there was a measured article on the use of such "alternative funding" in the Local Government Pension Scheme (LGPS). However, it points out that they are complex, expensive  and there are "key issues" (see below)

What are the key issues for schemes?
1) Valuation of the underlying properties. Would the administering authority invest in the assets if they were not held under this structure? Funds should also ask for the unoccupied value in addition to the current occupier value. If the employer becomes insolvent, the property will be unoccupied so that value will be relevant.
2) Conflicts of interest. Is the local authority in its capacity as administering authority of the pension fund acting solely in the interests of the pension fund and its members?
3) Ensure the arrangement doesn’t breach any regulatory requirements.

The model being proposed for Newham also seems to be very different than that used in the private sector.

In the private sector if the assumptions behind the SPV fail and go "belly up" then the pension trustees can sell the assets to make up the loss of contributions. With the Newham model this does not appear to happen and instead the Council will start to pay rent and maybe increase its contributions? Which makes me wonder - with regard to 2. above and "conflicts of interests". What is in the interests of the Newham pension fund to allow this to happen? 

Why would the fund agree to a potential minimum of 3 years of under-funding at a time of large pension deficits, massive cuts in government support and no Crown promise if the sponsor (i.e. the Council) goes bust?

Mind you, I have not had access to all the reports since Chief Officers are refusing to let me see them. Despite being an elected Councillor and a member of the Investment & Accounts Committee.

The website for Council Finance Officers "Room 151" also points out here that:-  

"The Pensions Regulator warned in 2013 that the use of such complex structures “can lead to increases in risk where advisers to schemes have not anticipated all the implications of using this structure”.

It added: “It is vital that trustees understand the risks they are taking and consider carefully whether a more complex approach to supporting the scheme, which may involve additional risk taking by the scheme, is preferable to a straightforward one.”. 

Tomorrow's meeting should result in more information coming out about the proposal but so far it seems to me that it is nothing more than a speculative bet that the fund will perform better than our advisers think it will.

The fund is already in deficit because for various reasons it has historically under-estimated how much money it needs. There will have to be extremely good reasons and proper scrutiny for the fund to risk any further mistakes with our staff's pensions.