Letting the government off the hook over removal of housing subsidy

Hat tip Redbrick (shame because Dispatches have a good track record)

"With reporter Antony Barnett driving between sites in a flash open top and very sporty white car, trying to link a number of disconnected stories under the disingenuous title of ‘Getting rich from the housing crisis’, the Dispatches programme on housing associations on Monday had the kind of sensationalist style that gives TV documentaries a bad name. I broadly agree with Carl Brown’s comprehensive analysis of the programmes' deficiencies on Inside Housing - principally that the government was totally let off the hook.

Dispatches' Antony Barnett and his irritating sporty white car. (Pic Channel 4)

Executive pay in housing associations is of course an issue – especially large redundancy pay-outs - but the media obsession with it is a pain and rather hypocritical when you look at how much people in the media get paid (the last CE of Channel 4 – a public corporation – received a package of £1m in his last year, and don’t get me started on BBC executive pay). To reduce the motivation for housing association activities – good and bad – to a single driver – pay – is absurd. It would also make a change for the press or TV to take a wider look at people who get rich from housing – the developers, the financiers, the private providers of temporary accommodation and the rest. There is a lot of leakage from residents’ rents and mortgage payments to very rich people, and housing association chief executive pay is only a small part of it.

The programme has been widely condemned in the sector, but a little defensively. The answer to a simplistic attack that you’re doing a bad job is not to simply assert that you are ‘doing a great job, a really great job’ (to quote Donald Trump). Because there is another side to the coin and there are issues that need to more honestly addressed.

Stripping aside the overly-dramatic style of presentation and the crude and untrue linking theme of people 'getting rich', the actual issues selected by the programme should not be lightly dismissed. For example, the Clarion redevelopment of the Sutton Estate in Chelsea has been widely criticised, not just in this programme, estate ‘regeneration’ schemes in general have often led to a major reduction in social rented homes (although more homes overall) and the non-delivery of promises, and the practice of selling hundreds of formerly social rented homes in high value areas at auction is little short of a disgrace even if it has been encouraged by this government. The contributions from Tom Murtha asking if associations have lost sight of their original ‘mission’ to provide homes for the poorest, and from Karen Buck MP about disinvestment in the high value but also high need communities she represents, asked reasonable questions of the sector.

The programme failed to get to the heart of the debate about housing associations. The removal of subsidy by government – the main culprits - has led many associations, and especially the largest ones, to maximise their surpluses to enable them to grow their development programmes and to provide an element of cross-subsidy to keep rents in new homes below market levels. Some councils have done the same thing. Practice varies of course – some associations refused to do ‘conversions’ (whereby empty social rent homes are converted to much higher 'affordable rents' before re-letting), others have maximised the practice – but the bottom line is that surpluses from existing activities have grown. Some of the new homes are being provided by making bigger surpluses from existing tenants, but with virtually no debate about the pros and cons.

Within the new business model, associations have clearly done very well. They have kept housing production going and have expanded their output. They have reapplied large development profits to produce more homes rather than see the money leak out as dividends as it would with private developers. The issue is whether they could have done more a) to oppose the worst aspects of government policy and b) to maintain a bigger flow of homes for social rent even if that meant fewer homes overall. Not all associations have made the same choices and there has clearly been more than one possible outcome. Although we are used to needs analysis for social lettings, I never see a serious assessment of who benefits from the rising proportion of new homes at market or near-market prices. There should be far more debate about the implications of losing so many of the cheapest homes to feed a development programme that comprises more expensive homes.

We should start from the principle that tenants should not be paying – in rent and reduced services – for the government’s failure to provide funding for additional affordable homes. I talk to a lot of people in the business and for several years it was hard to get anyone senior in a big association to talk about tenant services rather than development. At strategic level, housing management seemed to be reduced to little more than a growing source of cash. It was hard to get anyone to talk about social rent – still the only genuinely affordable tenure for people on low incomes – rather than total output and ‘affordable housing’ - often a cover for producing homes that were not affordable at all.

Grenfell changed the terms of the debate, forcing a greater focus on existing social housing and the deal that social tenants get. Groups like CIH and Shelter are reviewing social housing and concluding that providing homes at lower rents for poorer people is a very important policy. Labour has shown the way forward with its Green Paper, and the government’s own Green Paper is due to be sneaked out before the Parliamentary recess. Whether they will put more grant into new social rented homes is the critical thing to look out for. If they do, the way the sector then responds will tell us much more about the mettle of housing associations than how much their chief executives are paid.

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.