FAQs on the merger between NHH and Genesis HA.

Please don’t forget the meeting!

MEETING FOR ALL RESIDENTS OF NOTTING HILL HOUSING AND GENESIS HA. 

WEDS 16 AUGUST 2017 

6:30-8:30PM 

Westbourne Grove Church,

Westbourne Grove, London, W11 2RW

The venue has wheelchair access

What you are not being told about the merger.  

Frequently asked questions

———————-

Why are these housing associations merging?

So that the merged H.A can borrow more money on the private money markets to build homes which are out-of-reach for ordinary people. Both housing associations have lost sight of their original purpose.

In 2016 the National Housing Federation, the HA bosses association, said (1) that rental income is central for ,raising private debt in order to build more homes. Service charges and ‘management charges’ on maintenance work for leaseholders and shared owners also increase income and allow HAs to raise more private debt.

Increasing income (from rents, service charges and management charges on repairs) and a bigger asset base (our homes) means more loans for out-of-reach housing. It has very little do with protecting homes or ending the housing crisis.

In 2016 Genesis funded a report (2) by a ‘think tank’ set up by extremist conservative MPs which called for the government to give H.As a ‘deal’ – to build more out-of-reach homes based on increasing H.A debt to 60% debt and forcing up rents.  Part of the deal was also that the H.As could sell their existing housing. Although lip service was paid to ‘rent caps’, HAs would be able charge whatever rent they wanted:

“Government would give the housing associations signing up complete discretion over the use of the social housing grant from housing asset sales and allow the housing associations to set their own rents for its social housing tenants.”

Neither HA has been honest with residents about the real reasons for the merger – or the likely consequences.

What will this mean for our rents and service charges?

We are concerned that there is a long term agenda to raise rents or get tenants out, to sell properties on.

What is happening is shown by Genesis’ attitude to older ‘secure tenants’. The rents for these pre-1989 tenancies are currently uncapped. Despite the fact that all 2,000 of them are retired, or nearing retirement, usually on fixed savings or pensions, Genesis has been raising their rents by up to 177%.

As Kate Davies said (3) in 2008, “housing associations should be free to use new social housing, and existing social housing…as they see fit(our emphasis). The new Housing and Planning Act 2016 allows H.A.s to end much of the protection for residents including their rents ( a process sometimes called ‘deregulation’).

In other words the terms of tenancies, including rent, are under attack. Service and other charges may also go up with the pressure to fund more building. Neil Hadden said in an interview (4) in 2015 that Genesis was:

“really looking at our asset base and seeing what the value of that is and how we can get our hands on that value, by changing its tenure, by churning it, by selling it and using those proceeds to build more homes.” 

So there appears to be a serious conflict of interest between the interests of current residents and the drive to increase the income of Genesis and Notting Hill’s (and therefore the new merged HA) by any means.

But shouldn’t H.A residents be supporting the construction of more new homes? 

We would support them if they were building good quality, secure, low rent homes at about £100-£125 per week – which is what is needed in the South East of the UK as part of the solution to the housing crisis.

But Genesis is building mostly expensive homes to sell (at up to £1 million) or rent at market/so called ‘affordable’  rents (costing up to £2,750 per month). Notting Hill is doing the same.

With these policies, the new merged HA will deepen the housing crisis, not help to solve it.

But these new homes are ‘affordable,’ aren’t they?

We will be told how the new organisation is going to build ‘affordable homes’. But the truth recently came out from an unlikely source – a senior executive in Genesis explaining why Genesis was building out-of-reach homes (5):

“Many people may argue… that 80% of market rent in London is not affordable at all. It is a view most people would sympathise with. But while that may be so, it is not the view of the Government, who have decided that 80% is affordable.”

So rather than fight for decent government policies by refusing to get involved in the ‘affordable’ swindle,  the executives of both organisations are falling over themselves to provide out-of-reach homes by using existing (publicly funded) homes and ever- increasing rents, and charges.

The two HAs then try to con residents and the general public by talking about constructing ‘affordable homes’ which they know are out-of-reach.

Is the ‘core purpose’ of Genesis and NHH being faithfully carried out?

The publicity states: “the core purpose remains unchanged: to provide quality homes to low income households across London and beyond.”

This is quite simply untrue. Neil Hadden, the current CEO of Genesis is on record (6) as saying in 2015 that people without money simply ‘won’t be my problem’.

And he noted in the same interview (7) that:

“We really think that the [social housing] element has gone and therefore we should be looking more at a 50/50 split between intermediate tenures, such as shared ownership and market rent / outright sale.”

Notting Hill’s Kate Davies has been publicly criticised by Steve Hilditch, who used to be head of policy at Shleter and is a former member of the Notting Hill Housing board. He said in 2017 (8) that:

“[Kate Davies] has led an organisation which deliberately decided not to provide as many social rented homes as it could have done …Secondly, she was a leading light in the campaigns and lobbying that seriously challenged the existence of social housing.”

Although some might find this criticism harsh, we do not think it is unreasonable to say that both organisations and their current CEOs have betrayed very clear housing association principles.

Why Genesis and Notting Hill?

Both CEOS are on the extreme end of housing politics. Neil Hadden, the CEO of Genesis has funded reports (9)from the Policy Exchange  set up by Conservative MPs who are very far from ‘One Nation’ Conservative principles.

Kate Davies, CEO for NHH,  wrote a report in 2008 with a similarly extreme think tank (10) run by Ian Duncan Smith. At the time she said (11),

“social housing is not a desirable destination.” 

Both CEOs support politically extreme views which point to the end of housing for the community.  This seems a very worrying basis for a merger.

Who is the new chair?

Dipash Shah has only just taken up the post of chair of Genesis.  He would become the chair of the new merged housing association.

In 2016 he reportedly earned around £3.5 million (12). It is extremely worrying that the new chair appears to have no experience of housing, but appears to have experience of management buyouts of public assets (think of the combined value of the housing owned by the new merged organisation) and ‘wealth management’ in tax havens. What will his appointment mean for ordinary residents?

Dipesh Shah worked for many years with BP and then in 2003-2006 he was Chief Executive Officer of the United Kingdom Atomic Energy Authority (UKAEA).  In 2006 it was reported (13) that he had attempted to lead a management buyout of UKAEA which was going to hand out nuclear clean-up contracts worth £56 billion.

He is reported to be ‘affiliated’ to 22 companies including solar energy, water and wealth management. The wealth management is a company called Canaccord (14) whose website states:

“We offer a broad range of services including discretionary and advisory portfolio management, stockbroking and independent wealth planning.” 

The company is generating value for our individual, institutional and corporate clients through comprehensive investment solutions, brokerage services and investment banking services. The Company has offices in 10 countries worldwide, including Wealth Management offices located in Canada, the UK, Guernsey , Jersey, the Isle of Man and Australia.” 

Guernsey (15), Jersey (16) and the Isle of Man (17)  are widely regarded as ‘tax havens.’

Will services improve after a merger?

Many residents complain about Genesis’ record when it comes to maintaining their properties. This, after all, is supposed to be their core job. Both HA’s say: “As a larger organisation we will have more buying power, which means we can increase value for money for you, our customers.”  But the evidence is against them on this point:

For example, on 9 June 2016, Inside Housing published an article (18) which reviewed a report on efficiency:

“There was no significant evidence of a clear relationship between scale of a provider and lower costs”. 

On 19 June 2016 Inside Housing published an article on another piece of research (19)concluded:

“There is ‘no clear link’ between the size of a landlord’s repairs operation and cost savings, according to analysis by Housemark…However, it said cost variations were affected more by geography than signing large contracts aimed at creating economies of scale.”

We should not take their word about ‘buying power.’ A merger may well just mean a bigger, more anonymous organisation ‘lording’ it over residents who are in a weaker position to defend themselves.

What happens to our contracts and tenancies? 

Although we are not lawyers, we think that contracts between leaseholders/shared owners and the new organisation will be honoured.

However tenancies are definitely under threat. The HA bosses have been campaigning for what is called ‘de-regulation’ – giving H.A managements more power over their residents.  The Chair of Genesis recently stated (20): “We have advocated on behalf of less regulation in certain areas.’’ In other words, less protection for residents – especially tenants.  

Both Neil Hadden and Kate Davies have publicly supported removing residents’ legal protections through the process that is often called ‘de-regulation.’ The merger will probably decrease legal protections for residents.

That  is the point of ‘de-regulation’ in the H.A. sector – to give greater power to Boards and CEOs and take away legal and other regulatory protection from residents.

Will the 170,000 residents of Genesis and NHH get a choice? 

No. Genesis have said that for the merger they “expect to work very closely with” an unelected ‘regional committee’ that has not even met yet (all four regional committees were axed only a month ago).

Genesis does not appear to like transparency. No minutes are ever published of the meetings of the previous regional committee meetings. Residents have only been allowed to attend as ‘observers’. They do not even have the right to speak. The terms of reference covering the axed regional committees does, however, make their powerlessness quite clear. It notes:

“For the avoidance of doubt, the… Regional Committees are not part of the governance structure.”

So Genesis will be ‘working very closely’ with a committee of unelected residents, meeting in secret, which does not allow residents to speak, and which has absolutely no power at all.

NHH is as bad. It has provided residents with a questionnaire on its website. However, this only allows residents to ‘agree’ with the merger. There is quite simply no ‘tick box’ if you are against the merger.

NHH has organised ‘estate roadshows’. This is a rubber stamping exercise to pretend they have consulted residents. Questionnaires at the roadshow do not have an option for residents to say ‘no.’. They say: “Our staff will be available to meet you and answer any immediate questions you have about the proposals and receive your feedback about what the priorities for the newly merged organisation should be.”( our emphasis)

But it offers no meeting in which residents can have a voice. NHH residents can’t test the arguments and decisions of NHH managers in open meetings. Let alone actually say ‘no’ to a merger.

Is ‘bigger’ better for the people of this country?

Is it in our interests to have mammoth housing associations? 

Will getting huge make H.A.s more efficient at running things,  getting repairs done or building good quality, low cost housing for the community? 

Will these huge organisations actually solve the housing crisis or make it worse?

Are they not already far too secretive, out of touch, and out of control? 

Maybe what the people of this country need is accountable, democratic and local housing organisations for secure homes not mammoth outfits run for the benefit of power-hungry executives chasing huge salaries and slavishly following the very poor housing decisions of successive governments?

So this why there is a need for a meeting to create our collective response to their merger:

Please come to this meeting! You have a voice!

MEETING FOR ALL RESIDENTS OF NOTTING HILL HOUSING AND GENESIS HA. 

WEDS 16 AUGUST 2017 

6:30-8:30PM 

Westbourne Grove Church,

Westbourne Grove, London, W11 2RW

The venue has wheelchair access

 

 

Endnotes

(1) Rent Freedom. The Future of Housing Association Rents. NHF. November 2016

(2) https://policyexchange.org.uk/publication/a-new-settlement-between-government-and-independent-housing-associations/

(3) http://www.centreforsocialjustice.org.uk/library/housing-poverty-social-breakdown-social-mobility

(4) Neil Hadden. The Full Interview. Inside Housing 4 August 2015

(5) e mail to a Genesis resident

(6) See Neil Hadden interview cited above

(7) See Neil Hadden interview cited above

(8) https://redbrickblog.wordpress.com/2017/01/07/one-article-does-not-wipe-the-slate-clean/

(9) https://policyexchange.org.uk/wp-content/uploads/2016/09/freeing-housing-associations.pdf and https://policyexchange.org.uk/wp-content/uploads/2016/09/A-New-Settlement-Sept-16-1.pdf

(10) http://www.centreforsocialjustice.org.uk

(11) http://www.centreforsocialjustice.org.uk/library/housing-poverty-social-breakdown-social-mobility

(12) https://www.bloomberg.com/research/stocks/private/person.asp personId=8627924&privcapId=20346539

(13)  http://www.independent.co.uk/news/business/news/atomic-energy-chief-quits-after-buyout- vetoed-6098404.html

(14) http://www.canaccordgenuity.com/en-GB/wm/wealth-management-uk/

(15) http://www.bbc.co.uk/news/world-europe-guernsey-33181401

(16) https://www.euractiv.com/section/euro-finance/news/jersey-and-guernsey-struggle-to-justify-zero-business-tax-rate/

(17) http://www.cbc.ca/news/business/kpmg-offshore-sham-1.4006469

(18) https://www.insidehousing.co.uk/home/home/no-link-between-large-landlords-and-efficiency-47227

(19) https://www.insidehousing.co.uk/news/news/no-clear-link-between-repairs-contract-size-and-savings-43940

(20) Letter to Genesis Residents of 18 May 2017

 

 

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