Somebody claiming to work for a Housing Association ('HA') made the most startling claims in the comments to an earlier post:
1. HA's are not a branch of government, they are independent organisations.
2. About half of the residents of the HA I work for claim HB. The 'true cost' to the taxpayer therefore is the level of HB that gets paid to the resident (or direct to us)as we don't pay any of that money to the government.*
*ahem*
I responded as follows:
1. HA's are creatures of legislation, whose management are appointed by and are under the control of The Housing Corporation (I thought that had been re-named recently?), which is in turn part of the DCLG. They get substantial grants and cheap loans from the taxpayer, they have statutory duties and all manner of tax breaks (primarily corp tax exemption/refunds and SDLT exemptions when they buy land and buildings).
2. Basic bookkeeping says whether the taxpayer pays money to HA's via the DWP (as Housing Benefit) or via The Housing Corporation (as grants and loans) makes bugger all difference. People have to be housed and costs have to be met.
PS, The HC's accounts show that they made total grants [to HA's] of £2 billion in 2007-08 and had made cumulative total loans to HA's (also known as RSL's) of £17 billion (less amounts written off, unknown).
* I could add, if they were truly private, independent organisations, they would pay quite a bit of money back to the government, it's called "corporation tax". There are bizarre rules that say while not all HA income/surplus is automatically exempt; most of them qualify as charities anyway, and even if they do end up paying corporation tax to HM Revenue & Customs, then The Housing Corporation will reimburse them. Enabling the government of the day to boast about all the tax they are collecting and all the 'investment in housing' they are making, I suppose.
*/ahem*
Disclaimer - let it be noted that I am in favour of scrapping Housing Benefit for private landlords and building more social housing, under the direct control of democratically elected local councils. When I am in charge, HA's will all be disbanded and their assets handed back to local councils.
Reeds tottering in the wind
4 hours ago
14 comments:
Mark,
Firstly yes the Housing Corporation is defunct and replaced by the Tenants Services Authority - same people, different name.
Although they receive public money they are still not subject to FOI even after the L&Q Housing Association ruling in the Appeal Court. I originally queried the FOI bit with the TSA who passed me to the OIC, who passed me to the Justice Dept who ruled as above.
Yes they have statutory duties, one of which is a duty of care, however that means sod all in some cases!
WFW, I vaguely remembered reading about the TSA on your 'blog but I was too lazy to look it up :)
D'you fancy being Housing Minister in my Bloggers Cabinet? The post has become vacant because the previous incumbent stopped blogging three months ago.
Mark,
HA's management boards were not appointed by the Housing Corporation and are not appointed by the TSA. The point is that they are independent organisations and the wider point is that the HB subsidy for residents is whatever the level of HB is not some notional 'true' cost of social housing.
HA's do get substantial grants from the taxpayer although I am not aware of any cheap loans. That does not make them a branch of government.
They do have statutory duties. Who doesn't?
They do get tax breaks (primarily corp tax exemption on the basis of charitable status and SDLT exemptions when they buy land and buildings).
The taxpayer is actually subsidising some of the cost of new social housing through grants (although a larger subsidy is made by private developers or, rather, their customers, through S106 agreements)and also through subsidising rents.
You add that paying Corporation Tax makes an organisation independent. Are all charities therefore arms of the government?
You assume that all HA's obtained their stock from local councils. Some of the largest HA's started life very differently.
*sigh*
"The point is that they are independent organisations"
Not true.
"the wider point is that the HB subsidy for residents is whatever the level of HB is not some notional 'true' cost of social housing."
You don't understand bookkeeping. Whether the HA gets money from taxapayer via DWP or TSA is irrelevant. Six of one, half a dozen of the other.
"HA's do get substantial grants from the taxpayer although I am not aware of any cheap loans."
Well, look at The H Corp accounts to which I linked. That's why I put in the link - so that people can read them and make up their own minds.
"That does not make them a branch of government."
Yes it does.
"They do have statutory duties. Who doesn't?"
Without statutory duties and taxpayer funding (whether via TSA or DWP is irrelevant) HA's would simply not exist. No private landlord is forced to let homes at slightly below market rents to a defined list of people and 'key workers'.
"The taxpayer is actually subsidising some of the cost of new social housing through grants (although a larger subsidy is made by private developers or, rather, their customers, through S106 agreements) and also through subsidising rents."
Possibly so. But social housing is good value and those are capital grants for an appreciating asset.
"You add that paying Corporation Tax makes an organisation independent. Are all charities therefore arms of the government?"
Nowadays most of them are.
"You assume that all HA's obtained their stock from local councils.
Where did I say that? I didn't. And it's irrelevant anyway.
"Some of the largest HA's started life very differently."
Possibly so. So what? What's important is where we are now. HA's have no shareholders other than the government. They belong to the state.
*/sigh*
Mark
*/sigh*
You merely stating that HAs are not independent organisations doesn't make it so. Why do you think that they are an arm of the govt?
The point about about HB is not that one subsidy is different from another subsidy. I totally agree they are all the same. The point is that the HB subsidy is not, as you suggested earlier, from one arm of the govt to another as HAs are not the govt.
*/ahem*
I am not sure by what measure social housing is 'good' value. S106 schemes are cheap because they are subsidised by developers who are forced to take less than market value for the product.
*/sigh*
A cheap loan from the government does not make you a branch of the govt. Developers have recently benefitted from cheap loans. Does that make them branches of the govt?
HAs would exist without statutory duties although I am not sure which ones you are talking about. They have existed for decades - long before grants and before housing benefit. They met a need then and they would continue to do that without government interference.
You asked where you said that HA's obtained their stock from local councils. */ahem* It's in the final sentence of your post, just after the ludicrous dream of having councils run social housing again.
You say that HA's have no shareholders other than the govt. */sigh* The truth is that HA's have no shareholders including the govt. HA's appoint their own boards, they appoint their own staff. They are limited companies, mostly with charitable status. They are regulated by the government through the TSA. The level of regulation is oppressive but that fact does not mean that HAs belong to the government.
*/sigh*
*/ahem*
*/for god's sake*
Anon: "S106 schemes are cheap because they are subsidised by developers who are forced to take less than market value for the product."
Can we agree that:
1. s106 schemes are a kind of tax on property developers? Or a tax on the planning gain? So that does not make them "cheap", it just means that somebody else is paying for it*. So from the developer's point of view, they are expensive.
2. Normal taxes are paid in cash. The s106 'tax' is 'paid' by handing over some of the finished product (the housing) to the government.
3. Most completed s106 housing is handed over to Housing Associations.
4. I accept that s106 agreements are seen as an alternative to non-s106 or SHG-funded housing, but that is an administrative thing. Either way, taxes are raised and social housing is built.
5. I happen to know this for a fact that most developers have to have over a certain proportion of their completed housing projects to Housing Associations (a lot of my clients are property developers, I know my stuff).
6. HA's are the major beneficiaries of s106 agreements. Central government wants to emasculate local govt and prefers HA's controlled via THV via DCLG to local authority housing.
7. As evidence, I adduce this.
"There are also worries that some housing associations may collapse as a result of the economic crisis. The MPs point out that associations are also badly affected by the collapse in development opportunities achieved previously by Section 106 agreements.
Over recent years public subsidy for the building of new social homes has fallen from 90% to between 30% and 40%, to a large extent because of developers' contributions to the financing of social housing schemes as required by planning gain agreements."
8. Ergo, if s106 agreements are a tax, and the tax is collected by Housing Associations, HAs are effectively tax collectors as well as being managers of social housing. Ergo, they are part of the government.
* As an aside, taxes on the value of planning permission are, in economic, very good taxes, different topic.
Yes, how did the Housing Associations get on before Maggie T's War on Council Housing? I used to live on an estate which was built by a Housing Association (The Artisans, Labourers and General Dwellings Co.Ltd) in 1874. They can't have been an arm of government then, surely.
Anon, in my last comment, THV should read 'THC".
Bayard:
1. The Tories invented HA's in their modern form (along with a lot of other quangos). It was all part of their plan to sell off council housing, emasculate local councils, centralise everything and create better paid jobs for party hacks. Nulabour have just taken it to extremes.
2. The fact that these things are called 'housing association' does not mean that they are in any way related to other associations that used this name in the past. By analogy, the same way, a lot of government bodies now refer to themselves as 'charities' (i.e. 'fakecharities'). Or modern building societies are just banks.
Mark, thanks for clearing that up. Perhaps you should call the original HAs "private" and Maggie's ones "public". I sense that much of "Anon"'s ire above has been caused by this confusion. Presumably the private HAs, like the Peabody Trust, don't come under the TSA.
B, the Peabody Trust is a good example. When it was set up by Sir George in 1862, it was clearly "private" (although governed by Act of Parliament) but it has since gone the way of all worthy causes. The 2008 accounts show that their properties at cost of £940 million were part-financed by a "Social Housing Grant" of £363 million. And it is an SRL.
Further my previous comment:
Fact: When the Housing Corporation was 'wound up' and the Tenants Standards Authority (regulatory) and the Homes & Community Agency 'created' they both under the umbrella of the Dept of Communities and Local Govt and both are sponsored and funded by DCLG (cnfmd on websites of TSA and HCA), ergo they are govt bodies - quango/NGO same difference!
HCA website states it provids funding for affordable housing, ergo public money.
Peabody Trust was registered with HC and will therefore be registered with TSA and therefore subject to the same 'rules' as any other HA.
As to HA's origins, most of present day HAs created to take over council stock. Examples Cottsway/West Oxfordshire District Council - Charter Housing (part of Santuary)/Cherwell District Council - Vale Housing/Vale of White Horse District Council, etc etc etc........
Some of the above have grown into large organisations - witness Sovereign Vale, Sanctuary etc.
If any 'body' exists through public money then they are public bodies, No?
Recent Court of Appeal in the case of London & Quadrant HA found that they are public bodies for the purposes of the Human Rights Act. That is just 'playing with words' - if they public bodies in one respect then they must be pubic bodies!
Following e-mail exchanges with Dept of Justice they advise "The practical meaning of the term 'public authority has been left open to judicial interpretation", so yet again we have unelected and unaccountable judges deciding whether the public can action an FOI request! They also state " The Sec of State has, under section 5 of the FOI act, the power to designate as a public authority any organisation that appears to exercise functions of a public nature or that provide public authority services."
HAs provide social housing using public money - ergo they are public bodies, fake charity status not withstanding!
A hidden benefit to HAs is that being politically correct/government quangos/frie4nds of the councillors they will get planning permission more easily & indeed often get councils to "sell" them council land at a token rate where commercial businesses would be required to build a school/hall/council chambers & present it free as a not-bribe. Considering how cheap housing could be & what a big industry it is it is quite surprising that nobody has become a billionaire on running an HA.
So are there any private HA's left or have they all gone to sit under the money tree?
WFW, thanks for covering fire.
NC, they aren't that greedy. Individual HA chiefs prefer easy money to lots of money.
B, that I do not know. I'd assume most have given in to temptation.
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