Examination of Witnesses (Questions 20-39)
MR MOHNI
GUJRAL, ARUN
MISRA, MR
CHARLIE ADAMS
AND MR
DAVID COWANS
15 MARCH 2004
Q20 Andrew Bennett: Such as?
Mr Cowans: In east Lancashire
there is some debate about this. There has been some debate in
Hull but I cannot comment on other areas because we are not actively
involved in them. If you are asking me for areas of possible involvement
in the future, I think a much more pro-active gathering together
of housing associations active in that area whether it is in promoting
a debate about how they are going to be more effective together
probably will be a good way forward, yes.
Q21 Christine Russell: I would like to
focus my questions on the meeting the housing needs of ethnic
minorities and perhaps I could just focus my questions on Presentation.
You mentioned at the start about the need for housing associations
to be aware of community cohesion so from Presentation's point
of view how do you feel that the needs of black and minority communities
can best be integrated into the programmes of the Housing Corporation?
Mr Gujral: I think first and foremost
what people need to recognise is the misconception that exists
about black-led organisations. If I can use the term "black"
to reflect BME communities to facilitate conversation, it is very
clear that people do misconceive what black-led housing associations
are about. They almost always believe that we only have black
people and that is fundamentally not correct.
Q22 Christine Russell: From your 10,000
properties roughly how many are black?
Mr Gujral: I wish it were 10,000
properties; we house 10,000 people, we are only three and a half
in management but I would welcome the other seven thousand homes.
The issue is that 50% of our homes are let to the indigenous community
and 50% to black and minority ethnic communities. Thirty per cent
of the workforce is from the indigenous community; 30% of the
board is from the indigenous community. We are very much an inclusive
organisation and increasingly BME organisations are inclusive
organisations. I think it is important to correct that misconception
that exists within the sector and outside the sector. To answer
your question specifically, we believe the Corporation has a very
strong leadership role here and it has fulfilled that in the past.
I think it is important to give credit to the Corporation in the
past under the leadership of people like David Edmonds; they achieved
something that is unheard of within the social sector either in
this country or, for that matter, in a European or international
context. It is worthwhile recognising that. The important thing
is that they have lost that vision; they have lost that champion
role and I think they need to resurrect that and rediscover it.
There needs to be very strong leadership from the front and we
are very hopeful for John Rouse (who has just been appointed Chief
Executive Designate). What he managed to do with CABE was to successfully
champion design as an issue for government and the sector and
the building industry as a whole. We would hope that he could
do the same for the needs of BME communities because the demographics
of this country, particularly in the urban conurbations, show
that those communities are going to be of significant proportion
of those conurbations. We also recognise the fact that already
in some local authorities they are the ethnic majority and yet
there are far too few organisations that represent their views;
far too few organisations that have a reflective workforce or
a management structure that is making policy decisions for those
communities with very little recognition of what those needs are
and what those aspirations are of those communities.
Q23 Christine Russell: That is quite
a serious criticism when you say that the Housing Corporation
has lost the vision. Can you pinpoint when the vision was lost
and why it was lost. Was it structural changes within the organisation
or personnel changes?
Mr Gujral: I think it is fair
to say that probably in the last eight or nine years that vision
has not been there. It does take a leader to stand up, somebody
to champion the issue and recognise that there needs to be some
fundamental changes to be made within the structures and the processes
of the organisation. In our submission we make criticism of the
fact that certain systems and procedures actually mitigate against
the involvement of black-led organisations and therefore the impact
that that has on the BME communities. I think it is important
also to recognise that there is considerable capacity within the
BME communities and their organisations to achieve much of what
is expected of them, but without the proper resources, without
the proper investment, that is never going to happen. It goes
back to an earlier question which we answered, which is that you
have got to provide neighbourhood models and local organisations
that can help themselves. Again that is where the Corporation
needs to grasp the nettle and move forward.
Q24 Christine Russell: Do you want to
expand a little on what you have said in your submission about
your fears of losing out on money to larger organisations?
Mr Gujral: It goes back to this
issue of misconception. We, as an organisation, have recently
borrowed £100 million on the open market. A few years ago
people were still talking about black-led organisations as being
very small institutions, unable to compete and unable to develop
the kind of serious initiatives that were required.
Chairman: That is the division bell.
We will reconvene in about 10 to 15 minutes.
The Committee suspended from 4.50 pm to
5.00 pm for a division in the House
Q25 Christine Russell: Reading your submission
there seems to be a bit of contradiction in it because on the
one hand you are saying that you think because of the isolation
of some of our black and minority groups then they should get
special treatment. On the other hand you seem to be complaining
that the Housing Corporation is not fully integrating these groups
into their programmes.
Mr Gujral: I am not quite clear
of the association you are making. I do not think at any point
would we argue for special arrangements. We have never suggest
that and nor would we. I think it is very clear that we recognise
that there are unrepresentative groups and therefore greater effort
needs to be made to engage with those groups and, if necessary,
come up with bespoke solutions for them, but never special resources.
It is a question of using existing resources.
Q26 David Clelland: There are a plethora
of organisations with a regulatory role over housing associations.
What should the Housing Corporation be doing about that?
Mr Adams: We did a calculation
at Hyde to work out what the cost to Hyde was—my own association—of
coping with the regulatory regimes of which there are many. We
worked out that it was about £800,000. This is an organisation
with a turnover of just short of £90 million. We thought
that was an excessive amount of money and I would entirely agree
that there are far too many organisations with a different regulatory
role. You will see from one of the submissions that we have made—the
G15 submission—that the G15 believes that the decision to
split the inspection function away from the Housing Corporation
and give it to the Audit Commission was wrong. There are all sorts
of positive elements to that but fundamentally we disagreed with
it because splitting the responsibility of the housing management
away from regulation and investment seemed to us to be inappropriate.
It is very hard for the Corporation to argue the case because
it is only one of a series of bodies which is responsible for
regulation, all of which have equal status within the constitution
(if I can use that phrase): there are the Registrar Friendly Societies,
there ae the Charity Commissioners, there is obviously the Audit
Commission; there are local authorities who do a lot of inspection
work particular for those of us involved with supported housing.
All the Corporation can do is to argue that the regulatory burden
should be reduced but fundamentally it is government that has
to take the relevant decisions.
Q27 David Clelland: Presumably the burden
could be reduced by clarifying the system, but do you think the
number of regulatory organisations ought to be reduced?
Mr Adams: The two things are inter-related.
One has to say this is true for the audit systems within housing
associations as well. There are several different audit systems
which apply irrespective of the role of regulatory bodies. If
you can streamline those then you can considerably reduce the
amount of regulation. This is difficult enough for a large housing
association; it must be terrible for a smaller association. If
you are an association with only a hundred units or even smaller
than that, having to cope with the regulatory regime must be extremely
difficult.
Q28 Chris Mole: I think Mr Adams has
already given us the view from the organisation he is representing
that it does not make sense to split regulation from inspection.
Perhaps the other witnesses could comment on that.
Mr Gujral: I concur with that
view.
Mr Cowans: I concur with that
view although I do not think it matters that much if inspection
is seen as a separate activity. I think if you had dual regulation
then there would be a real problem. Personally I do not have a
massive problem about someone doing inspections and then reporting
it to the regulator. There is just a minor distinction there.
Q29 Chris Mole: Can the Audit Commission
do its role effectively if it does not have any other regulatory
role at all?
Mr Cowans: Yes, I think it can.
Mr Adams: I have to say that I
do not think the Housing Corporation were particularly good at
inspection. The Audit Commission, having taken it over, have taken
a much tougher regime and although publicly we may complain about
it I think privately the Audit Commission's approach is probably
very healthy for the housing associations. It is not a black and
white position on this; I think the Audit Commission in many ways
is doing a good job. My colleagues may disagree with that—in
fact I know one of them will—but having said that I think
the core issue is an important one. If you split the housing management
function away from the body which is responsible for regulation,
governance and investment in new housing, particularly when thinking
about the sustainable communities' agenda, then I think it no
longer becomes appropriate to have the inspection regime separated
from the regulatory regime and the promotional regime. If you
accept our argument that what is needed is a body which promotes
institutions, housing associations at a very local level to address
the sustainable communities' agenda then the notion of having
a body which is responsible for commenting on housing management
which is a separate institute is not appropriate.
Q30 Andrew Bennett: The Housing Corporation
used to allocate its money depending on whether you did well in
the regulatory review. That was a bit unfair, was it not?
Mr Adams: I do not think it did
do that, actually.
Q31 Chris Mole: Do you think the Government
should extend the Audit Commission's role in regulations?
Mr Adams: No, the reverse, I think.
My view is that it is not appropriate to have the housing management
inspection regime within the Audit Commission for the reasons
that I have given.
Q32 Christine Russell: Sustainable communities
usually have mixed tenure and I noticed David Cowans, in your
submission you talk about making mixed tenure work. Would you
like to tell us how you think the funding and the management of
housing associations need to be liberalised in order to increase
the number of affordable units that associations can build?
Mr Cowans: One of the big issues
for me is that a lot of research—some of the Rowntree research
and other research—suggests that people who live on a mixed
tenure estate regard their area in much higher esteem than if
they are in a mono-tenure largely affordable rented scheme. Secondly,
perhaps as importantly, people outside the area regard that area
better, so its reputation rises just because of that. There is
a lot of evidence to suggest that if you have mono-tenure places
there are not as many role models for young people as if you have
mixed tenure. We, as a group, completely support the idea that
there ought to be mixed tenure. A lot of people support this.
The problem is that traditionally what we have done is build the
housing for sale at the front of the estate, quite nice (if you
like that sort of thing), and the affordable at the back usually
somewhere near a railway line on the worst part of the site, clearly
identifiable as affordable housing. Is that mixed tenure and does
it live with the spirit of the sort of place that you cannot really
spot just by people's living environment whether they are living
in particular types of property? That is why we got into what
we are now into, which is our own house building company to acquire
the sites, make sure we build the properties exactly the same,
but the problem is it costs a bit more money to do that so we
cross-subsidise from our profits into the affordable. That means
that we can do more of them and they are of a higher standard.
I am absolutely sold on this. It is definitely the way forward.
It is very popular with people who want to live in it. Some people
would criticise it and say that we cannot build as many houses;
that is not true, you can, as long as you are able to cross-subsidise
profits across. However, you do require a whole set of new skills
to those that you traditionally have, and those skills are difficult
to acquire. We have managed to acquire them but we started doing
this four years ago so it has taken us a while to set it all up.
We now have our own house building company, staffed entirely with
people who come from the house building industry who we have persuaded
to work for us and they do now without too much difficulty. That
requires a real change in mindset. There are some examples of
housing associations working with developers who are doing similar
things but they are very, very, very small. If it were possible
to do that sort of thing just with a private developer it would
be ideal.
Q33 Christine Russell: What are the obstacles
to a housing association working in tandem with a private developer?
Mr Cowans: There are no obstacles;
they just come from completely different positions. Not everyone;
there are some examples where that is not the case. However, if
you look at the sort of returns that private house builders are
looking for, what their view is about the sort of people they
are trying to sell to, the views they might have about different
types of housing, the view about keeping them separate, these
sort of things makes it difficult. It is not impossible, but difficult.
We are saying in our submission that the Corporation ought to
have, in the future, a piece of work to identify what is the film
script of a mixed tenure community and grant monies ought to be
focused on creating these places that we are trying to achieve
rather than just making the numbers look the right way round.
That is a personal view from our Group's perspective, but I suppose
it is a bit of that vision we were talking about earlier: what
is it that we are seeking to achieve here?
Q34 Christine Russell: In your experience
do you find that sometimes there is confusion between the role
of English Partnership who are cleaning up a site and the role
of the Housing Corporation? Is there a need for some better delineation
there?
Mr Cowans: I think that is a good
point, but increasingly less so. The Housing Partnership was an
important step forward. Again from experience we are doing a relatively
big scheme, mixed tenure, 200 units in Milton Keynes. It is an
English Partnership site where the coordination between the Corporation
and English Partnership has been pretty good really. One can speak
as one finds and it has been pretty good. I think it is improving.
It may well have been in need of improvement but in our experience
it is definitely moving forward.
Q35 Christine Russell: There have been
some suggestions from some quarters that the Government should
in fact divide up the Corporation's investment role between English
Partnership and the Regional Housing Boards. What are your views
on that?
Mr Cowans: I started off by saying
that I thought the principal issue here was not about organisational
structure, it was about getting the processes in place right.
For example, we would develop policy and financial processes that
would deliver the sort of places that we want to create with the
right tenure mix in the right places and then we would re-engineer
back (if that is not an old word) to work out the best agency
delivery processes. I am not sure we are here yet. That is my
view. I think there is a lot of good thinking about getting to
this, but once we get there it should be a relatively straightforward—but
not simple—task to identify the sort of organisational structures
that would make that a reality.
Q36 Christine Russell: What about the
rest of you? Do you have any views on the Housing Corporation's
investment role?
Mr Gujral: I think personally
the Housing Corporation has been very successful and it has shown
that it has been one of the leading agencies in terms of investing
and providing new supply. It should not be unnecessarily criticised.
I think it can improve—of course it can improve—and
we have spoken about ways that that can be done. I certainly do
not think its role for funding should be taken away and passed
to other agencies. I think it has fundamentally achieved what
its objectives are.
Mr Adams: I agree.
Q37 David Clelland: Should housing associations
be made more accountable to the large variety of stakeholders
and, if so, how? Or should their main line of accountability
be to the Housing Corporation?
Mr Adams: I think the problem
with accountability is that it tends to mean whatever you wish
it to mean. It is one of those ill-defined terms. The fact that
housing associations are not democratically accountable makes
them very conscious of the fact that they need to be accountable.
I am not saying it is true of all housing associations, but certainly
I think it is true of the bulk of those receiving public finds,
that they find a huge variety of ways of trying to be accountable,
including to their local communities, including to the local authorities
where they work, particularly—and increasingly—to
their residents and stakeholders. There are a whole variety of
ways in which they are attempting to be accountable, but are very
conscious of the criticism which is often made of them that they
are not, and I think that is what makes them try so much harder
to be so.
Q38 David Clelland: But you think there
are some weaknesses there. You told us they are doing it in a
voluntary sense; they are trying to be more accountable because
that is what you would like them to do but there is no obligation
on them.
Mr Adams: I think there is an
absolute obligation on them to do so. The Corporation is consistently
saying to housing associations that they must constantly seek
to be accountable and there is a very lively debate between the
Housing Corporation amongst housing associations as to how to
create that accountability structure. The argument is hardly ever
settled because there are a whole variety of different forces
at work.
Mr Gujral: I think it is also
worth recognising that accountability is any given moment in time.
The operating environment that we all function in is a constantly
changing environment. Opportunities develop over a period of time
and I think we are very much, as a sector, at the leading edge
of how we can be accountable and make sure that there is a transparency
in our actions. I think Charlie is absolutely right in terms of
what he is advocating. Clearly there is a very strong onus upon
us to be transparent and clear in terms of what we are doing.
I think increasingly the sector is rising to that challenge and
will continue to do so.
Mr Cowans: And increasingly trying
to be accountable in the right way to the right grouping, so there
are these whole layers of accountability starting from what you
do with the individual who lives in a property right through to
those communities, the local authorities and they all require
different levels and different forms of accountability. The accountability
process is quite sophisticated and there are many layers of it.
It is always moving, developing and changing which, for me, is
one of the key notes of real accountability that is changing because
you are listening to what people are telling you.
Q39 Andrew Bennett: Most tenants do not
believe you are accountable though, do they?
Mr Cowans: I do not know, to be
honest. If you ask anybody about whether somebody is accountable,
including the state, what would they say?
Mr Adams: I think the answer must
be yes, most tenants do. However, there are some very good examples
of where some tenants think that we are highly accountable.
Chairman: On that point, thank you very
much indeed for your evidence and for your cooperation.
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