Memorandum by the Housing Corporation
(DEC 66)
The Decent Homes target is a Public Service
Agreement between HMT and ODPM covering the entire social housing
sector, most of which is still in local authority ownership. The
Housing Corporation has been reporting regularly to ODPM Ministers
on progress within the housing association sector towards achievement
of the target. It has also been operating its rent-influencing,
asset management policies and data-gathering to ensure that housing
associations make their contribution towards ODPM's attainment
of the PSA target.
In this particular context, the Corporation
is working within the social housing policy umbrella to ensure
that RSLs deliver.
ODPM officials in drawing up their memorandum
to the Select Committee drew upon the evidence that we have been
regularly providing. They now have access to all the relevant
data we collect. They shared with us drafts in progress for us
to comment on and to provide contributions where relevant. In
the section on tracking progress we provided the wording for paragraphs
5.4 and 5.9 covering the Corporation's monitoring procedures.
We also commented, on the phone and by e-mail, on the section
dealing with stock transfer.
For the supplementary memorandum we discussed
with ODPM officials what performance information might usefully
be included for the housing association sector and provided suggested
wording for the relevant section.
BRIEFING NOTE
ON TREBORTH
ROAD, CHESTER
1. Description of the scheme
The scheme requires the demolition of blocks
of two storey flats and replacement with 70 new build properties
of varying sizes, all for rent.
2. History of the allocation
The properties at Treborth Road transferred
from Chester LA to Chester and District Housing Trust (CDHT) as
part of the whole stock transfer in November 2000.
The Housing Corporation does not provide grant
funding on stock transferred from local authorities because any
necessary re-development or improvements should be included within
the stock transfer business plan (Circular 13/97).
Chester LA agreed to fund the scheme via LASHG
although, as the provisions of Circular 13/97 also applied to
LASHG, a waiver was required. This was agreed in August 2002 following
discussions between the HC, Chester LA, the MP for Chester and
ODPM.
LASHG was brought to an end in April 2003. Chester
LA would not accept the LASHG transitional arrangements because
of the interest rates prescribed in the funding arrangements.
The LA asked the HC to switch an ADP allocation
from another scheme in Chester which could not proceed. ODPM agreed
in October 2003 that the waiver which had been agreed for the
LASHG could be applied to the ADP.
All allocations from the HC are subject to a
check on the applicant's financial capacity to ensure that public
funds are not put at risk.
The reasons for the delay in progressing the
scheme up until October 2003 are matters for the Trust and the
local authority.
3. Regulatory status of Chester
In October 2003 we published the Housing Corporation
Assessment (HCA) for CDHT.
The HCA is a joint assessment made by regulation
and investment staff and is publicly available on the HC website.
This showed our assessment of viability of the
Trust as:
"The Trust's financial condition is presently
of concern. However, measures are being taken which should over
time address the areas of financial weakness"
and our assessment of governance as:
"The governing body needs to take further
action to ensure it gives capable leadership to the organisation"
The Trust was fully aware of our concerns and
the potential for regulatory action, including withdrawal of any
public funding, if financial management was not improved.
In December 2003 we received reports from CDHT
which showed that the Trust was in financial difficulties, with
insufficient security to allow drawdown of necessary funds in
the short term. We responded quickly by placing CDHT in supervision
and have made three appointments to its board because we do not
believe the current board has the necessary skills and experience
to resolve the financial problems on a permanent basis. This action
was agreed by a joint team from regulation and investment. We
put an immediate block on release of any public funds to the Trust.
We appreciate the position of the tenants of
Treborth Road and their need for improvements in the area. However,
we are guardians of public funds and it would have been imprudent
to allow any public funds to go to an association where short-term
viability was in doubt.
We will be working with the board of CDHT to
improve governance and to ensure that the tenants receive the
improvements they have been promised and the high quality services
they deserve.
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