Examination of Witnesses (Questions 160
- 179)
WEDNESDAY 3 MARCH 2010
MR ROGER
BRIGHT, CB
Q160 Mr Love: There are suggestions
that considerable information that would be of value to those
that are being consulted is being withheld, a number of assured
short hold tenancies etc., etc. Why is that happening?
Mr Bright: I think a certain amount
of information has been available.
Q161 Mr Love: I am not interested
in the information made available. It is the information that
has not been made available that is important.
Mr Bright: Yes, and I think the
reason for that is the need to ensure that we protect personal
confidentiality because there are obviously people's individual
circumstances at stake here. We have tried to respect that in
terms of the information that we have made available.
Q162 Mr Love: Is it your intention
to take any test of opinion amongst the various groups, leaseholders,
tenants etc, before making the decision? In other words, would
you either hold a ballot, as is done in the large scale voluntary
transfer arrangements for local authorities, or would you undertake
to have someone independently carry out a ballot just to gauge
opinion on this matter?
Mr Bright: These are not, if you
like, homogeneous estates. There are a number of different kinds
of tenancies involved here—there are Rent Act tenancies,
there are assured tenancies, there are assured short hold tenancies,
there are a number of long leaseholders. We want to find out what
those various tenants feel about this proposal, what their concerns
are. We think that a ballot will not give us that. We think that
the consultation exercise that we are conducting at the moment,
which involves surgeries, hotlines and engagement with the tenants,
will give us a better feel for what the tenants' concerns are.
Could I also add that my chairman, Sir Stuart Hampson, and I have
also said that we want to meet the chairs of the residents' associations
on these four estates before the board takes any decision on that.
That meeting has been arranged for early April.
Q163 Mr Love: Let me ask you about
the protections that are being suggested in letters that have
been given to residents on the estates. For example, currently
assured tenants' rents can only be set at somewhere between 40%
and 60% of commercial rents. How will that be enforceable if you
sell the properties? In other words, what reassurances can you
give them on that matter?
Mr Bright: The rent regimes on
all the different types of tenancies are secure when and if a
new owner takes over. The way in which it works is that we have
a tenants' handbook which sets out the rental regimes for those
types of tenancies and the tenants' handbook and the assurances
it contains have to move across to any would-be purchaser. The
Rent Act tenants will continue to have their rents set by the
rent officer as they do at the moment. Essentially, the bottom
line is that for existing tenants the security of tenure and the
rent regime that they currently enjoy would transfer to any new
purchaser.
Q164 Mr Love: We understand that
and we understand that right up until the day of transfer they
will be protected in the way that the handbook suggests. What
I am asking you is: what is to stop whoever purchases these properties
from, over a period of time, either doing away with the handbook
entirely or doing away with those portions that it finds unreasonable
in terms of its commercial interest?
Mr Bright: My understanding is
that existing tenants' rights in these respects are protected
even if a landlord who bought these properties from us were to
decide to sell them on.
Q165 Chairman: You say that is your
understanding. Is that not something you should be crystal clear
about?
Mr Bright: Yes.
Q166 Chairman: You are crystal clear?
Mr Bright: Yes.
Q167 Mr Love: Can we have that in
writing?
Mr Bright: Yes, of course.[3]
Q168 Mr Love: I think that would
be of interest to everyone involved in this particular issue.
I would remind you that you indicated that, as well as good management,
you should take into account the wider responsibility you have
as an organisation to tenants and communities. You said there
was a particular expectation on the Crown Estate. I think you
have used the words "focused housing organisation".
Perhaps you could explain what you understand by the words "focused
housing organisation"?
Mr Bright: In our minds we are
looking at a housing provider whose mainstream business is managing
and owning this kind of housing. That is our understanding. If
we decide to go ahead—I keep stressing we have not taken
the decision yet—we will pay very close attention to the
nature of the purchaser. We are looking for a purchaser who has
a track record in running this as a core part of their business
and who is sympathetic to this kind of housing. We hope to see
that there will be housing association involvement in this.
Q169 Mr Love: You mention housing
association involvement. What are the estimates of the difference
between selling the estate to a housing association who would
accept the conditions laid down in the tenants' handbook and a
sale to a professional, commercial housing organisation which
may wish to change those conditions and sell off properties as
they become vacant? Is there a huge difference between the value
that you would realise from a sale to those two different types
of housing organisation?
Mr Bright: I think it is impossible
to say at the moment. We are exploring whether there are housing
providers who would have an appetite to take on this kind of housing.
Also, we want to explore their credentials. At this stage—and
we are still engaged in that process—it is too early to
say what the outcome might be. Can I just be quite clear? If we
do decide to go ahead, the commercial factor would not be the
sole factor. We are very concerned, if I can put it like this,
that if we do go ahead with this, this housing goes to a good
home, to a provider who has a track record in providing this kind
of housing and is sympathetic to the kind of housing that this
is.
Q170 Mr Love: Who has a track record?
Certain names have been bandied around in the press as commercial
housing organisations that may be interested in this, some of
whom have a track record that would be of great concern to those
who live on these estates. Can they be reassured that some of
those will not be actively considered as possible purchasers of
these properties?
Mr Bright: I can give you an absolute
assurance that we will only contemplate a sale to a provider who
we believe will manage the properties in a way that is sympathetic
to the way in which they have been managed before. That is what
we are seeking to achieve. It is too early to say this or that
provider is acceptable or not acceptable, but I can give you an
assurance that that is what we seek to achieve.
Q171 Mr Love: Can we be given an
assurance that you as an organisation, living up to the particular
expectations that you indicated earlier on, would not sacrifice
the interests of those who are currently residing on your estate
or indeed some of the people in the future who may, through key
worker initiatives, and others reside on the estate simply to
maximise the amount of value that you receive from these properties?
Mr Bright: Let me say right away,
this is not purely about value maximisation. This is about finding
a good home for these properties. Certainly as regards the existing
tenants, I can give them a categorical assurance. When it comes
to deciding who might take over these properties, if we go ahead,
we are going to be looking very closely at the management prospectus
that they hold out to us. We will certainly want to take that
very much into account before we reach any decision.
Q172 Jim Cousins: On the basis of
what analysis did you decide that retail parks were a core activity
and providing housing was not?
Mr Bright: We already own a number
of retail parks. In terms of looking at our investment strategy,
we are looking for assets that will provide a good, sustainable,
long term return. Part of that involves taking into account what
you might call supply and demand. Retail parks, particularly in
the south east, are in short supply; there are not many of them.
Therefore, if the opportunity arises to invest in a good one,
that seems to us to be a sensible investment decision to take.
Q173 Jim Cousins: Do you not find
it a bit odd that at this time in society a government organisation
says that providing retail parks in the south east of England
is a core activity and providing affordable housing is not?
Mr Bright: With respect, we are
not a government organisation. We are a public body and we are
governed by our duty under the Crown Estate Act, which is to maintain
and enhance the value of the estate and the return that we obtain
from it. That is what we are required to do. We are very conscious
of our responsibilities to our tenants absolutely.
Q174 Jim Cousins: Have ministers
approved your strategy of developing retail parks in the south
east of England as a core activity and not regarding providing
affordable housing as a core activity? Have you asked them?
Mr Bright: We have discussed our
investment strategy with the Treasury, that is part of the normal
business that we undertake with them. They are aware of the investment
strategy. To the best of my knowledge, they have no quarrel with
the investment strategy. I think they can see that it is directed
towards meeting our statutory objective which is to earn a good
and respectable return, which goes to the Treasury for the benefit
of the taxpayer.
Q175 Jim Cousins: No, it goes to
the Treasury for the benefit of the British people. This is an
important point of some constitutional significance. It goes to
the consolidated fund, which is there for the benefit of the British
people. Your use of the term "taxpayer" is wrong in
statute; it is wrong in constitutional form. Do you accept that?
Do you accept that the benefits of your organisation go to the
consolidated fund and that has a different constitutional position?
It cannot be just regarded as "the taxpayer". Do you
accept that?
Mr Bright: It certainly goes to
the consolidated fund. That is absolutely correct.
Q176 Jim Cousins: That is not just
the taxpayer. Have you been hoarding vacancies in your housing
stock? Have you been reletting vacancies?
Mr Bright: Up until very recently
when we decided to explore this option, we were letting vacancies
but at the moment we are not.
Q177 Jim Cousins: You are not reletting
vacancies?
Mr Bright: Not at the moment.
Q178 Jim Cousins: That of course
has a big financial gain to the people you hand it on to. How
many vacant properties have you at the present time?
Mr Bright: At the moment out of
1,220 units we have I think a total of 32 vacancies.[4]
Q179 Jim Cousins: You have 32 vacancies,
you think? It would be useful to have that checked because that
number will increase over time.
Mr Bright: It will increase.
3 Ev 116 Back
4
Ev 115 Back
| 
