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All councils were supposed to carry out a Stock Options Appraisal and report back to the ODPM before July 2005. However the Housing Minister
admitted in December 2007 that thirteen councils still did not have a viable strategy for meeting the government's Decent Homes target. It is
likely that a number of others who had their option 'signed off' by the regional government office will in practice run short of resources.
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Many councils who have completed an options appraisal are coming back for a second go. This includes councils where tenants have democratically
rejected stock transfer in a ballot and a number of authorities that set up ALMOs - promising tenants this was not two-stage privatisation - are now
talking about stock transfer.
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However hard Ministers, consultants, elected councillors and senior council officials try and pretend that somehow your authority is the 'exception'
and everyone else is getting on with meeting Decent Homes, this is clearly not the case. The government won't achieve its manifesto commitment
("By 2010 we will ensure that all social tenants benefit from a decent, warm home with modern facilities") unless it makes additional resources available to fund the gap.
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Some councils genuinely try and conduct a fair and balanced process but many carefully select a small group of compliant tenants who get cuddled, flattered, wined and
dined, bussed around the country, put up in hotels and prompted to come up with recommendation the council (or officers) want.
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The fact that senior officers stand to get a big pay rise - and some brownie points on their CV - if they get a transfer or ALMO through can't but
influence their motives. Similarly don't be conned by the industry of so-called Independent Tenants Friends and Independent Tenants Advisors. They
are consultants who make a living out of the growing 'consultation' industry. Most won't talk about the 'fourth option'. You'll get plenty of
speakers and visits promoting transfer, PFI or ALMOs but little of the argument against. They loyally promote the ODPM's agenda and closely liaise
with the ODPM Commmunity Housing Task Force who were setup to 'promote the stock transfer product'.
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If you are going through a stock options appraisal get in touch with DCH. Make sure you get speakers invited in who will put the case against privatisation
so people hear both sides of the argument. Here are some suggestions of questions to ask...
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General Principles
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1. Democracy. Is the options process democratic? Should be a fair and balanced debate with equal resources for both sides to put arguments followed by a ballot of all tenants - whatever personal views of people in group. Is the options group itself democratic? We get messages from people all over the place moaning that the options groups take place during the day therefore only accessible to non-working people - unelected tenants chosen by officers or self-selection - no democratic accountability.
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2. The council will try to muddle up the financial and the political arguments. Its important that the group try to separate the assessment of the options themselves from the 'there is no money arguments'; imagine themselves on level playing field in order to make objective assessment of benefits/risks of stock transfer, PFI and ALMO, especially in regard to tenant involvement. It is important to be honest - if some tenants are politically keen on transfer they should say so and if they're only choosing it because "there is no alternative" they shouldn't allow the council to badge this as support.
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3. Examine council's financial case critically (see below). If the council can meet the DHS out of its own resources that should put an end to the process. If there is a genuine gap then -
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4. Understand the financial case for Fourth Option nationally.
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5. Examine the 4th option politically - consider evidence that govt policy could change - make your own political judgment about it.
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6. Consider how the council could make a case for the 4th option locally, to feed into national picture - ask them to press the government for that to be made a reality. Tenants who are not convinced politically there is benefit in transfer and/or tenants who are convinced that we can achieve the 4th option politically will obviously expect this to be a long process - but all tenants ought to be able to make a case for the council at least trying to put pressure on the govt - it won't stop them picking one of 3 options later if there is no success.
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a) start with evidence for need, level of own resources. Keith Hill said 100 councils can meet the DHS out of their own resources. Is yours one of them?
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b) If not, how big is the gap, and, what proportion is the gap compared to work that can be done out of own resources? Its also worth asking the question - how long after 2010 would we meet the DHS if we didn't get any extra money?
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c) Look at use of capital receipts - if the council isn't spending all its usable receipts on council housing then it should - some councils could meet the DHS out of own resources if they just used all the capital money available to them.
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d) Prudential borrowing. Woking just announced that it is able to meet the DHS by the use of prudential borrowing. What is it and how does it work in general - ask your council to calculate how much the gap could be narrowed through use of it
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e) M&M changes. If your council's options appraisal was done before Oct last yr it won't have taken into account increased management & maintenance allowance - this included overall increase to of 6% plus weighted more towards north - Londoners lose out but others will gain.
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f) 'daylight robbery' - how much is being ripped off by the govt from your council every year - eg. rents minus (M&M and MRA) - if you could keep all the rents to spend on homes would it solve problem or at least make things better
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g) Debt write-off. How much is overhanging debt? How much will govt pay to write off to enable transfer - how much would that amount contribute to meeting DHS if govt gave it to council direct?
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h) How much is TMV (tenanted market value) of stock - total and per property so you can see at what knock-down prices your homes are being given away to private sector. Total - if negative that's more public money to fill gap - what effect would it have if that was added to debt write-off and given to council direct?
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Will there be a fair and balanced debate before any decision is made and does this include equal resources for both sides to put the arguments for and against the proposal?
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Will tenants be given a vote in a formal ballot over stock transfer, PFI and ALMOs?
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Will tenants be offered an unbiased clear option of remaining as council tenants, using existing resources, investigating prudential borrowing and continuing to campaign to win the fourth option?
This should not be described as 'Stay as you are' but 'Using existing resources and continuing to seek additional resources'.
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Have tenants seen the details of the 'stock conditions survey', do the results tally with tenants' own experience of estates/work they are familiar with or has the
council exaggerated the problems in order to justify selling homes, PFI or ALMO?
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How much is the total cost to meet the Decent Homes Standard, how much of that can the council meet out of its own resources, what's the gap (if any?)
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If the council believes that existing resources won't be enough to meet the Decent Homes Standard by 2010 how much longer would it take to reach the standard?
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If existing resources are insufficient what work would not be completed and how important is this work to tenants?
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If the calculations regarding the Decent Homes Standard were done some time ago, has the council modelled the effect of the changes in the Management and Maintenance Allowance introduced over the last year (one increase Sep 03, one Nov 04), and how much extra resources does that give them?
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What money does the council receive each year from 'right to buy' sales and is 100% of the money that it retains reinvested in council housing?
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What are the council's debts and if the government wrote off overhanging debt for all councils - not just those who transfer - what improvement would this make to the council's financial position and its ability to use prudential borrowing?
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Has the council investigated the potential of prudential borrowing to raise money to meet the Decent Homes Standard?
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How important to local tenants are the specific targets set out in the Decent Homes Standard and are tenants being given the opportunity to weigh up the benefits of meeting Decent Homes against the disadvantages of stock transfer, PFI or ALMOs.
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How much of the Basic Credit Approvals the council receives from government does it use towards improving its housing stock each year?
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What is the Tenanted Market Valuation of the stock and does giving the homes away at knock down prices represent good value for money?
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How much does the council estimate the set-up costs of transfer to be?
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How much will the council actually gain as a lump sum through the transfer, after set-up costs and debt are taken into account (if anything) and what do they plan to spend this on?
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How many 'stars' does the council have for its housing services and can the ALMO realistically hope to achieve the two stars necessary to gain investment?
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How much will the costs of consulting on and setting up the ALMO to be?
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Impact on affordability: what will be the cost to tenants of paying the ongoing maintenance over thirty years to the PFI contractor?
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What is the council's past record of policing private contractors, do they have experience of policing anything comparable to a PFI contract and how do they think they will be able to enforce a complicated PFI contract with a major consortium when many major government departments have singularly failed?
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If a private consortium takes over the management of an estate(s)/street(s) how will tenants be able to hold the management to account?
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Capping of leaseholder contributions: how much will tenants have to pay to subsidise the work done to the benefit of leaseholders on the PFI estate(s)?
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Have councillors and tenants been told about the discussions taking place with Ministers to secure a 'fourth option' for council housing - direct investment
as an alternative to the three options of transfer, PFI and ALMOs?
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What has the council done to support this proposal?
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What have local MPs done to support the fourth option and have they signed the early day motion in Parliament?
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Are tenants aware that whilst the government may be making negative statements (it keeps changing all the time) they have already given ground on
'Daylight Robbery', prudential borrowing and considerable progress was made between John Prescott and various representatives during talks in September. Many
people expect these talks to resume.
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Are tenants and councillors aware that the fourth option is backed by tenants around the country, all the main trade unions and the TUC, the Local
Government Association and many local authorities and growing numbers of MPs?
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Stock Options Appraisals
Factsheet
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