Hyde Housing (Lambeth)

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Motion made, and Question proposed, That this House do now adjourn.—(Heather Wheeler.)

Photo of Kate Hoey Kate Hoey Labour, Vauxhall 7:23 pm, 29th March 2017

I want to use this debate to draw attention to the failure of Hyde Housing Association in my constituency to honour its pledges and promises to the residents of its Lambeth estates and properties. Back in 1999, the tenants and residents of the central Stockwell area of Lambeth voted for a stock transfer from the council to Hyde Southbank Homes, part of the Hyde Group. Some 2,500 homes were transferred from Lambeth Council, and a few years later, in 2005, the 760 homes on the Kennington Park estate and Bridge estate near Oval followed suit.

Hyde Southbank Homes was a proactive and good landlord in the first few years. Headed by the almost legendary Charlie Adams, it was a bottom-up organisation keen to stick to its commitments to provide tenants with good-quality, well managed and well maintained homes at affordable rents. Unfortunately, following the sad death of Charlie and the many changes Hyde Group made, the management and maintenance went downhill, and residents began to see a difference.

The official documentation relating to the agreement between Lambeth Council and Hyde Southbank Homes constituted a legal document. It stated:

“This contract would contain a legally binding commitment that Hyde Southbank Homes would keep all the promises made to you in this document”.

When deciding on the future ownership of their homes, the residents took seriously their responsibility and the promises that they were given, as we would expect. They were assured, legally and morally, that they could rely on legal protection not just at the time of the transfer, but into the future. The promise document also stated:

“Any surplus money that HSH makes will remain within the HSH and will not be shared with any other part of the Hyde Group.”

Hyde explicitly promised that

“The existing community buildings will be refurbished to provide facilities for all residents.”

It said that non-housing services such as “improved community facilities” would be provided, and that it would

“encourage better and more regular use of local facilities such as the…Community Centre”.

There are two community halls owned and managed by Hyde in my constituency, and they are both at risk, in a complete reneging on Hyde’s promises to the residents. Following a very unsatisfactory so-called consultation between November 2016 and January 2017, Hyde decided to go ahead with its plans to privatise the Stockwell community centre and is looking for an organisation to take it on. It has extended the closing date for expressions of interest from suitable organisations because only three were received, and because the interested organisations were relatively small, with small annual turnovers, and were therefore not in a strong enough organisational or financial position to take responsibility for the building and its management. It is also believed that these organisations find the conditions for taking the lease of the centre so restrictive that it would be of no benefit or advantage to them.

The residents are very concerned about the real intention of Hyde. Is it setting conditions to which no well regarded not-for-profit organisation could agree? Under these conditions, the centre could not be made financially viable. The Kennington Park estate community hall has now been earmarked for closure and demolition to allow for the building of new homes. Now, we might have said, “Great—new homes!”, but nearly all of them are designed for sale or private shared ownership.

The consultation with all residents of the estates who have a stake in the future of their community centre has been very poor indeed. All past and present members of households on the Kennington Park estate, and potential future users of the centre, are entitled to be asked what they think, but that did not happen. Hyde seemed to think that it was the tenant and resident association’s responsibility to carry out the consultation, but of course the consultation should have gone much wider than the immediate area beside the community centre, because the centre is used by many people from all around the area. It was a shoddy consultation. Hyde put out some questions and answers to residents, saying that it owned and managed these community centres, and that the cost was becoming too much. It tried to blame the Government’s 1% rent reduction for social housing, saying that it meant that it

“has to make cost savings and has had to review all…services”.

The Minister may be surprised to know that, despite residents not liking the 1% rent reduction for social housing and how it might work, they are not blaming it at all. It is misleading, inaccurate and inappropriate for Hyde to claim that it subsidises the running costs because, of course, income from the tenants’ rents contributes to the maintenance of services such as community centres.

Hyde also said that as a housing provider, it needed to

“make efficient use of its income to ensure we are able to prioritise building more homes to help address the housing crisis”, which meant it had to make difficult choices about what additional services it continued to fund and what it stopped.

The residents strongly feel that any responsible landlord is required to prioritise delivery of an acceptable standard of landlord services to its existing tenants first. It is a matter of real concern and great disappointment to residents, local councillors and myself that Hyde only too clearly puts the funding of new build above its duty and responsibility to deliver to an acceptable standard the full range of landlord services as required by law.

Of course, people have found out about what is happening, and it is clear that the community is against it. As I mentioned, Hyde asserts that it cannot afford to run the Kennington Park estate centre, in particular, or the Stockwell centre, yet HSH’s accounts show a surplus for 2015-16 of over £2 million, and revenue reserves of £46,136,000. I mentioned at the beginning the commitments made when the transfers took place: any surplus money that HSH makes will remain within HSH and will not be shared with any other part of Hyde—that was the promise. In other words, the surpluses and reserves should first be reinvested in HSH and should not just be given over to the Hyde Group to build new housing for sale on the Kennington Park estate while the community centre is not replaced.

Hyde’s argument as regards the review of the community centre is that it needs to prioritise building homes. Of course, building homes is a priority for all of us; we know that more than anyone in the borough of Lambeth, where the housing waiting list is huge. However, capital funding for new homes is not the same as the revenue generated from the rents. The Kennington Park Estate Tenants’ and Residents’ Association has worked out that the revenue generated from the rents does cover the £22,500 subsidy that was provided to keep the centre open and running. That is less than 2% of HSH’s 2015-16 surplus, which, incidentally, is linked to a time when the community centre was often closed, and the income was at its potentially lowest level, due to Hyde’s indecision, incompetence and bad management.

There is real shock that Hyde, after what it promised, and given how well it worked with local residents in the early stages, has now decided to go down this route. Hyde Housing is failing not just on the community centres, but on many fronts, from service charges, which one tenant leader has said are in chaos, to day-to-day maintenance, parking charges and pushing new housing into totally inadequate spaces, such as in the case of Birrell House.

One of my constituents has given me permission to quote from his letter to Hyde about service charges. This is typical of the way Hyde works—it is completely non-transparent. The service charges for the coming year are based on estimates from so-called actual costs, details of which have never actually been sent to the residents. Residents have therefore been sent service charges for this year without any real proof of how the service charges for last year were spent. This resident, who has had long-standing discussions with Hyde, said to me, and in his letter to Hyde, that he first requested the accounts and receipts for 2013-14. He says:

“This took over a year to finally arrive in October 2015 before we were able to examine them. To this date we still have issues that were raised with those that remain unresolved by Hyde.”

Following on from that, he requested the 2014-15 accounts and receipts. Those took Hyde—this was slightly better—well over six months to finally provide. After my constituent went through those, there were numerous things that were obviously incorrect, and lots of invoices were not there or had not been identified by Hyde. After a number of exchanges—my constituent dealt with 17 different people in Hyde in trying to get this information—he finally got a comprehensive spreadsheet detailing the many issues, cross-referenced to the invoicing scheme, and he has gone through it in great detail.

Hyde has continually given estimates for the service charge up until the end of the year. It then issues a notice giving the difference between the estimates and the actual charge, and requesting the difference. My constituent fails to understand, as I do, how Hyde can give the actual sums yet be unable to provide the accounts and receipts from which they must have been derived. Why does it take a housing association with that scale of money behind it between six months and a year to obtain these accounts? Hyde is genuinely failing to respond in a timely and professional fashion. Indeed, some tenants feel that it has been using bully-boy tactics to demand payment when they are, quite understandably, still waiting to get the real facts before they pay. People have tried to resolve these issues in good faith, and this has been going on for a very long time. My constituent ends by saying:

“It would be nice to deal with a company that was above board and accountable to its fee paying residents without all this aggravation, and did not have to waste our time or theirs.”

Arden House, three tower blocks on the Grantham Road estate near Stockwell, was transferred, again, in 1999. The boiler refurbishments outside and within all dwellings, plus boiler upgrades, were supposed to be guaranteed for 30 years. Arden House’s boiler room is situated at the top of the building and houses two commercial boilers supplying communal heating and hot water to all dwellings. All the residents pay for these services through their service charges. In October 2015, the boilers failed. The residents went without heating and hot water services for 11 days. Finally, they got the service restored, and, after a long time, got some refunds for the time they went without.

In October 2016, the boilers failed again. The residents were advised that one boiler was working and the other needed parts. The contractors were called in and restored the system; then the boilers went off again. Since then, the residents have had heating and hot water services on and off; a few days later on again, then off; and then back on for a few days and off again. There are lots of accounts of night-time call-outs being made to Hyde’s contractors. They come to restart the boilers, but then the boilers go off again. This is all, of course, at the residents’ own expense in ringing up, and there is a general feeling of their not being able to get through to people. Boiler parts have been ordered and fitted, but the problem is still not solved.

A new local Hyde manager has recently been appointed. I am not putting any blame on him, because he has inherited a difficult situation. He, too, has been chasing the contractors. The residents have suggested bringing in somebody qualified from outside who actually knows what is going on, because it seems that no one within Hyde’s contractors has really got to the bottom of what is wrong. Residents have had to pay full charges for this service for five months, but they have received less than half a service. Now Hyde is saying that it wants to look at an expensive replacement boiler that will be metered into each dwelling, costing residents even more money, yet it cannot even maintain what is there is now. The residents believe that the situation is totally unacceptable and disgraceful. Joyce Hopper from the Arden House community group says:

“Hyde Housing should hang their heads in shame. Will someone please intervene and get our Heating and Hot water services restored once and for all?”

I turn to another issue. This might seem trivial to some people, but on the Stockwell Gardens west estate, there is a problem with estate parking. Hyde is trying to charge £90 a year for parking on its estates in Lambeth. While that is slightly less than what Lambeth Council charges for permits for street parking, the council charges residents on its estates £31.79 a year, which is considerably less than £90. There have been months of discussions and work to try to get the amount fixed at what can be seen as a reasonable compromise. Hyde argues that the money from the collection of permits goes towards maintaining roads on the estate, but local councillors have seen invoices showing that that is not true. It seems that Hyde wants to make money in whatever way it can, as quickly as possible.

Hyde is also trying to build on the Birrell House site, as I mentioned. That would be bad in any event, because it is the wrong place and residents who have lived there for many years will lose all sorts of facilities, but it would not be so bad if it was going to involve affordable housing. However, the site will be a huge development for sale that it will not be possible to use for affordable housing.

I supported the residents when they wanted Hyde to take over, because they had not been getting a great service. Hyde managed the estate during the competitive tendering process, and the arrangement worked so well that the residents asked whether Hyde could take over, which Lambeth agreed to. While things started off well, Hyde no longer seems to be interested in the residents and tenants, particularly the longer-term ones.

Hyde is interested in getting more housing, but not necessarily affordable housing. An organisation that has done quite a lot of work on the detail of what has been happening at Hyde shows us that Hyde is using community centres as assets. The question is not whether the community centres are affordable, but whether Hyde wants to give them any priority—it has clearly decided that it does not. Hyde’s bosses claim that the money that it makes from its for-profit activities will ultimately benefit the rest of the group, but it no longer seems to be worried about the effect on long-term residents.

Hyde’s board has become incredibly corporate. Members may well know the chief executive, Elaine Bailey, who spent 12 years at Serco before she joined Hyde. She is quite used to scandal from those days, and I suspect that she will be seeing a bit more. In 2013 she had to defend her former company over accusations that it had overcharged the Government for criminal tagging, meaning that it faced a £68.5 million bill. It also took some flak for its involvement in immigration centres. I could go through a whole list of things, but I suppose that that would not really be fair to her although, at the same time, we can see why residents do not have huge faith in her.

The chairman of the Hyde group ran the online retailer Net-a-Porter, and before that he was an investment banker, as were two of his colleagues. There is a corporate lawyer on the board, as well as senior people who formerly worked for BT and the weapons manufacturer BAE Systems, and a chartered surveyor who has worked extensively in private sector housing development. Rounding off the board is the former boss of the G4S prisons and justice division, which has a record similar to Serco’s.

Charitable status and the absence of shareholders are not guarantees that an organisation will be run for more than money. Hyde is actively pursuing a strategy that puts corporate success over the concerns of its residents. Financial analysis carried out by Corporate Watch has brought out some quite “dodgy” things, about which I think the Minister should be concerned over the long term. The chief executive’s salary went up from £189,000 in 2015 to £242,000 in 2016. That is somewhat more than most of the residents—and, indeed, most of us in this House—earn. Why are these people paying themselves such large sums of money when they cannot even get basic repairs done for their residents?

For those of us who wanted this to happen, and who did our best to make it work in the interests of residents, the most upsetting thing is the very cynical ethos that Hyde has adopted. It has lost its bottom-up, tenant-led housing service, which was based on tenant involvement and support. It has become hugely corporate, and it puts corporate success above providing services to its residents.

I want to probe the Minister about what more local councillors, the local council and the Government can do to make Hyde Housing abide by its commitments and retain the community services about which promises were made. Surely it must be possible to make Hyde honour those promises, which were in a legal document, without councils and residents having to go to court and spend lots of money. Hyde must be held to account, and the Government must be able to put some pressure on the top people. This situation is not happening only in Lambeth. Since knowledge of this Adjournment debate has been in the public domain, I have had lots of letters and emails about the activities of Hyde Housing in other areas, so there is clearly real concern. If Hyde gets away with this, it sends out a green light to every other housing association—

Photo of Lindsay Hoyle Lindsay Hoyle Chair, Panel of Chairs, Deputy Speaker and Chairman of Ways and Means, Chair, Panel of Chairs, Chairman of Ways and Means

Order. This is not a problem—it is up to the hon. Lady when to finish—but may I point out that there are only eight minutes left for the Minister?

Photo of Kate Hoey Kate Hoey Labour, Vauxhall

I will finish by saying that those questions have arisen, as I think the Minister understands, and I just want to make sure that the tenants and residents really feel that somebody somewhere is listening to them and doing something about Hyde’s appalling services.

Photo of Gavin Barwell Gavin Barwell Minister of State (Department for Communities and Local Government) (Housing, Planning and London) 7:45 pm, 29th March 2017

I congratulate Kate Hoey not just on securing this debate, but on the eloquence with which she has set out her constituents’ concerns. I assure her that the House has listened very carefully to what she has said about the situation her constituents are experiencing. I was pleased to hear of the initial improvements that Hyde delivered after the transfers, and I was very disappointed to hear that those improvements have ebbed away. I anticipated that the hon. Lady would focus primarily on the issues in relation to the two community centres, but she raised much wider concerns about some of the basic landlord services that her constituents are experiencing.

The hon. Lady will be aware of the Government’s view, which is that housing associations are part of the private sector. They are not state institutions under the Government’s control, so there are limits to how much I can say to reassure her. It is worth pointing out—in fact, it is important to point out, thinking back to one of the quotes she read from a letter sent to her by a constituent—that housing associations are not profit-making companies. They have clear values of helping people in real housing need, and it is very important that as they become much more commercial organisations, raising finance from the private sector to help them to achieve their objectives, they do not lose sight of the core values that lie behind them.

The housing associations currently operating in this country broadly fall into three categories: some of them, such as the Peabody Trust, are the original philanthropic organisations set up some time ago; a whole lot of them were set up on the back of “Cathy Come Home”; and more recent ones were often formed as the result of the transfer of local authority homes. However, all of them should have a common set of values, and it is important that they do not lose sight of those values as they become more commercial in the ways they finance the development of housing.

By way of a partial reassurance for the hon. Lady, it is important to say that although housing associations sit outside state control, they should comply with the clear regulatory standards that exist, and some of the issues she raised clearly give rise to concerns in relation to that. At the moment, this association has the highest level of regulatory clearance. I do not know whether she has been in touch with the regulator about some of these issues, but if not, she or Lambeth Council may wish to draw those concerns to the regulator’s attention.

More generally, the points raised by the hon. Lady draw our attention to one of the fundamental challenges that confronts the housing association sector. This debate is quite timely for me, because my first meeting this morning—it was some hours ago—was with a group of housing associations to discuss the Government’s housing White Paper and the role that they can play in helping to confront the housing crisis in this country at the moment. As a Government, we are very much pushing housing associations to increase the supply of housing and to build the new homes that, as I am sure the hon. Lady agrees, are so desperately needed right across the country, but particularly in this great city that she and I have the privilege to represent in this House. However, there is a tension in ensuring that housing associations, in their efforts to deliver the housing we so desperately need, do not lose sight of their responsibilities in providing services to their existing rental tenants. It is probably worth putting on record a little bit about the scale of what Hyde is doing in that regard. In 2014-15, it built more than 1,000 new homes of various tenures. Its plan is to deliver about 3,000 homes from 2015 to 2018, and a further 3,000 from 2018 to 2020. In terms of supply, it is doing very much what the Government—and, I am sure, the hon. Lady—want it to do with regard to meeting the acute housing need in our city and across the country. Hyde also provides a lot of services to tenants, including financial advice, and jobs and training advice. That is a very important part of its work as a landlord.

Obviously, the core issue of this debate is that relating to the two community centres. As the hon. Lady said, the central Stockwell estate, with just under 2,500 homes, was transferred in 1998-99, and Kennington Park, with about 760 homes, was transferred in 2005. At the core of the hon. Lady’s argument was the suggestion that Hyde has not honoured the promises it made at the time of those transfers. If she believes that to be the case, my main suggestion is that her first port of call should be to make a complaint to the association itself under its complaint procedure. I am sure that she has already done that—she would not have raised the issue in the House if she had not.

If the hon. Lady has exhausted Hyde’s own complaint procedure, the next step is to go to the housing ombudsman, who has responsibility in respect of the honouring of any promises that were given. If that has not happened so far, the hon. Lady might wish to go down that route.

I know the association reasonably well. I have met its chief executive, Elaine Bailey, a number of times. I do not know whether the hon. Lady has tried to get in touch with Elaine directly, but if she has not and she would like my help in facilitating a meeting so that she can raise some of her concerns directly, I would be happy to do so, if that would be of any use.

I am conscious that time is drawing to a close, but from the Government’s point of view, housing associations have an absolutely vital role to play in delivering the new homes that we so desperately need in this country. However, as I have said, it is very important that, alongside delivering those new homes, they also have regard to the services that they provide to their existing tenants. The Government take that very seriously.

The two main ways in which control is exercised is through regulatory standards and the housing ombudsman, with whom people can raise concerns. I encourage the hon. Lady to go down those two paths. She may want to speak to me further about these matters outside the Chamber, and I will certainly use my office in any way I can to try to help her to ensure that she gets the result that her constituents would rightly expect with regard to the services that they receive. I am grateful to her for drawing these issues to my attention.

Question put and agreed to.

House adjourned.