Stock Transfer Briefing
This briefing outlines UNISON Scotland's position on housing stock
transfers as well as highlighting some of the problems that have
arisen with previous stock transfers.
to the Scottish Executive, 70% of Scotland's council housing stock currently falls
below their new Scottish Quality Housing Standard (SQHS). This standard has to
be met by all social rented housing by 2015.
councils also have problems investing or even maintaining their existing stock
due to the proportion of their rental income going towards servicing their housing
Additionally public investment in housing is counted
against the Public Sector Borrowing Requirement (PSBR) which the Treasury is keen
to reduce. On the other hand private investment in housing is not attributable
to the PSBR.
Therefore a combination of the new SQHS, council
housing debt and the Treasury's PSBR rules has left councils to consider stock
transfer as the only option to investing in their housing stock.
UNISON Scotland is against housing stock
transfers for a number of reasons including the implications for staff, loss of
democratic accountability, the costs of transfer as well as a reduced choice for
are a number of issues regarding the future employment of housing and associated
staff if a stock transfer goes ahead.
One of the main issues
is deciding which staff get transferred to the new housing body. Normally any
staff who spend 50% or more of their time working for the services which the new
housing body will provide will be transferred. However this raises problems with
some staff working on related areas such as policy, legal, wages and IT. Once
the housing stock has transferred these services may not be required and this
could lead to job losses. There will also be an impact on building staff (DLO's
etc) with regard to maintenance work on the transferred housing stock. Although
some transfers have allowed DLO's to tender for such work there is no guarantee
that they will receive it. In the case of Glasgow the DLO was not successful in
getting the maintenance and repair work it had carried out previously and had
to lay off some apprentices.
There is also a concern about
the terms and conditions of transferred employees. Although TUPE will provide
some protection this is limited and eventually the new employer will want to impose
their own terms. This is already happening in a piecemeal fashion in Glasgow Housing
Related to this is the issue of pensions. While
all council staff have access to the Local Government Pension Scheme this may
not be the case for staff who have transferred to a new housing body. To continue
within the LGPS the new employer must seek, and be granted, admitted body status
and there is no guarantee that this will happen. For instance the new employer
may not be admitted to the scheme, may decide that employer contributions are
not sustainable or may decide – as many private employers have – to replace a
final salary pension scheme with a money purchase scheme. This will have serious
implications on the pension provisions for all transferred staff.
transfer of housing to the private sector is often most dramatically felt in the
relations between trade unions and management. In the case of the GHA there is
a whole different business ethos and attitude towards unions. This has seen policies
and procedures introduced by management without consultation with staff or their
representatives as well as a drastic cut back in facility time. This obviously
has an impact on the ability of union officials to organise staff and carry out
their union duties. The GHA has also initiated a move towards performance related
pay which will obviously have a significant impact on staff.
is also a concern about financial pressures on private housing bodies which has
led to more demolitions in order to reduce the capital costs of repairs. This,
in turn, has led to a need for fewer frontline staff.
There will be a major loss of democratic
accountability within the social rented sector if local councils decide to transfer
their housing stock. Currently council tenants can vote councillors out of office
if they are unhappy with their management of the housing stock. This will not
be the case with the new landlord bodies where tenants will only be able to choose
'tenant representatives' for the management board. These representatives will
normally be a minority of the members of the board.
National Audit Office (in England and Wales) revealed that stock transfers have
turned out to be more expensive than stock retention by local councils. One of
the main reasons for this is that the new landlord bodies cannot borrow money
at the same low rates that local councils can. Also councils are exempt from VAT
with regard to housing investment whereas the new landlord bodies will have to
pay this. There is also the additional costs, and time, of establishing a new
In Glasgow around £100 million extra was allocated
for VAT payments while £13 million was spent on feasibility studies. This is all
extra money that could have went towards repairs and investment.
is also a concern about councils still having to fulfil their statutory responsibilities
for helping the homeless yet having no properties in which to re-house them. For
instance Renfrewshire Council have spent £500,000 on temporary bed and breakfast
accommodation in local hotels but this situation will get worse once all their
housing stock is sold off.
A similar concern exists that
as housing association rents are normally higher than council rents then a shift
of council housing stock to housing associations will see rent rises. This will
lead to higher levels of housing benefit.
The commitment to tenant choice is a charade
unless local authorities are able to act in accordance with the wishes of their
tenants. However telling tenants that they face massive rent rises if they don't
transfer is not providing tenants with a real choice.
England their equivalent of the SQHS (the Decent Homes standard) has been condemned
by MP's in the ODPM (Office of the Deputy Prime Minister) Select Committee as
a 'Trojan Horse by the Government in a dogmatic quest to minimise the proportion
of housing stock managed by local authorities'.
Direct investment via an investment
allowance would allow councils to borrow to invest in their housing stock. It
is the quickest way of getting investment into council homes and, as the Audit
Commission has demonstrated, cheaper for the taxpayer by an average of £1,300
A change in the government's accounting procedures
from using the PSBR to using General Government Financial Deficit (as used by
most other E U countries) would be beneficial. The GGFD excludes public investment
in social rented housing and would therefore allow the government to invest in
UNISON Scotland is also concerned that
housing debts are either paid off or transferred in the case of housing stock
transfer. In the interests of creating a level playing field and providing real
tenant choice UNISON believe that the housing debt burden should similarly be
removed from councils wanting to retain and invest in their housing stock
Further information on housing stock transfers
can be found at:
Executive | Scottish Parliament | Briefings Home