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Response to the Housing Corporation papers:
'Options for Community Housing' and
'Community Training & Enabling'

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Introduction

Broadly speaking, the CCH feels that the 'Options for Community Housing' paper is a significant step forward for the Housing Corporation, and this new strategy could be an encouraging framework on which to build. However, the 'Community Training & Enabling' paper appears to entirely misunderstand the nature of community empowerment and capacity building. For example, the introduction to the paper emphasizes the 'importance of tenants and residents playing key roles in helping to make communities more sustainable', without understanding that it is only members of communities that can make their communities sustainable. Whilst there has been a need for revenue grant funding to support resident control for many years, regrettably, the CCH feels that the 'Community Training & Enabling grant' as it is currently envisaged will not achieve significant improvements for tenants and communities, and runs the risk of wasting significant amounts of taxpayers money.

We welcome Baroness Dean's comment in her foreward that 'models such as housing co-ops, tenant management organisations and community based associations have empowered local people to take control over their homes and neighbourhoods to improve the quality of their lives'. The Housing Corporation has not been so positive about housing co-ops and tenant control for a long time, and we warmly thank Baroness Dean for this support.

We also agree that the strategy should be based on Baroness Dean's principle that 'Residents should be able to choose from these models and have as much or as little control as they want.' The CCH supports all methods of tenant control and empowerment, and we believe that tenants and prospective tenants should be given information on and be in a position to realistically opt for the model of their choice, including the model that we represent - the housing co-operative model.

Currently Housing Corporation regulations create barriers that mean that it is not possible for tenants to establish an ownership housing co-op (either through freehold or leasehold ownership), and there is nothing within the 'Options for Community Housing' which lifts these barriers.

With explicit support from the Housing and Planning Minister Nick Raynsford, at the recent NHF conference, where he publicly stated that he wished to see more housing co-operatives set up, and with many housing practitioners now supporting housing co-ops and tenant control, it is up to the Housing Corporation, the Confederation of Co-operative Housing and others working in partnership to ensure that tenants and prospective tenants are in a realistic position to establish housing co-ops and tenant control, if that is what they want. To do this, the following questions need answers:

  1. how can we ensure that all options, including the ownership housing co-op option, are disseminated to all RSL tenants and prospective RSL tenants?
  2. how do we break RSLs and stock transfer and regeneration programmes down into numbers of properties that all tenants can relate to?
  3. how can we ensure that tenants in stock transfer situations can establish an ownership housing co-op if that is the option they choose?
  4. how can we ensure that tenant empowerment is something that is for all tenants and not just for the few on RSL boards?
  5. how can we ensure that RSL tenants can independently access revenue funding so that they can make choices about their future options?
  6. how can we make use of the wealth of knowledge and experience on tenant control issues that already exists in the housing co-operative movement?
  7. how can we deal with the funding difficulties faced by small-scale community housing co-ops?
  8. how can we clarify how housing co-ops can work in partnership with larger RSLs, and how should those relationships be monitored?

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Building on what has been achieved so far

'The participatory structure below board level is as important as the resident majority in ensuring effective resident control, and the bigger the organisation the more elaborate this has to be to ensure that resident board members do not become isolated.' The OPM report

If we want to 'build on what had been achieved so far', it is necessary that we learn from the successes and failures of the past. Housing Co-operatives are the only model of tenant control that has been in existence for over 25 years in this country, and there are many co-ops that have successfully outlasted their founders by several generations. Similarly, local authority tenants have successfully established over 150 tenant management organizations through the Section 16 grant programme. This programme, a central feature of which is that the grant funding is controlled by tenants, has achieved more through less public expenditure than any other regeneration programme in existence.

Therefore through the housing co-op movement and the Section 16 grant programme, there is already a wealth of experience and knowledge about what makes tenant control work, and the Housing Corporation's new strategy needs to learn from this experience.

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What factors make successful tenant control?

What is it that has made one housing co-operative successful and another a failure? The answers to this question should inform a future tenant control strategy. We would make the following points:

  1. most successful housing co-operatives are small-scale neighbourhood based organisations. Genuine decision-making must be devolved to a number of properties that ordinary people can relate to (perhaps to as few as 50 properties).
  2. simply getting tenants on boards is not enough, even if that board is then tenant controlled. If we are to really get the benefits of tenant control, empowerment must be at 'grass roots' level and the resident control structure built bottom up from that. This was identified by the OPM report. A housing co-op's grass roots structure is based on individual tenant's legal membership rights, on which the co-op's participatory democracy is built. The way in which other tenant control models are built from the bottom up will be vital to the success of tenant control.
  3. many of the successful housing co-operatives have bought services from the dedicated housing co-op service agencies. The way in which these services are provided should become a blueprint for other organisations that want to provide services to tenant controlled organisations, and for other tenant controlled organisation's staffing structures
  4. the reason for setting up tenant and community control is not about providing better housing management. The better housing management that springs from housing co-ops and tenant control is a by-product of the success of the organisation. The reason for encouraging tenant control is about community empowerment, about encouraging self-help and self-responsibility, about tackling social exclusion, about re-enfranchising ordinary people who will have often felt that they have no real stake in society.

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Applying tenant control models

Is there a need for a 'wide range of types of resident control'? At present there are four legal structures available which encompass all possible permutations (see table). Any further options would be very confusing. The difficulty is more how these models can be applied within the current framework and culture of public sector housing.

Legal structures available Mutual membership Non-mutual membership
Tenant ownership Fully Mutual Ownership Co-op Resident Controlled RSLs
Tenant Management Tenant Management Co-op Estate Management Board

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Establishing 'ownership' housing co-ops

Despite Baroness Dean's desire to enable tenants to choose the option that they want, it remains the case that setting up ownership housing co-ops (through outright freehold ownership or leasehold ownership) is next to impossible and the Corporation's work on the resident control strategy has barely addressed the issue. As the paper does point out, the Social Housing Grant regime has been designed for large RSLs and we welcome proposals to develop an enhanced grant regime for small RSLs.

Throughout the CCH's discussions with the Corporation, it was clear that the Corporation encouraged the CCH to consider an approach whereby ownership co-ops leased their properties from larger RSLs until such time as conditions could be met for the co-op's registration. This is the route developed by Redditch Co-op Homes, promoted as a model of good practice by the consultation paper, an approach that the regional Housing Corporation supported from the outset of the project. Regrettably, it now appears that the Corporation refuses to enable Redditch Co-operative Homes to lease properties to the constituent housing co-ops because they are not registered as RSLs and the whole scheme may be in jeopardy.

Alongside this, the Corporation has been less than clear about whether it allow housing co-ops to become RSLs at all, and certainly the Corporation's criteria for board membership would eliminate the possibility of setting up housing co-ops. Similarly, 'asset base' and 'track record of management' criteria would prevent the establishment of any new housing co-ops.

Baroness Dean has clearly stated that she wishes tenants to be able to choose the option they want. However, in Redditch, 115 tenants have clearly opted for the housing co-op option and yet the Corporation are preventing those tenants from pursuing the option of their choice. If the Corporation is to be taken at all seriously by tenants as an organisation that has anything to offer the agenda of community empowerment, it needs to urgently address these issues without any further equivocation. Either the Corporation must be prepared to find a tenant-friendly method by which new ownership co-ops can be registered or it must enable larger RSLs to lease to tenant controlled non-RSLs. Until this is done, none of the Corporation's strategy can move forward, because the Corporation will not be offering tenants a full range of options.

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Existing & prospective RSL tenants

We would like to see the Housing Corporation working in partnership with ourselves and others to make housing co-op and other tenant control options possible for tenants and prospective tenants in the RSL sector.

Regrettably within many RSLs there is a mountain to climb in terms of promoting tenant control options. In response to the Corporation's tenant control strategy document, we have heard disturbing stories of RSLs paying tenant activists from other sectors to dissuade tenants from investigating tenant control options. Other RSLs have adopted a head in the sand approach - if the Corporation wants to do this let them get on with it, but we won't help or hinder it. These RSLs are solely motivated by the public sector grant funding that they can raise and have been quite happy to preside over the transformation of public sector housing into welfare housing with the significant social problems that that has created. Such RSLs are dinosaurs that should be consigned to history, and we look forward to seeing Baroness Dean walking over their dead bodies!

Throughout the 'advisory group' process, the Corporation expressed concern about how to bring these RSLs along with the new strategy. Regrettably, we do not believe that this will be possible on a voluntary basis. There are too many vested interests at stake and the culture of RSLs relies too heavily on their accepted way of doing things. The Corporation (and probably more importantly the government) must take a clear and unambiguous position that a paternalistic approach will no longer be tolerated and that those organisations that take such an approach will receive no further state support.

Fortunately, there are a few RSLs that have more vision and are willing to look towards building real empowered communities and the Corporation needs to encourage and support these RSLs.

We have already made a number of proposals in our 'Tenants Taking Control' document, but we would re-iterate the following:

  1. Cut off the tap for the dinosaurs! Accept no further ADP bids unless the bid has clear plans about how the development will be tenant or community controlled. Let's send a straightforward signal that approaches that are not community-led will not receive any public money.
  2. Baroness Dean expressed concern at the CCH conference that it is not possible to make 'supported housing' tenant controlled. While 'supported housing' would bring with it its own particular problems in relation to tenant control, we do not think it should be assumed that those who live in supported housing would not want elements of control over their lives. For example, a recent report on provision of housing for the elderly in Europe concluded that a major contributory factor on quality of life for the elderly is the amount of control they have over their environment.
  3. Work in partnership with the CCH to develop a tenant control best practice unit, which would disseminate information about how to support tenant control in RSLs
  4. Start finding ways to target RSL tenants about issues to do with tenant control. Work in partnership with the CCH and others to organise regional 'Tenant Control Seminars' to promote tenant control to RSL tenants.
  5. Develop a 'Tenant Options Studies' programme, whereby independent agencies work with RSL residents. Ensure that housing co-ops and tenant control are options that are considered as part of 'Tenant Options Studies'
  6. Develop 'enhanced' grant rates for small RSLs.
  7. Change the culture of RSLs by developing accountable RSL boards. All RSL board members should be subject to tenant elections. Ensure that RSL tenant board members are involved (independently if necessary) in all appointments of senior RSL staff and all development & financial decisions. Give RSL tenant board members access to independent advice if necessary. Introduce a requirement that any RSL representative attending conferences must be accompanied by at least one tenant from the RSL.

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Stock transfer and regeneration programmes

Stock transfer and regeneration programmes are a key area that should be providing the basis on which to build tenant and community control, through housing co-ops and other methods of tenant control. It is vital for long-term sustainability that if major expenditure is planned that there is a guaranteed method of safeguarding expenditure.

The only way to safeguard expenditure is to ensure that the local community becomes empowered to become the guardians and trustees of the regeneration programme. The greatest possible number of residents must become genuinely engaged and lead the process of regeneration, so that they will take on the responsibility of stewardship in the future.

Unfortunately current regeneration models have a low definition of success in the area of community empowerment. One Housing Action Trust that is portrayed as a model of regeneration claims that there are 600 out of their 11,000 residents involved in the regeneration process and that this is a measure of its success. Even if there were 600 residents involved, this would only represent 5% of the local population, and there is a need for significantly more residents to become actively engaged if problems of alienation and social exclusion are to be combatted.

With the New Deal for Communities programme, trumpeted as a model of ensuring local community control of the regeneration process, we are hearing disturbing stories of how once again the local community's wishes are being ignored and the decisions about how the regeneration will go forward are being taken by the professional outsiders.

In both of these cases, despite them being touted as flagship regeneration programmes, they will not be sustainable without the active involvement of the community. When the regeneration project leaves, the neighbourhoods will not have overcome the stigma and alienation that characterised them before and more money will be required in 10, 15 or 20 years time. What a tragic waste of public resources!

Compare this to the successes of the housing co-op model. While it will vary from co-op to co-op, we estimate that an average of between a quarter to a half of co-op members are actively involved, with many more engaged and feeling a responsibility to the co-op. In the Redditch Co-op Homes model, 80 out of 115 prospective tenants are regularly attending training sessions on the project. They feel they own the project and they will take the responsibility for their homes once they are built.

There is no inherent difference between co-op tenants and tenants in stock transfer or regeneration programmes. Co-op tenants come from local authority or other waiting lists in the same way as any RSL. If we were to get even a quarter of the residents of stock transfer and regeneration programmes to be become actively engaged in decision-making processes, imagine the enormous impact that this would have. This is not a pipedream. It can be done if the will and the resources are there to do it.

The difference is that co-op tenants make real decisions about their homes and environment. Co-op tenants are brought into the process right at the start of the process, and are the people who make all the decisions. The local neighbourhood nature of the project allows ordinary people to feel an ownership of what is being developed in a way that regeneration over 2,000 plus properties does not.

Conversely, the whole approach to stock transfer and regeneration is wrong. The major decisions about stock transfer are usually taken well before residents are brought into the process, and once local residents are asked for their views, the regeneration process is like an express train from which housing staff wave to residents on the platform as they pass by.

There should be no discussions regarding stock transfer or regeneration until there are active and informed residents organisations who can be leading players in the process. This does not mean a handful of residents from whom a few are selected to go onto a shadow board. It means that there must be a genuine engagement right down to street level, at a level which ordinary people can relate to. This needs to happen before any discussions take place about possible stock transfer or regeneration.

We propose the 'bottom-up' approach outlined overleaf. This approach is not going to be easy or cheap in the short term. However, we would argue that any approach that does not engage with residents at a truly neighbourhood level will fail and will be more expensive for the taxpayer in the long term.

This approach will require that the Housing Corporation and the DETR work together to develop empowerment through 'Tenant Options Studies'. Theoretically this should not be in the remit of the Corporation because it should be happening while the properties remain in the ownership of the local authority. However, given the Corporation's ambition to see resident and community control emerging through stock transfer and regeneration programmes, it would seem suitable that the Corporation should take a lead in the area.

The model being currently investigated by Birmingham City Council for stock transfer - the development of an overall RSL land trust, with 15 tenant controlled neighbourhood management organisations - appears to be far ahead of any other stock transfer proposal. However, each of these organisations will still be about 6000 properties and we would like to see the stock broken down still further to enable genuine tenant empowerment.

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A step-by-step guide to creating housing co-ops & tenant control through stock transfer and regeneration

  1. The local authority decides strategically that the only way to bring in resources is to either through transferring stock out of local authority ownership, or through a regeneration scheme.
  2. Local authority tenant participation staff discuss the proposal with residents in the area concerned and/or with borough-wide tenants representatives.
  3. In conjunction the local authority tenant participation staff and local residents sub-divide the area into smaller areas that local residents can relate to - perhaps no more than 50 properties in some cases.
  4. A six-month Section 16 Tenant Options Study is commissioned either across the whole area or independently in each area. The purpose of the Tenant Options Study is to develop tenant and resident involvement in each of the areas with an independent agency chosen by local residents. The Tenant Options Study should ask local residents to investigate options for their housing if the ownership of the properties is to be transferred out of local authority ownership. The options given to local residents should extend from the them having very little involvement right through to the establishment of a housing co-op.
  5. A local ballot should take place to ensure that the views of the active local residents are supported by all tenants. This ballot should take place prior to the statutorily required ballot that is necessary to transfer properties out of local authority control. The ballot should be taken again once every three years to ensure that residents still support the model they chose originally.
  6. Only once the local residents have some idea of how they want to proceed, and once there is some sort of local resident representative infrastructure should discussions start happening about ownership of the stock or about bringing in the regeneration machine.
  7. These discussions should be entirely tenant and resident led on a neighbourhood by neighbourhood basis. It is not adequate for the local authority to discuss these issues only with borough wide tenant representative bodies. There is a need for the discussions to reach right into each community.
  8. Over a sufficient period of time for local residents to engage with the process, proposals should be drawn up regarding how the overall stock transfer or regeneration should take place.
  9. Ownership of the properties in the stock transfer or regeneration programme should start on the basis that a 'land trust' owns the land and leases the properties on a long lease to neighbourhood vehicles whose structures are determined by local residents. The 'land trust' should be controlled by something akin to the current 'third:third:third' model, and should be registered as an RSL.
  10. Ownership should be on the basis that full freehold ownership can pass to the neighbourhood vehicles under certain financial and other managerial conditions. Methods should be established whereby the neighbourhood vehicles can become RSLs themselves if that is what tenants want.
  11. If freehold ownership does not pass to the local neighbourhood vehicles, the 'land trust' could be sub-divided into geographical areas that could also take ownership of land for other public sector housing, privately owned homes and land which is not used for housing. This would encourage the development of substantial locally controlled community assets.
  12. The 'land trust' could consider engaging with other public sector organisations working in the area and possibly providing the basis for mutual homeownership organisations in the area.
  13. A secondary agency should also be established from which the local neighbourhood vehicles can buy services, in much the same way that housing co-ops currently buy services from secondary co-ops. This secondary agency should be user controlled, in that it should have representatives from each of the areas of the stock transfer or regeneration area.
  14. In time, the local neighbourhood vehicles should be able to buy services from other organisations if that is what they want.

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Promoting tenant control to Local Authorities

Our experience suggests that local authorities' responses to tenant control initiatives are mixed. Some local authorities have seen tenant management as a threat, and have found the need to develop local financial budgets difficult. This has sometimes meant that local authorities have not been supportive to tenants who want to develop tenant control, and there are too many cases of local authorities being deliberately obstructive.

On the other hand, best value and the tenant participation compact regimes have acted as a catalyst for change within many local authority housing departments, and it is not uncommon to see tenant participation officers actively supporting tenant control options.

However, there are still difficulties in terms of a perceived lack of Housing Corporation support for tenant controlled solutions, especially for Housing Co-ops, and for support for tenant control frameworks.

Once again, we would like to see an approach that supports the innovative and tenant-control friendly authorities and that penalises the 'dinosaurs'!

We would re-iterate the following specific proposals (many of which will involve the Corporation working closely in partnership with the DETR to implement them):.

  1. Again, let's send a clear and unequivocal signal to local authorities that they should only support ADP bids that have clear plans about how they will be tenant and community controlled.
  2. Local authorities should be encouraged to work in partnership only with RSLs that make tenant control a central plank of their strategies.
  3. Local authorities need to reconsider the way in which allocations are made. Community involvement should become a key part of the allocations process and used as a means to develop balanced communities.
  4. The Corporation should disseminate models of tenant control to local authorities in partnership with the CCH and others.
  5. The DETR and the Corporation should work together to ensure that tenant control options become available through stock transfer and regeneration programmes. The DETR should only support stock transfer and regeneration programmes if they are tenant-led and neighbourhood based.

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'Community Training & Enabling' grant

We think that an equivalent Section 16 funding framework should mirror the DETR equivalent as closely as possible. We see no reason why grants available to tenants of local authority housing should not also be available to tenants in the RSL sector.

The essential features of the Section 16 DETR grant that have enabled the setting up of many successful organisations have been:

  1. it is a grant that is independently accessed by tenants groups under certain criteria. The landlord cannot apply for the grant. Making an RSL equivalent grant available to RSL landlords will entirely miss the point of the empowering nature of the programme and runs the risk of being a significant waste of public money.
  2. in all cases the tenants group has the ability to choose the consultants they want to work with.
  3. the grant now ranges from the wider approach through Tenant Options studies and the Capacity Building programme to the specific tenant management framework. The RSL equivalent must include funding for tenant option studies and an equivalent of the tenant management framework.
  4. the tenant options and tenant management framework contain a number of housing options that the agency has to disseminate to the tenants group, and the tenant's group has to consider these options. For RSLs, these options should include setting up ownership housing co-ops.
  5. the grant is not designed to support activities that are the landlord's responsibility anyway. Everything listed under Section 5.2 of the Community Training and Enabling paper is core work that the RSL should be doing anyway as much as they should be doing rent control work. It would be an irresponsible use of tax-payers money to suggest that an equivalent section 16 grant should be funding core work.
  6. the grant is not discretionary - there are criteria that must be met in order to receive grant funding. Making these grants discretionary is likely to lead to a significant waste of taxpayer's money. The Housing Corporation has only recently started looking at tenant empowerment issues. As yet, it does not have experience and knowledge in this area. Therefore it is vital that there is a tight framework about how these grants will be spent.

The following elements of grant should be made available to tenants:

Tenant Options Studies

'Tenant Options Studies' are programmes where an agency works with residents in a neighbourhood over a period of 6 months to:

  1. examine what the problems are in the neighbourhood.
  2. build tenant awareness and involvement of the possibilities available to them.
  3. instigate relationships between residents and bodies that have an effect on the neighbourhood (i.e the landlord, the police, local schools etc).
  4. go through possible options for solving problems, including the options relating to resident involvement and control of their homes.
  5. develop an action plan that is broadly supported by residents that residents can take forward.

The 'Tenant Options Study' approach is particularly useful where there is no prior active resident involvement and it is a process by which residents themselves can determine their own priorities independently. 'Tenant Options Studies' are not about actually doing things for residents, but they are about being a catalyst for resident involvement. Amongst many other things, they would be an effective tool for disseminating options for resident control.

Capacity Building Grant

Capacity Building Grant has been used by the DETR as a grant to fund general training and information courses for tenants at the National Tenants Resource Centre in Chester. It would seem appropriate that the Corporation should similarly fund tenants to attend such courses.

Currently there is only a small element of the Capacity Building Grant that funds tenants to follow up issues raised at the NTRC in their own neighbourhoods. We have argued that there needs to be a more comprehensive way in which capacity building grant is delivered locally, because it is vital that these grants get through to the people who are unlikely to travel to Chester. However, making the capacity building grant programme more local raises questions about how tenants are accountable to other tenants in their neighbourhood, and to the funding body.

Tenant Management Grants

It is obviously vital that grants are made available to RSL tenants to establish tenant management and tenant controlled organisations. A similar framework to the 'Right to Manage' framework should be established for RSL tenants. As you have pointed out, the environment in which the Corporation is operating is slightly different, but we feel that the only significant differences to an equivalent RSL programme should be:

  1. the programme will not be operating within the legal section 16 framework.
  2. tenant management grants should be extended to allow for tenants wanting to establish either Resident Controlled Housing Associations or ownership Housing Co-ops.

We have already proposed the following framework to the Housing Corporation, and we look forward to the Corporation responding to these proposals: [View table of proposals]

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Reviewing the new strategies

It would appear that the only way in which the new resident control strategies will be monitored is through a six-monthly meeting of the advisory group that was set up to consider resident control. Obviously this is not enough. The Corporation has only recently started to consider tenant control a serious option, and clearly it does not have staff who understand how tenant control works. Therefore the Corporation will be unable to monitor the strategies themselves. Furthermore, if the Community Training & Enabling Grant is not monitored very closely on a month by month basis, we are seriously concerned that vast quantities of taxpayers money could be poured down a black hole!

We propose that the advisory group starts to meet monthly and is given full reports by the Corporation on all tenant controlled projects being set up, and all applications for Community Training & Enabling.

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