Comment: Transparency – democratic accountability – risk management – do these ‘buzz’ words really mean anything in Dundee?
By Bruce Forbes, director of Angus Housing Association
Following on from a recent story in Scottish Housing News (Scottish Construction Now’s sister publication) about the Hillcrest Group’s proposals for the regeneration of the Ellengowan estate in Dundee, I have had to seriously resist letting my cynicism reach the levels of a World Cup referee watching Neymar falling over in the penalty box.
As a reminder, Hillcrest director of development and new business, David Zwirlein, announced that a planning application had been made to build 130 new social and mid market rented houses by Hillcrest Housing Association and their private landlord subsidiary, Northern Housing Company.
A straightforward good news story, you may think.
Well no, not if you are an Association competing for scarce resources in Dundee to try to progress the “regeneration” of Whitfield – once one of Scotland’s poorest and notoriously deprived areas and where the old Dundee District Council started to “regenerate” or in other words, demolish everything in sight – over 30 years ago.
Unfortunately, I am now old enough to have been involved in Whitfield for all of those 30 odd years and have seen Scottish Office Partnerships, other estate regenerations, government ministers, numerous housing conveners and even Prince Charles’ expertise come and go but my cynicism at decisions that adversely impact on investment in Whitfield has never yet reached its current level.
To understand why, you need to know a little more about the Hillcrest Group’s Ellengowan estate. It was acquired when the Northern Housing Association, unregistered, and effectively a Dundee private landlord, became a part of the Hillcrest “group of companies”. Re-branded Northern Housing Company, its near 200 houses in Ellengowan, well known in Dundee to be extremely high in asbestos content, have been let on a commercial basis to private sector tenants ever since. Presumably acquired after due diligence to identify their future investment needs, it perhaps came as a surprise to Hillcrest’s governing body that after attempting to bring some of the homes up to modern standards, it was discovered that this would not prove to be financially viable.
A big problem, you may think. A question mark, at least, over the failure of your management team to identify and manage a risk? Some tough decisions and possibly a financial hit to your balance sheet which might restrict your future development investment as you sort it out?
Not if you ask your helpful local council officers to bail you out by prioritising public investment to deliver a “regeneration”.
This, of course, is where the issues of transparency and democratic accountability come in to the story.
On 30th October, 2017, all of the other developing Associations in Dundee found out that the development funding in Dundee would be impacted when we first saw the report on the 2018- 23 Strategic Housing Investment Plan approved by the council’s neighbourhood services committee.
Now you may think that the council’s chief executive, would be particularly transparent and tell the elected members about his officers having agreed to include a new regeneration proposal in the SHIP, which actually targets investment at a project to effectively assist a private landlord. At a time when the push is on to deliver the Scottish Government’s target of 50,000 new affordable homes by 2021, there isn’t even a paragraph anywhere that mentions that if the council supports this project there will actually be a net reduction in the number of houses in the city.
In fact, the covering report, while mentioning four other “priority regeneration” areas, Whitfield included, makes no mention of Ellengowan being added to the plan and the detrimental impact this may have on these “priority” areas. The only mention of Ellengowan is tucked away in a tiny line in a table appended to the report.
In January, 2018, at a meeting I attended with senior council officers, I suggested that this omission may have led to a democratic deficit as elected members in other parts of the city had been unaware of the impact of adding the Ellengowan estate on other Dundee communities in need of housing investment. I further suggested that the support of council officers for this “regeneration” without the normal strategic community plans approved by elected members for other parts of the city, or highlighting it as a new “priority” in the SHIP report, seemed a strange omission.
I also put it to them that if any other private landlord had approached the council and suggested the solution proposed by Hillcrest/ Northern Housing Company that they would have been shown the door and told that it was a commercial matter to sort out themselves. The director of city development, Mike Galloway, disagreed with all of these points and stated elected members had been told all they needed to know to make the necessary decisions.
All of which brings us to Hillcrest’s recent planning application. It is for 130 houses – a reduction of around 70 for the city in total. 60 are for social rent, which, with roughly £70,000 of public subsidy each, means the public purse putting in £4.2 million plus any subsidy for building the new mid-market rented units. A not, you may think, inconsiderable sum, and one which I believe, both elected members and the general public are entitled to know the detailed circumstances surrounding it and, with the full facts, decide accordingly if Dundee is getting good value from it.
Ultimately, the question must be this. Is it a good use of public funds to give Hillcrest Group’s private landlord subsidiary, Northern Housing Company, a boost to its balance sheet by presumably transferring the land for building the proposed new social rented houses to Hillcrest Housing Association as well as getting rid of the huge liability of houses riddled with asbestos which they couldn’t raise the funding to retain. In effect, should public money be used to bail out a subsidiary of a Housing Association that is supposed to be covenanting profits back to its charitable parent?
Some might see this as a pretty sweet outcome all round – unless of course you live in Whitfield and the “regeneration” work in your estate moves into a fifth decade of living next to another construction site. And all of this achieved following poor risk management, a lack of transparency and seemingly no local democratic accountability whatsoever.
Our only hope now is that the Scottish Government scrutinise this whole matter in more detail than the officers of Dundee City Council before approving the investment of any public subsidy.
A Dundee City Council spokesperson told Scottish Housing News: “This proposed development formed part of the Strategic Housing Investment Plan (SHIP) 2018-23, which was approved by councillors at the public meeting of the neighbourhood services committee in October 2017.
“The Scottish Government Affordable Housing Investment Programme resource planning assumptions for Dundee makes almost £61m available from 2017/18 to 2021.
“The SHIP is developed through the established process of requesting submissions from and holding meetings with Registered Social Landlords (RSLs) and representatives from Neighbourhood Services and City Development.
“RSLs outline their interest in proposed sites and the planned housing provision. Relevant officers from Neighbourhood Services and City Development evaluate submissions in line with long standing criteria including meeting housing need across the city and contributing to regeneration.”
Hillcrest Group chose not to comment.