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We move now to our witnesses from Berwickshire Housing Association. I welcome you warmly to the meeting. Thank you for taking the trouble to come and for your submissions. We are keen to pursue a number of issues with you, as you will know if you have read any of our deliberations. I hand over to you to give a brief introduction.
I am Alick Hay, convener of the management committee of the Berwickshire Housing Association. Philip Jones is the chief executive. George Finlay is vice-convener and was chairman of the housing committee of Berwickshire District Council before the transfer. Michael Calvert is a tenant member of the committee. Members will have received the papers from us. I hope not to go over too much of what is in them.
Thank you. Your introduction was very impressive, as was your written submission. You will know that the committee is considering the process of housing transfers. We have especially focused on large-scale ones. You have experience of that. Will you summarise the positives and negatives of your experience?
We all have positives and negatives from this exercise. The overriding positive is that it gives a new focus on consultation with tenants and tenants services. There is no way that any transfer proposal will be successful in a ballot unless you can demonstrate to tenants that what you are offering them is better than the prospect that they face with the council. As most councils try to do their best for tenants, it is important to focus on the condition of stock and types of services that tenants want. Having started off on that footing, there is no going back. You cannot have a transfer and then say, "We are not going to consult you any more." The tenants' expectations have been built up and they must be met.
Would you make any recommendations to others going through this process?
A lot of our experience has been put into the guidance that has now appeared. The overriding point is not to think that you can produce a magic solution that you can sell to tenants. There must be an understanding of the different directions that are available to a council and you must be ready to go down a specific direction, and say that this is the direction that you want to recommend to tenants. At that point, you must open it up to tenants and get their views on the way forward.
What level of service do you provide for tenants?
That is a general question. In comparison with the district council, we have a stronger local presence than it had. Berwickshire covers about 350 square miles and we have houses in 29 communities. We have local offices for services in the three largest communities, which are Eyemouth, Duns and Coldstream. Those offices offer comprehensive services, so a tenant from any of our houses, whether or not it is a house that is nominally served by that local office, can go into any of the offices to find out information about their house, order a repair or take out a transfer application. From a day-to-day service point of view, that is probably what tenants have found most noticeable, because we are more accessible than the old system as the council only had rent offices in two of those places.
We will probe some of those issues later. Who monitors the service?
Apart from the tenants?
Yes. Is that your method, monitoring by the tenants?
It is obviously the most important one. When a satisfaction slip comes back saying that the tenant is not satisfied, there is an investigation into what happened and there is a report to the management committee as to what happened. We take that extremely seriously.
Are you satisfied with the monitoring from Scottish Homes and the financiers?
Yes, I think it works. I dare say that we could talk about tweaks here and there, but it works.
Have they helped you to develop your service?
The most help that we get from Scottish Homes is through the setting of performance standards that we have to meet. That gives us a good framework within which to operate. The quarterly monitoring by Bradford & Bingley is very useful; it is informal but rigorous. They pick up on everything that is in the report.
Is there anything that the committee should keep its eye on in relation to monitoring of the transfer process?
I am biased on this, because providers want to be unmonitored. I do not feel that there are huge deficiencies in the monitoring processes.
The committee has heard evidence from tenants in Glasgow who feel that they will be excluded from the transfer process. In your experience, how were tenants involved in the transfer process and what impact did they have? Can you give examples of where their input was important to the transfer process?
I will give the official BHA view, from the perspective of what we were trying to achieve through the consultation. Michael Calvert will also comment because he was not involved with the BHA at that point; he has come on board since then. He might like to comment on what it felt like to be on the receiving end.
As a tenant, I got lots of stuff through the post, and I had people knocking on the door who wanted to consult me. I felt that I was kept well informed of what was going on; for the first time since I became a tenant, I felt that my opinion was being sought. My neighbours would agree with that.
Now that the transfer process is complete, how do you ensure that tenants continue to be involved in the decision-making process? In your opening statement, you indicated that a minimum of four tenants sit as members of the board, but how do you ensure that it is not always the same people who are involved, and that all tenants are aware of what you are doing and are genuinely involved—if that is what they want—in the decision-making process?
We have a quarterly newsletter to keep tenants informed of what is going on. I have my doubts as to whether anyone reads it, because I have had a gentleman in my office who was a tenant of the housing association and he did not know that I was convener. So I do not know whether tenants read it or not.
We have found that tenants are not—or they do not seem to be—interested in forming local tenants associations in Berwickshire. I do not know whether that is because we have not yet found the right way of encouraging them, or whether it is because there is already a strong community life, and the sort of people who would run a tenants association are probably already involved on the committees of other organisations.
You say that you have had some difficulties with local tenants groups. How would you define a community, and how would you ensure that local communities, as part of the wider housing association, are in a position to take control—should they wish to—of housing issues that are important to them?
You must understand that we have 2,000 houses that are spread over a large number of what, in a rural context, we would term communities. Some of those communities have only eight or nine houses. I would not use the phrase that you used: we have not had difficulties with tenants groups—we have had difficulties in forming tenants groups in the three or four large communities that have around 500 houses. I do not think that that is because of apathy. In specific instances—discussions on rent, for example—tenants have made their views known. I do not think that they would want to be a part of a group that discussed everything, but they like to be consulted on specific issues.
How do you monitor tenant satisfaction? Are there any particular issues on which tenants are not happy with you, or are they generally satisfied? Have tenants noticed a real difference following the transfer?
As Philip Jones said, for routine repairs, we receive tenant satisfaction slips. The committee has asked to be informed about unsatisfactory repairs. All repairs are done by subcontractors, and we want to know if they are not performing as well as they should be.
Is that something that you want to work on in future, to ensure that you monitor tenant satisfaction better?
Yes.
In the very near future.
Mr Calvert, you described your house as it was under a local authority. Were you happy with the quality of the renovations?
The refurbishment was of a high standard. I examined the gas consumption for our central heating and found that we used 25 per cent less gas during the first winter after improvements had been made. The house is much more comfortable.
That was a successful contract—we did 80 houses in 20 weeks. We were pleased with the contract, on which we got a good price.
Mr Finlay, you were convener of housing at the time that the transfer took place.
Yes, I was.
What within the council's housing committee drove the move towards the transfer?
At the time, Berwickshire District Council was aware of changes in the cost floor and the right to buy. The council had built houses throughout its lifetime—it did not stop doing so at any point—not in great numbers, but enough to meet local need. However, when the cost floor was changed, councils were selling relatively new houses under the right to buy at what could amount to a loss. Most councils in Scotland had stopped building, but we needed family housing and were not prepared to punish the tenants who remained after those houses were sold four years down the line at a loss of £16,000, which was accrued to the debt.
I do not have to ask for the view of Berwickshire Housing Association on the proposals, as your view is clear.
It is fair to say that, because of the cutback in resources, the number of renovations was slipping. We were not able to follow programmes which were like those that we had undertaken in the late 1980s.
I should point out that, although I did not use quotation marks in the article, the phrase that the stock was "generally good" came from a survey report produced by Countrywide Surveyors as part of the stock transfer. Countrywide Surveyors said that, of the stock transfers in which it had been involved, the Berwickshire stock was the best. I take on board Mike Watson's point about Mr Calvert's house, but one wonders what the rest were like.
May I butt in to clarify what I said?
I presume that repairs and maintenance were carried out by a direct labour organisation beforehand, when Berwickshire District Council owned the stock.
The council's policy was always to keep local businesses involved in maintenance work as far as possible.
Did Berwickshire District Council have a DLO?
No, never. When we established the housing association, we met local tradesmen and said to them "There will be no change. We will still be using you for the painting work, for general maintenance and repairs." It is important in small communities to keep small businesses of one, two or three men working. It was not in the council's interests suddenly to—
That is fine—basically, the same people who undertook repairs before the transfer continue to do so now, although no DLO was involved.
I think I can fairly say that Berwickshire District Council had one of the meanest, leanest housing departments I have ever come across. The housing department had 10 staff.
That was mean.
It was certainly lean. [Laughter.]
It was also mean.
As one would expect, staff in the finance department also had housing functions. In total, about 18 people were entitled to transfer to the association, if they so wished.
Housing allocation arrangements were mentioned earlier. I do not know your part of Scotland well, and while I do not imagine that homelessness is a major problem there, I presume that problems exist.
Yes. Scottish Borders Council, which is the housing authority now, runs its own assessment and reception service for homeless people and has its own temporary accommodation. When it is satisfied that somebody meets the criteria for priority need, it lets us know. So far, we have been able to rehouse such people.
Are the needs of the homeless being met by your housing association?
The homelessness service in the area went on record a year or two ago to say that they were satisfied with the service that we provide.
Who scrutinised the valuation that was carried out at the time of the stock transfer?
There was a lot of scrutiny of the valuation. Chapman Hendy Associates, the transfer consultants, put together a valuation that was subjected to formal independent scrutiny by the district valuer. That resulted in what one might call a negotiating exercise being undertaken. Berwickshire Housing Association and Berwickshire District Council eventually agreed that there was merit in accepting the district valuer's position. At that point the funders wanted verification and FPDSavills was appointed to conduct a further valuation exercise, which produced different—although not substantially different—results, and which was of sufficient comfort to the funders.
Who scrutinised the value of the arrangement to the public purse? The value of other transactions and set-up costs was more than £1 million and the value of penalties and early redemption was £385,000. That is almost double what you were left with in the development fund. Who scrutinised that and what was included in the other transaction and set-up costs?
The responsibility for that scrutiny lay with the then Scottish Office, which went through a process with the Treasury. Some of the other transaction costs are still revenue for the public purse, for example, because of the amount of stamp duty that is paid. There were expenses for the extensive legal work that was done on the transfer agreement and conveyancing and there was the cost of the transfer consultants.
It might be helpful for the committee if you were to provide us with a breakdown of what was included in the additional costs, as you are the only people who have gone through such a stock transfer.
I am sure that I could dig out the schedule.
That would be useful.
The costs included everybody's costs. When we sat down at the final signing meeting in a lawyers' office in Edinburgh, there were—at one point—15 lawyers sitting round the table. We were paying for them all. Bradford & Bingley Building Society, being an English company, used English and Scottish lawyers. We also used English and Scottish lawyers—one set did the housing association work and the other did the property transaction work. The council used lawyers and we paid for them all.
Therefore, there were more lawyers than there were housing department staff.
The legal fees were horrendous.
I wanted to ask about how you use your development fund, but you seem to be outperforming your original estimates and you are expanding the number of houses that you are building.
The development fund is not quite controlled by Scottish Borders Council, but it must agree with any spending of that fund that we suggest.
Has your business plan performed well?
Yes. We use the development fund as a sort of housing association grant.
I understand that about one third of your rental income is being used to service the private finance deal. Is that amount likely to increase in future? I would like you to answer that question from two perspectives—if there were no changes to the right to buy and if there were.
Our debt is not going down—we are not repaying it. It is increasing and that was our plan. The debt started at £11.5 million and it is proposed that the debt should peak at £20 million at year 15 to year 17 of the programme.
The average over the whole business plan was an increase of 2 per cent.
Expansion of the right to buy would affect the housing association, as there would be a greater burden on fewer rent payers. That would result in additional expense.
We have examined that and the effect of it would be disturbing. It would not—fortunately or unfortunately—affect the financial viability of the housing association. A reserve account is built into the loan agreement. Once a certain number of right-to-buy sales have taken place in a quarter, all the proceeds are put into that reserve account. The funder must then decide whether to release that to the business or use it to repay the debt.
We will follow up by asking more detailed questions about financial calculations.
We have produced a model—I would not say that it is the last word in sophistication, but we will share it with the committee.
I am sure that it would help us.
That would be useful. I gather from your reports that the improvements that you have undertaken are to do with heating, insulation and so on. Was there major work to be caught up with on roofing, the fabric of the buildings and environmental repairs?
We have been lucky regarding roofs—they have not been a significant problem. However, quite a lot of houses—particularly those built in the 1970s—had a problem with roughcast coming off. Some of that had a lot to do with occasionally severe coastal exposure. Those repairs have been a major exercise.
Does your stock include any hard-to-let houses, which are a feature of places such as Glasgow?
I would not describe any of the houses as hard to let. In rural communities, people tend naturally to apply for housing where vacancies are likely to occur. Smaller communities—two, four or six houses—will attract only a small number of applicants for housing. A vacancy will not necessarily result in an immediate let. It takes a bit of time for word to get round.
Can you give us an idea of the level of investment so far in those major improvements to stock?
To date, we have spent about £7 million on such capital improvements, a significant advance on what the council was able to do in latter years. The council was being held to less than £1 million a year. We have managed £7 million in about four and a half years. It is not revolutionary stuff, but it is a major advance on what was there before. Tenants see it as being worth while.
Will your financial programme be able to cover any such future requirements, as well as the bigger, routine, cyclical requirements that you mentioned in your report, for example, the three-yearly repainting?
I come from a local authority background and one of the wonderful things about the stock transfer was the opportunity to look ahead and ask what we will need to do in, say, eight years' time. We could not be exact about it but we had a good idea, and we could start to plan for it, cost it and ensure that the money was there. That is why we have £20 million of facilities. We have drawn down £14 million, because we know that, in future years, expenditure will be needed—that will help us to meet our commitments.
Are you managing to meet your programmes for the routine three-year cycles?
The three-year cycle is no problem; in fact, the time scale is one of the best decisions we took. We are now at the beginning of the third cycle, and the amount of work involved this time round is far less than it used to be on a longer cycle. It is a time scale that is worth advocating as good practice.
As a Glasgow member, I gasp with wonderment—
I was thinking that myself.
I want to pursue the rent guarantee in more detail. Transferring tenants have a rent guarantee, until 2000, of retail price index plus 1.5 per cent. Any tenant who was allocated a tenancy after the transfer date in 1995 has no guarantee.
No. In practice, we have been able to offer them the same rent increase—
So there is no guarantee?
No.
Do those who have been allocated the 60 new properties, whether they are transferring tenants or new tenants, have a guarantee?
The transferring tenants retain the guarantee.
You say in your evidence that the rents of tenants who do not have this guarantee—the new tenants—could be approximately 20 per cent higher.
We had to include that in the business plan, because of the way that the valuation eventually went. We put a premium of 20 per cent on new rents.
You say in your literature that the three apartments can vary from £31.48 a week to £49.41 a week. I take it that that is not related to whether there is a guarantee. However, it would mean that if a new tenant got one of the three apartments at £49.41 a week, they would be paying £10 a week more than anyone else.
They would only pay that rent for one of the new houses that has been provided since transfer. There is no premium for the new houses—the premium only applies to the houses that were transferred.
So a new tenant moving into one of the 60 new houses could pay up to £10 a week more than transferring tenants.
No. They would pay exactly the same rent in that house as a transferring tenant, because—
Where does the 20 per cent come into it?
If it is a re-let of a house that was transferred from the council, then there is a 20 per cent—
So a new tenant would pay up to £10 a week more for a re-let apartment.
That was the intention in the business plan. The idea, as Alick Hay said, was that after the rent guarantee period, we would pay a higher annual rate of increase on the transferring tenants than on the new tenants, because of that 20 per cent premium. They would, on average, pay 2.5 per cent above inflation per year, after the rent guarantee.
So, under this new rent structure, the guarantee given to transferring tenants will eventually disappear and everyone will pay the same.
The guarantee expires at the end of this month.
But even the 2.5 per cent guarantee beyond—
That was not a guarantee; it was just an indication.
So we do not know what people will be paying 10 years from now.
The pressure on rents is such that it is unlikely that RPI plus 2.5 per cent will be tenable in future.
So, in the years ahead, rent increases for your tenants are likely to be well in excess of inflation.
It depends what you mean by well in excess.
I mean 3 per cent or 4 per cent.
I am saying that there is downward pressure.
Councils are being hammered for increases in the council tax of 5 per cent above inflation.
The way that we are going on affordability and so on, there will be downward pressure, so 2.5 per cent is likely to be the maximum.
Can you tell us what level the rents will be constrained to? Will there be an upper limit?
That would not be sensible. The funders would not be happy if our income was artificially capped. However, everybody is conscious that we should have a rent level that people can afford to pay; otherwise, our income drops in another way.
Would not housing benefit take up the slack?
Will it? It is being reviewed. We do not know.
I do not know. That is why I am asking you.
I am not making the decision about housing benefit regulations.
Neither am I, unfortunately.
All I am trying to indicate is that there is a wide range of scenarios. We simply have to plan as best we can. It is not possible to make commitments.
So the guarantee goes to 2000 and not beyond.
It is more simple—there are expert advisers that will do that kind of work. However, we have a qualified accountant who is well able to do that.
Somebody referred to staff who were performing a housing function within the finance department of the local authority. Am I right in saying that they would be the experts who managed the debt?
No. As you rightly identified, the finance post is a crucial one in the stock transfer organisation. We recruited externally for that. Both of our post-holders have come from other housing associations.
So most housing associations, if they go down the stock transfer route, will have to have financial experts who can advise them on how to do this.
Traditional associations manage a portfolio of debt. There is good, inexpensive advice out there.
It is not too expensive?
By comparison with the others.
Or compared to lawyers. [Laughter.]
John McAllion has highlighted that the rent policy seems to be quite a complicated system. Is the fact that new tenants will have to pay 20 per cent more an incentive for people to join your waiting list? Are the tenants generally satisfied with that?
I do not know whether other associations in Scotland operate that policy. However, it has precedents in English stock transfers, although in some cases the premiums went to ridiculous levels. I am unhappy enough with 20 per cent as a premium, but I know that our consultants were working with another association on a transfer where the premium was 38 per cent.
One of your newsletters says that Berwickshire Housing Association is unique in Scotland, as it was the first to become the owner of council housing through large-scale stock transfer. The association is also unique in Scotland in having a policy that means a 20 per cent rent increase for new tenants.
Although I said that I do not know of any other examples, that does not mean that they do not exist.
You maintain that the numbers involved are hardly significant, but it is clearly quite important to the tenants. When the staff transferred, were there any changes in their terms and conditions, or did the Transfer of Undertakings (Protection of Employment) Regulations handle that problem?
Although there is no alternative to following the TUPE regulations, we constructed our own sets of employment terms and conditions which were an enhancement of council terms and conditions but were structured in a way that suited our business better. Nobody who transferred has lost any money; in fact, most people are on rather higher salaries than they would have been if they had stayed with the council. However, you should remember what I said about Berwickshire District Council before we get too carried away about that.
Yes, and I accept that we cannot really make a comparison between the numbers. Have you retained all the staff?
Yes. Although there have been some changes, turnover has been quite low.
Thank you for your evidence, which was extremely helpful. We might follow up one or two points with you, and will probably request details about some of your answers.
Thank you very much for listening to us.
I want to move on swiftly, as is our wont, and welcome representatives from Scottish Homes to the meeting. I have just been checking and I think that Scottish Homes is the only organisation that we have asked back again. You never know—you might become regular visitors to the committee. However, I am sure that you understand why we want to discuss these issues again.
I am Hugh Hall, director of strategy, performance and regulation at Scottish Homes. I have responsibility for community ownerships, the registration supervision department, finance, performance and the Scottish Homes strategy. With me is Rita Stenhouse, head of the community ownership initiatives department, and Carole Oatway, registration supervision director. Although the committee had invited only Rita and me, I thought that it would be useful if Carole came along. We have been following some of the proceedings of the meetings, and concerns have been expressed about some of the regulatory aspects of the process.
One of our great frustrations is that we never have enough time.
As I am the new boy, I will pass that question over to Rita Stenhouse, who has led most of the transfers.
When we started transferring our stock, the environment was very different and the process was not necessarily politically correct. In those days, we were required to do certain things such as seek competition when transferring the stock; however, the situation has now evolved.
What will be the role of Scottish Homes in the proposed transfers?
We have been providing advice and support to councils embarking on the process.
Exactly what services have you been offering them?
We have offered to share our good and bad experiences with them.
Have they been listening?
Well, sometimes, but councils will decide themselves how to proceed.
Although we have given councils a general awareness of the process, the circumstances are quite different. For example, Scottish Homes stock was spread over a huge geographical area, whereas local authority stock is within the council boundaries. Perhaps councils must also take a wider perspective, because they have a wider strategic role to play at a local level. Although we can give councils a lot of information about the mechanics of tenant consultation and private finance, we are always keen to stress that we have learned from a number of years of experience. There is scope for local authorities to do things differently from us and we are simply sharing our experience to help them formulate their own views on what is best for them.
You would tell local authorities that are going through the process that there are factors that determine successful transfers. We are trying to work out what those factors are, and we are interested in your experience of having undergone the process. What factors emerged from dialogue with local authorities?
I stress the need to involve tenants from the outset. The tenant consultation process is essential. We also advise that, early on in the process, local authorities should obtain a stock condition survey to get an indication of investment needs. They should study that along with the housing trends and housing demand for the area to inform the options for the stock in the future. They should take on board tenants' views and involve them in that process.
Do you have any worries about what you have observed of the transfer process? Are there concerns that you think are not being fully addressed?
I only hope that others will not go down the same avenue as we did, reinventing the wheel and coming across the same pitfalls.
Do you think that mistakes are being made at the moment?
Some councils have not started by consulting their tenants at the outset. However, they are now beginning to do that. Initially, their motivation factors are different.
Are you generally positive? Is this a good time for Scottish housing?
We have been sharing our experiences with councils. All councils are different. Some may follow our advice and some may decide to follow a route that they consider more appropriate for their circumstances. I do not doubt that mistakes will be made along the way, but we should be able to learn from those mistakes as we progress.
Can you explain Scottish Homes' role in registration and monitoring?
We are responsible for registering housing associations in Scotland. We are limited in that we cannot register other types of organisations under statute. However, last year we introduced an option for housing companies to register with us on a non-statutory basis, by setting up a contract with us by the terms of which we both agree to abide. Having said that, only a couple of organisations have gone down that route. We hope that future housing legislation will make that a short-term, stop-gap approach. We hope to be able to register every type of organisation under statute eventually.
Do you believe that all registrations should be statutory? Are there any downsides to contractual registrations? What would Scottish Homes prefer?
Our preference would be to have every organisation registered under statute. A level playing field is always preferable. We introduced contractual registration because there was not the option to offer a wider group of organisations statutory registration. The limitations of statute were that they drove new housing organisations down a specific route, demanding that they had a certain constitution and set-up. If Scotland is to address its housing problems, it must be more flexible than that. In the longer term, I would like there to be statutory registration for all. The lenders prefer that, because it offers them greater protection in terms of the powers that become available to the regulator. The tenants can also rely more on the regulator being able to address any problems that arise.
What criteria do you use to monitor performance? Do you believe that the present criteria are satisfactory? Will they continue to be suitable as more stock is transferred?
I have always believed that our performance standards have been the backbone of our regulatory framework. They have been revised three times since they were first introduced in 1991. They are not simply set and then never developed. One of their key advantages is that they are not handed down by the regulator to those who are regulated. The process by which the standards are set is a negotiated, consultative one. All those who are regulated are involved in deciding what the standards should be. When we publish the standards, they are jointly badged by ourselves and by the representative body of those who are regulated. There is real ownership of those standards.
Are you aware of any landlords who have experienced performance problems? Why have those problems arisen? Is it to do with size, geographical area or diversity?
I am a great believer in the diversity argument. I think that there is room for extremely small organisations and for extremely large ones. Nobody could cite one factor as the sole cause of failure.
I appreciate what you have said, particularly about smaller housing associations. Do you have any experience that suggests that larger housing associations, especially those that cover a wide geographical area, find it more difficult to deliver on the goals of community empowerment and tenant involvement? Is Scottish Homes aware of any particular cases in which such difficulties have arisen? If so, how could it ensure that the goal of community empowerment is delivered?
It is much easier for community-based organisations to identify their communities. Whereas they have a ready-made legitimacy in an area, more geographically dispersed organisations have to think longer and harder about how to deliver on our objectives of community empowerment and tenant involvement, although I have seen excellent examples of how those objectives are being delivered, and great improvements have been shown in recent years in that regard. People are trying to find new ways to link people in and get them on board.
Scottish Homes has powers that it can exercise in the event of continuing performance failures. They come under what we call section 17.
I was just going to ask you about those.
Under section 17, we have the power to nominate people on to the management committees of housing associations. The most draconian power is to transfer stock to another organisation. In recent months, we have taken a backward look at how we have exercised those powers over the past decade. It was interesting to note no real correlation between performance failure and size; there is a fair spread of performance failure among various types of housing association.
And the two are often related.
I would like to move on to whether your powers to intervene are sufficient. Do you believe that section 17 appointees can address the problems that housing associations face if they fail to perform and fail to deliver for their tenants? Do you believe that it often takes far too long for section 17 appointees to be put in place and to start delivering?
You have raised a very important point about the difficulty section 17s have addressing the problems of an organisation alone—especially if the organisation has taken some time to get into its problems. It can sometimes take quite a long time to get out of them. We had an internal exercise to review the use of section 17s. The board wanted to know why it took a long time for section 17s to have an effect and how successful they had been in addressing the problems of an organisation.
The Gap Housing Association is a particular example. We would not pin it up as a measure of how successfully things have been done.
To me, Gap highlights all the things that can go wrong. What powers does Scottish Homes have to intervene if the landlord runs into financial problems and is not able to deliver on its commitments to its tenants?
We try to ensure that the landlord does not get into financial problems in the first place. Our regulatory regime is geared towards avoidance of such situations rather than dealing with the mess that is left if something goes wrong. That is why, with a stock transfer, we have to have teams of advisers—accountants, lawyers and so on—to enable us to do proper risk assessments to pre-empt any problems. However, we can intervene to the extent of transferring assets from one association to another, which is the most draconian power I have come across in any regulatory process I have been involved in.
The point that you are really interested in is whether our powers will lead to tenants getting what they expected. Although I accept all the criticisms about this being a slow process, we would hope when using transfer powers to transfer assets to an organisation that has the financial strength to ensure that promises to tenants are delivered.
In our submission, we have indicated that over the years we have developed a standard contract of sale that builds in the commitments that new landlords make to their tenants prior to a ballot. Those commitments relate to promises about rents and investment, and there are clauses in the contract of sale that make them binding. Registration and supervision monitors not only against overall performance standards, but against the contract of sale for 30 years. That protection offers tenants confidence. It was not our stock that transferred to Gap in Airdrie and I am not sure that such protection was in place there.
In your memorandum you touch on your growing experience of giving advice to local authorities on stock transfer. Has Glasgow City Council requested any advice from you on its proposed stock transfer? Have you been involved in that in any way?
Only in one instance, when we were asked by the Executive to have discussions with Glasgow City Council about costs. I believe that our managing director in Glasgow has been involved in the steering group, but the initiatives unit in Scottish Homes has not been directly involved.
Over the past several months, we have been fairly closely involved with the Glasgow City Council proposals. As Rita mentioned, Ewan Johnston, our managing director in Glasgow and north Clyde, is working with Glasgow City Council colleagues on those proposals. One of our board members, Rani Dhir, is also involved in her capacity as a member of Glasgow Alliance. I have been involved in discussions with housing officials and the Scottish Executive, providing advice and helping to shape some of the proposals. Carole Oatway and her team have been involved in discussions about the shape of the new landlord and other issues associated with governance.
However, your intervention has come not at the request of Glasgow City Council, but since the Scottish Executive became involved in the task force, has it not?
No, we were contributing before the Scottish Executive became so closely involved with the proposal. We had very early discussions with David Comley and his team at the housing department.
I want to ask about the future role of Scottish Homes. At the moment you have a certain size of staff, but there is a growing number of housing associations, new transfer bodies and the like. Do you have the staff and the range of expertise to deal with the foreseeable extent of your monitoring and regulatory role?
We think that our monitoring role will inevitably expand and become more complex. The organisations that we currently monitor, while diverse, are small in comparison with some of the proposals that are emerging from local authorities' considerations. I use those words advisedly, because we still do not have a clear view of what the new structures will be. Carole Oatway and her team are gearing up to deal with a more complex working environment, but we are caught between the need to gear up for the future and our uncertainty about what the future may bring. That is why we are taking a situational approach to the expansion.
Can you use staff who have been made redundant from your original landlord role in that context, or are you having to consider doubling your numbers or increasing them by half?
The numbers are rather uncertain. We know that we will have to expand, and we have designed the bridging programme so that we can reskill staff and ensure that we do not lose good staff who might otherwise be made redundant.
If proposals such as that for the Glasgow single-vehicle regime go ahead, involving a transfer mechanism and, in due course, other community bodies as the ultimate owners, how will the regulatory function operate? Who will be regulated and who will be regarded as responsible? Do you think that it will be difficult to sort out the various lines of command and communication?
I see no difficulty. We have not received detailed proposals from Glasgow City Council, so we are speculating at the moment. However, I understand that the city-wide organisation that it is seeking to develop will be a housing association. It follows that, under statute, it will be regulated by Scottish Homes. I do not see any lack of clarity there. I assume that there will be a contract between Glasgow City Council, which is transferring the stock, and the city-wide organisation; monitoring activity will need to be dealt with within that context. The council may look to the regulator to fulfil that part of its responsibilities on its behalf.
But there may be a more complex structure, with a central body and, in due course, smaller groups. Do you think that you will have a role in resolving any disputes that arise between those?
As regulator, we would not want to get involved in holding the jackets in disputes between the city-wide organisation and smaller organisations. We would like a mechanism for dealing with disputes—arbitration and so on—to be built into the transfer process up front, so that the regulator is not the first and last line of defence. In that situation, we would step in only when there was an irretrievable breakdown. I suspect that, because of our continuing monitoring arrangements, particularly for new organisations, we would be on their doorstep. We hope that mechanisms would be in place to give us an early warning, so that we could intervene in a way that would enable the parties to deal with their differences, rather than act in a more draconian way.
You would be the divorce lawyers rather than the mediators in that context?
That is a good analogy.
There are examples of group structures that are operating in Scotland in which a clear joint agreement document sets out the relationship between the parent organisation and the subsidiary organisation. Those agreements tend to devolve a lot of power to the subsidiary organisations. We have not come across any major disputes between the parent and the subsidiary.
Can you cite any examples of the sort of organisations that you are talking about?
The Home Group, which is registered with the Housing Corporation in England, has a registered subsidiary in Scotland. When we registered that organisation, we were keen to ensure that it had a lot of autonomy and could deliver against our objectives for registered organisations in Scotland. The organisations have a clear joint agreement that allows the subsidiary to operate without interference from the parent, provided it satisfies the terms and conditions of its business plan.
It might be useful to make that one of the documents that we might follow up on.
On that theme of following up—Fiona.
Some of the lenders who have spoken to us have said that they would be interested in financing deals other than stock transfer if the package stacked up. When you attended the committee previously, you said that you were considering other ways in which to finance housing—in particular, securitisation, syndicate purchase and special purpose vehicles—and that you could give us a paper that would outline those options. We have not received that paper yet. Would you be able to provide it for us?
The committee received a paper. It was sent in December, before Christmas.
We received information on cost comparisons.
Two papers were submitted to the committee: one contained cost comparisons, the other contained a synopsis of the three types of innovative finance.
We have not seen the second paper during our preparation. We will check up on that. Could you give us an outline of those options?
I am in no doubt that the papers were sent; however, I can give you an outline. When we last spoke, we said that we were exploring other options, one of which was securitisation. Some authorities are considering securitisation in the context of retaining ownership of the stock while still being able to generate finance on the back of the income streams. That option has now been ruled out by the Treasury and I understand that it would count against public sector finance. That does not rule out the possibility of a securitisation deal in a housing association context, but we understand that it cannot now take place in a local authority context without the private finance being a score against the public purse.
Have there been any developments on special purpose vehicles?
A special purpose vehicle is simply a mechanism whereby, instead of the funding going directly from the funders to housing associations, housing associations form themselves into syndicates for the transmission of funding—for the generation of funds as a club, if you like. The cost of finance would be a good deal less as a result of the bulk purchase arrangements.
That confirms that the core of the stock transfer programme is taking housing finance off balance sheets to help generate finance. Is that your view?
I do not know of any other way in which to deal with private finance without taking it out of the public sector, other than PFI—and we feel that PFI is not suitable for large-scale stock transfers.
We could obviously have a future debate on the SNP's public service trust.
This issue has been brought into sharper focus by the fact that Scottish Homes is converting from a non-departmental public body to an executive agency of the Scottish Executive. It is therefore a topical subject.
So you will have to be bailed out?
We will have to deal with that. It will come down to a straight choice between repaying debt and suffering significant breakage costs. In repaying our debt, we will repay loans that have lower rates of interest and therefore the lowest breakage costs. However, we now have debts with fairly high rates of interest, and the breakage costs associated with them are significant. We will either have to write off the debt or service it during the period that is still left on those debts.
Would you ever have allowed one of the organisations that you monitored to get into that financial situation?
No.
Accountability was with the Scottish Executive—the Scottish Office—which would have known your debt portfolio at that time.
Ultimately, the accounts and reports are the responsibility of the Scottish Homes board, which submits its accounts to the Scottish Office. When Scottish Homes became aware that diverting transfer receipts to fund new build was not tolerable, it alerted the Scottish Executive to that and a mechanism was put in place to deal with its technical insolvency.
I would like to continue this line of questioning, but perhaps we should move on. In its evidence to this committee, the Council of Mortgage Lenders said that lenders would be looking for asset cover ratios of 1:1.25 rather than the 1:1 ratio that has traditionally been achieved in Scottish Homes stock transfers. I want to pursue the issue of low asset ratios. We are not financial experts in this committee, so perhaps you might want to explain the significance of low asset ratios. What would you regard as an appropriate ratio for Scottish council housing stock?
As CML pointed out, 1:1 is the standard asset cover, although the ratio is different south of the border. We are pressing strongly for the CML to stick with the 1:1 ratio, as we think that there is sufficient slack built into the valuation. Stock transfers are valued on the basis of a 30-year cash flow model, which builds in rent, associated costs and the cost of private sector funding. In building in the cost of private sector funding, an 8 per cent discount rate is applied, which equates to an interest rate of about 10.5 per cent.
On warranties, Dumfries and Galloway Council said that it did not think that there was a problem—it was prepared to give full cover and warranties.
It does not work like that. The Scottish Executive, or the organisation that ultimately signs off the Dumfries and Galloway deal, will want to ensure that as little risk as possible remains with the public purse. Over the years, we have been resisting granting warranties and we have had a fair measure of success. I suspect that in some of the larger deals, the lenders may apply a good deal more pressure. There will have to be negotiations about the amount of risk that is transferred and how much that will cost. The risk might be transferred to the lenders, but the margins will increase as a consequence. It is swings and roundabouts.
How do you ascertain value for money for the public purse in the individual projects that you undertake? Last December, you sent us a memorandum in which you pointed out that it was perhaps misleading to assume that comparisons of differing costs of borrowing were the proper criteria to apply to the calculation. You gave us figures showing the registered social landlord 20-year borrowing rate as 6.53 per cent, with a 1 per cent margin built in, as opposed to the 6 per cent offered by the Public Works Loan Board. If those comparisons are spurious, how should one calculate value for money for the public purse?
I do not think that we used the word "spurious" anywhere in the submission. We said that
Fine. Examining the prices that you have obtained for your own stock over the years, I see that there seems to be a fairly significant variation, for no apparent reason, although I dare say you will come up with some explanation. How do you account for the variation from £7,000 per house over the years down to £2,000, and to more than £12,000 in some cases? The timing does not seem to be relevant and I cannot understand why that variation has occurred.
The model is a standard one, but if you knew our stock, you would realise why there is a significant difference in the valuations. Some of our stock is in reasonably good nick, whereas other parts of the stock require significant amounts of catch-up repairs and improvements. Without going into detail, I would suggest that that is the major variable in the calculations. The assumptions regarding management costs and funds are fairly standard, but the quality of stock that is transferred will have a major impact on the unit value that is attached at the point of transfer.
Would it be fair to say that when you started the exercise, which is a worthwhile one, the condition of the stock that was initially transferred was better than that which you have transferred recently?
I do not think that it would be true to say that. The variation continues even in the current stock.
I would like to ask Ms Stenhouse how the initiatives unit advises people to keep costs down in stock transfers. Mr Hay gave the example of 15 lawyers around the table and said that the legal expenses were horrendous. In your submission, you mention that you have transferred 41,000 houses in 83 different transfers. The legal expenses must have been horrendous, particularly if English building societies were involved.
Like Berwickshire, we are fairly lean and mean. I have no experience of 15 solicitors sitting around the table, but we have an in-house legal team, the new landlord will have a solicitor and the lender will have a solicitor. Our in-house legal costs are about £124 per house.
The experience in Berwickshire was at the very early stages of stock transfer. Over the years, everyone has become more comfortable with the process, including the England-based lenders, which are now lending quite heavily. There have been significant reductions in costs. However, we still need to engage with lawyers, accountants and so on as part of the process. I suspect that the process is much leaner and meaner than it was.
I realise that the Berwickshire transfer might have been in the early days and matters have improved somewhat.
That will extend over the 30-year period. It does not include day-to-day repairs or maintenance; it is capital investment only.
What evidence do you have that those contracts are being fulfilled?
Carole Oatway's department monitors the contracts to ensure compliance. Our finance department has a mechanism to scrutinise annual reports and accounts. We check the levels of investment. There is a combination of a desktop review and a more substantive review that is carried out by Carole's team.
Ms Oatway, can you give me an undertaking that all the stock transfer contracts in the list in the submission document are being fulfilled?
The contracts that we have checked are being fulfilled.
Are you sure? What about Paragon Housing Association in Clackmannanshire? When I met Clackmannanshire Council last Friday afternoon, I was given a fairly ghastly report of the performance of Paragon in Clackmannanshire.
Most of the contracts have only indicative annual costs. There is flexibility in the contract for certain amounts to be spent over fixed periods. We try to ensure that the contract conditions are not breached. I can think of a number of examples of housing associations varying their rate of expenditure. As long as they meet their full commitment by the end of the period, we are satisfied that the contract conditions are being met. I do not say that no one will breach contract conditions, but if they do, we will know that they have done so and we will raise the matter.
Clackmannanshire is a small council, whose housing stock, unusually, is in good condition and which has relatively satisfied tenants. Unlike Mr Calvert under the previous regime, many tenants, I gather, are happy with the situation in Clackmannanshire. A contrast strongly in favour of the council was drawn between the performances in terms of renovation and maintenance of Clackmannanshire Council and Paragon Housing Association.
That observation was made by the council and was hardly an objective comparison between its performance and that of Paragon.
That is why I am asking you for an objective view. You can knock down or support the council's view.
Paragon is a relatively new organisation, which was subject to pre-registration and post-registration audits by Carole Oatway's team. We are satisfied that it has the capacity and management abilities to deliver on its contract. If Clackmannanshire Council has evidence to the contrary, Carole would be happy to hear from it. However, I think that it is unfair to single out Paragon on the basis of a comment by Clackmannanshire Council comparing itself with Paragon.
You say that it is unfair to single out Paragon. Although I accept that Scottish Homes has to make general statements, I encounter examples—Paragon is only one—where there is a problem. I get a different view from my constituents. My concern is the extent to which you are monitoring housing associations. I get feedback from tenants, not to mention councillors, that is different from what you are saying.
I assure you that Paragon is very accountable to its tenants and to Scottish Homes. If there are problems, we will be delighted to hear about them and to pursue them.
I want to return to the debt question. I did not quite pay attention to your answer to Fiona Hyslop.
It was good. You should have been listening.
As I understand it, some years ago, when Tories like Bill Aitken were in power at Westminster, the Government gave Scottish Homes a special grant of £250 million to write off the outstanding debt at that time. You are telling me that, despite that huge Government subsidy, Scottish Homes used its receipts from stock transfer to fund its development programme rather than to pay off its debts, that the error of its ways was only discovered a couple of years ago and that the Scottish Executive then made a further contribution. What was that further contribution?
You are correct to say that there was a debt write-off of about £250 million. As a consequence of a revaluation of the balance sheet of Scottish Homes there was a shortfall in the account. Central Government made funding available to deal with that shortfall. We were then back on an even keel, so it was judged that it was sensible to use receipts for the programme.
It is obvious that you were not on an even keel. You were using money that you should have been using to reduce debt to invest in a development programme.
With hindsight, one can see that that is the case. We should have used the money—
Who guards the guardians? Who monitored this and told you that you were doing the wrong thing?
We should have used the money for the repayment of debt. It was only when Scottish Homes pointed out that that situation could not continue that we decided to use receipts to repay debt.
What was the Scottish Executive contribution?
I can send you the detail of that. It was about £40 million.
So another £40 million of the limited budget of this Parliament had to be used to bail out Scottish Homes from the error of its ways over many years.
You could look at it another way.
You could, but I have chosen to look at it in this way.
I suggest that we spent some of that money several years ago to accelerate new building and improvements that might not have taken place if we had used the money to repay debt. It could be viewed as reasonable to manage one's finances in such a way that one spends—
Spend now, pay later. It is the Scottish Parliament that pays the bills that the Tory Government incurred some years ago.
In managing one's finances one takes decisions about whether to spend or to repay one's debt. We were happy about our decision until recently, when the decision not to repay debt started to impact on the technical insolvency of Scottish Homes. We then approached the Scottish Office, which agreed to assist with the repayment of debt.
I know of tenants of Scottish Homes who are resolutely opposed to transfer, and insist that they will remain with Scottish Homes. I think that you will put them out to some kind of management in the future if they refuse to transfer to a housing association. Will their rents be used to pay off the residual debt and will their rents go up as a result of the debt?
No, we—
How will the residual debt be cleared?
We need to work with our Scottish Executive colleagues to deal with the transition of Scottish Homes from a non-departmental public body to an executive agency. The need to address the residual debt will be included in the financial considerations.
If Scottish Homes does not pay back the debt, the Executive has to bail it out by clearing the debt.
The situation could be addressed in several ways. One way would be to write off the whole amount, but another is to continue to service the debt as Scottish Homes is doing at the moment. We have £20 million in interest charges built into our budget. We are still considering how to tackle the debt.
We will ask the minister about that when she comes.
We will need three days for the minister.
I do not know how to follow John McAllion.
We do not expect to have much stock left by the time we become an agency of the Scottish Executive.
But you will have some stock left.
It looks as if we will have small pockets of stock. We do not know whether those houses will remain in our ownership, whether they will be transferred elsewhere or whether we will make alternative management arrangements for them. We have told tenants that we will cease to be a landlord from March 2001.
Who currently scrutinises Scottish Homes transfers for value for money?
Scrutiny is carried out in a number of ways. Members of staff in my team assess proposals for value for money. The proposals then are submitted to the Scottish Executive. Formerly, the Secretary of State for Scotland had to approve proposals on various value-for-money and other criteria.
Proposals are also subject to a test check by the National Audit Office, which scrutinises a number of files annually to ensure that the work has been done correctly.
So how did the technical insolvency arise?
The issue of the technical insolvency was raised by Scottish Homes and not by the auditors.
I know that, but my questions are about scrutiny of value for money in Scottish Homes.
In reviewing the accounts, we took the view that if we carried on applying our receipts to our programme, we would eventually have a very heavy debt burden with no assets to back it up. We then decided to start repaying some of the debt.
So the scrutiny is purely internal.
No, our accounts are subject to scrutiny by the NAO.
As Rita Stenhouse has just said, you will be left with a small residual stock. Will that be because of tenants' demands to remain with the residual stock or because of fundability?
There will be a little bit of both. We do not yet know which estates will remain in our ownership, but it is likely that we will have one estate that is made up of Orlit houses, which are designated as defective but which will last for perhaps 10 or 15 more years. They are in an area that does not attract grant funding. Unless we are able to package that stock with stock in another area—which is not possible using the stock that we own—it will attract a negative valuation and a grant of at least £7 million would be required to demolish it and build new housing. The problem is complex and will continue beyond March 2001.
Although you cannot give us precise figures, can you give us an indication of the numbers of houses that you will be left with? You said that there were 200 houses on one estate.
The other estate, East Balornock, has 250 houses. We might be left with another estate in Anderston. We are doing structural surveys of the stock there and developing further the first stock condition surveys. We will discuss the findings with the Anderston tenants and they will be involved in the future of those houses. That exercise might not be complete by March 2001, so we cannot say whether we will be left with that stock.
We have successfully transferred more than 41,000 houses. The way in which we have done it might be different from the way in which councils are doing it. We took a situational approach to the transfer and have been working our way through a programme that is based on ballot areas and communities. Before the minister made the announcement about the future of Scottish Homes in November, we had decided that we had to have an end point in mind to give us a degree of certainty in the transfer process. The fact that the minister wants Scottish Homes to become an executive agency has brought the question of residual stock into sharper focus. If Scottish Homes continues to be a landlord as an executive agency, the Scottish Executive will be, by default, a landlord as well.
When you are left with residual stock that you cannot transfer because a group of tenants have decided that they do not want it to be transferred, where will those houses go, or who will pay for you to get rid of them when you become an executive agency?
I am not suggesting for a moment that we will want to get rid of them when we become an executive agency, but it is something that we need to consider. Our intention is to transfer the stock in totality, because that is best for tenants, in terms of investment profile, rent certainty and everything else. However, if tenants choose not to transfer, we will not force them to do so, but we will need to enter into a dialogue with tenants groups and others to determine what the best arrangements might be for the future of the stock.
We are running short of time, as ever.
My question is for Rita Stenhouse, given her responsibilities. I am interested in the fact that Scottish Homes set up an initiatives unit, which you mentioned in your memorandum. You say that that was done
There were a number of factors. In 1989, when Scottish Homes was required to consider stock transfer, it was pretty much an unknown. Nobody in Scotland had done it, apart from the publicly funded transfers in the cities. We set about the task by asking our housing management staff to explore options with local tenants. The staff felt under threat, particularly when we were required to seek competition, because they did not know what their future would be. Tenants and staff had fears.
The conflict of interest concerned their job security.
No. Job security may have been one factor, because they felt under threat, but where staff had started to talk to tenants about setting up new organisations to compete, how could they then be involved with tenants in exploring the wider options and appraising proposals? That was an obvious conflict if they were going to be in competition, so there was a second conflict of interest.
Were the staff in the initiatives unit transferred from other jobs in Scottish Homes?
Yes—in the first instance, the individuals who joined that unit were mainly from different parts of Scottish Homes.
Might that model have something to offer larger local authorities in particular, if they were to be involved in large-scale stock transfer?
Yes, it certainly would.
Would you advise disengagement from the normal, day-to-day business of a local authority housing department?
Yes. In fact, we have been sharing that model with several councils and trying to help them understand that conflicts of interest will arise, if they do not exist already, between the roles of buyer and seller. The obvious vested interests must be addressed sooner rather than later, and one of the ways in which to address those interests would be to establish a unit to take on that responsibility on behalf of a council.
I want to touch on one or two other staff issues. In your précis document, which is dated October 1999, you comment on staff. It is interesting that you headed a section on page 3:
Staff motivation evolved over time. In 1989, members of staff—I was one—naturally felt vulnerable and threatened. Tenants and staff were reluctant even to think about stock transfers. However, over time, by building on the successes and seeing what could be achieved, gradually staff were motivated to become involved, with tenants, in supporting stock transfers. With regard to the staff who have transferred, I understand that they have shorter working weeks, higher salaries and greater job satisfaction. The turnover of staff who moved to the new organisations is much lower. Therefore, whereas in 1989, housing management staff felt vulnerable and threatened, now they have huge opportunities for career development.
I am tempted to ask why you have not transferred, but that would be unfair.
They cannot afford me.
While these may not be your words, the document goes on to say:
The repairs and maintenance staff from the area and district offices transfer with the stock. I do not know whether you are aware that Scottish Homes had a building department that was transferred—or sold off—to Mowlem Construction many years ago. Contracts were assigned for a period and it was then up to the new landlords to tender for the work. I do not know whether you were asking about the DLO-equivalent department or about repairs and maintenance staff.
I was asking about repairs and maintenance staff specifically.
They transfer with the stock.
I did not know about the transfer to Mowlem Construction of the building department—or rather the fact that it was sold off.
No.
So you have no knowledge of what was happening.
No.
Were the repair and maintenance staff transferred at the same time as the housing stock was transferred to the housing association?
Yes.
I intended to ask about participation and the DLO, but those issues have been covered. It has been pointed out that it is important to involve tenants. They want to know that they have security of tenure and they want to know what improvements will take place and how much rents will be. Rent levels that are set following valuation determine what improvements will take place. The committee has heard evidence that indicates that rents will go sky-high and become unaffordable. I was concerned by the evidence from Berwickshire Housing Association on the way in which it sets rents.
Stepping back, I can say truthfully that in the bulk of the 83 transfers, the landlords were able to carry out major works on the properties and to secure effective management and maintenance services. They have made a commitment that rents will increase by no more than inflation plus 1 per cent. That figure—if that is the figure that was in the proposal—was built into the contract of sale and is the ceiling. There is evidence that some landlords have been able to carry out major works in the early years after the transfer without that 1 per cent increase.
It is a rent-led system.
There are cases in which housing association rents are relatively low.
Would it be possible to have a note from you of what the rents on your properties were at the time of the stock transfer and what they are now? We have heard conflicting evidence and we must have the facts. I apologise if the Scottish Parliament information centre is collecting such information, but it would be good to tie that up with the information that we have before the committee.
We would be happy to do that and to give members an explanatory note on how rent uplifts are determined within the contractual documentation. What Philip Jones and his colleagues from Berwickshire Housing Association described is very much how things operate south of the border, not necessarily how things operate in Scottish Homes transfers, although some of the lenders would like to see the English model imported into the Scottish context.
We are well over time, so I will draw the meeting to a close. I thank your organisation for coming to see us for a second time. Your evidence was extremely helpful. We will pursue the requests for information that have been mentioned.
Thank you. I would like to extend an invitation to individual committee members to come and speak to any of us or any of the rest of the team at any time. I am conscious that questions have been thrown at us about securitisation, loan debt and so on, which are difficult to cover in the short time that is available. If members want to discuss any issue in more detail, we would be delighted to meet them either in Edinburgh or in Glasgow.
I am sure that we will take up that offer.
It also might be worth the committee's while hearing from the horse's mouth. It might be worth inviting some of the tenants who are involved in the committees of the community landlords that are on the list that we provided.
We have undertaken some visits, but we will take up those ideas.
Meeting continued in private until 13:03.
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