Housing and Regeneration Bill 23rd June 2008

Lord Mawson: I shall speak to Amendments Nos. 113B and 113C. A well conducted ballot is widely thought to be the best way to interpret existing transfer legislation. The proposal is now to write the requirement for a transfer ballot more directly into the Bill. The value of ballots is hard to argue with, but it is worth considering wider unintended consequences and what often happens on the ground in housing estates.

In east London, we have had nine years of experience of dealing with mandatory stock transfer ballots, nearly all of which we have won with resounding majorities. However, the housing company of which I am a director—I must declare that interest—has experienced appalling delays in the refurbishment of the homes of very vulnerable families; that has resulted from the

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political knockabout that has so often surrounded the ballot process. Not only have those ballots often undermined public confidence, they have also for many months or even years distracted staff and resident directors from the core task of running a £300 million housing company on behalf of the residents.

At Poplar HARCA, we have counted the many hundreds of thousands of pounds that the ballot exercise has cost and have witnessed the confusion created among local residents who have so often felt consulted to death as a result of the process. The amendments are intended to save many housing estates across the country from that unhelpful experience and to leave the decision as to exactly how to test local opinion to those in the local context. There are different mechanisms available now to do that. What works in the London Borough of Newham may be quite different from what works or does not work in the London Borough of Tower Hamlets next door. It all depends on local circumstances. The amendments seek to recognise that fact and to leave it to those in the local context to decide which method of testing local opinion is best for their residents. In some cases, they will choose a stock transfer ballot and that is fine.

[The Sitting was suspended for a Division in the House from 3.39 to 3.49 pm.]

Lord Mawson: Before I was interrupted by the Division Bell, I suggested that there are now different ways to test local opinion. In some cases we will choose a stock transfer ballot, and that is fine, but the noble Lord, Lord Whitty, was correct to point out that if we do that, it has to be very well run. However, there are practical reasons why it is very difficult to do. Why not let the decision be made locally rather than introduce legislation which dictates that one size fits all? Housing transfers have become an established part of the regeneration scene. However, they are now highly politicised affairs. This means that often the ballot is not just an occasion where the residents assess a scheme and give their view. My experience is that people from all over the country come to these ballots with a particular axe to grind. They have become highly tangled, tortuous affairs full of accusation and acrimony.

What happens when a good scheme goes down or is delayed? There are resource issues for housing associations, so it is not just the cost of the ballot itself or the promotional material. To work up an offer, an association will have to invest many hundreds of thousands of pounds to develop a viable scheme for an estate or neighbourhood in need of comprehensive regeneration and redesign. There are unavoidable costs for surveying, master planning, pre-planning application discussions with the planning authority, business planning and financial forecasting. These resources are lost in the case of a negative ballot, however good the scheme and however necessary the regeneration. Where does the money come from? In the end, it comes from the existing tenants’ rent. Then there is the even greater loss of the regeneration resources transfer would bring. For example, in Tower Hamlets, the cost of negative ballots has been estimated at over £600 million of resources for deprived neighbourhoods.