Joan McAlpine MSP has criticised the Scottish Housing Regulator (SHR) over inconsistencies in its dealings with Loreburn Housing Association and Dumfries and Galloway Housing Partnership.
The South of Scotland MSP questioned SHR Chief Executive Michael Cameron about accusations of disproportionate action - leniency in the regulator’s approach to larger housing associations - and presiding over a “climate of fear” amongst HA’s when he appeared before the Parliament’s Infrastructure Committee.
The regulator took the decision to intervene in Loreburn in 2011 - despite its 97 per cent approval rating among tenants – when the HA board took legal action to remove three of its members. The intervention has cost Loreburn nearly £500,000 in consultant and legal fees to date.
However, at DGHP - a much bigger HA that awarded a contract to failing construction company R&D – there was no regulatory issue, Mr Cameron told the committee.
It was later discovered that DGHP could have identified R&D’s precarious financial situation with a minimum of due diligence.
Following the collapse of the contract, some homes lay empty before being finished by another contractor, and tenants complained of poor construction and snagging problems to local councillors.
There are now growing calls for a parliamentary inquiry into the circumstances surrounding DGHP’s decision to award the contract to R&D construction before it went into administration causing the loss of over 200 jobs.
Ms McAlpine said:
“I think it is important to point out that, whether or not they initiate them, interventions are paid for by the housing associations and, as a result, it is the tenants who pick up the bill.
“There seems to be inconsistency in respect of how the SHR dealt with a smaller housing association with unspecified governance issues that did not affect how the tenants lived, compared with DGHP, who’s actions have at the very least resulted in a careless use of public money.
“In the case of DGHP, we are talking about a landlord that hired a builder who had a poor credit rating, although anybody who had checked or done any scrutiny would have seen that the builder had serious financial problems. That was a major mistake which resulted in huge amounts of public money being wasted, yet Mr Cameron does not seem to think that DGHP merits a greater level of scrutiny than smaller housing associations like Loreburn.
“There is mounting evidence to suggest that DGHP has taken on major contracts without due diligence.
When questioned further Mr Cameron claimed that no complaints had been made by tenants at DGHP over housing standards – despite the fact that elected representatives in the area have been made aware of tenant dissatisfaction.
Ms McAlpine said:
“I can assure Mr Cameron that there is a great deal of tenant dissatisfaction with those houses, and that tenants have been approaching elected representatives of all parties to complain. I would be very surprised if that tenant dissatisfaction had not reached him.
Ms McAlpine also highlighted concerns raised by a number of people that interventions by the regulator were harming well-performing social landlords in other regions, an issue Mr Cameron declined to comment on.
Finally, the SNP MSP asked the regulator to respond to evidence taken by the committee suggesting a climate of fear among housing associations, deterring them from speaking out against the regulator.
Mr Cameron responded:
“It is clearly a concern that there is such a perception out there, and we would want to work with the relevant stakeholder organisations and representative bodies to address those concerns and issues.”
Ms McAlpine commented:
“There is very clearly something wrong at DGHP, however, the Scottish Housing Regulator (SHR) has made clear it will not take action.
“Ministers do not regulate Registered Social Landlord’s (RSLs). The SHR regulates them and is answerable to parliament alone.
“It follows that in a serious case such as this, when the SHR refuses to intervene in a Housing Group’s failure resulting in harm to tenants and the public purse, that parliament must step in.”