4th January 2018 via email
Genesis/Notting Hill Housing merger proposals
I am very sorry that I’ll be unable to attend the shareholders’ meeting called for 16th January to vote on the merger proposals, the reason being that I am due for cardiac surgery tomorrow and will need some time to recuperate. In the circumstances I thought I should let you know of my concerns and likely voting intentions.
To get to the point straightaway I am disappointed to find that several of the positive statements and promises made on behalf of the Board in the recent informal shareholders’ events, as well as in our one to one, are not reflected in the prospectus and rules now circulated. The fact that the documents arrived on the last working day before the Christmas and New Year holidays and included the new Rules (which had not been exposed during the informal events) has made scrutiny quite difficult for me in the time window I have had. Please excuse any misunderstandings due to this constraint.
The number of events for shareholders and the openness with which they were conducted came as a pleasant surprise in contrast to the secretive and corporatist approach of the last two decades, which had led Genesis to the brink of disaster. I had begun to think that with your arrival there was a change of tone and style, though I accept that the fundamental problem for housing associations with a clear social purpose is the Treasury’s refusal to inject adequate subsidy into new provision.
Specifically my concerns are;
- The removal of “social” [housing] from the main purpose of the merged association, in addition to the supplementary words about meeting the needs of the less well-off which go back to the origins of PCHA – this despite Kate Davies saying at the joint shareholders’ occasion that the two boards had heard shareholders saying loud and clear that provision of new social housing was their overwhelming concern;
- Many of the proposed Rule changes reduce the role of shareholders and the scrutiny and accountability of the Board while they increase the power of the Board – for example the power of the Board to approve or reject new candidates for the Board before they are submitted to shareholders, thus rendering elections effectively hollow: there is no requirement to adopt the latest model rules in this respect;
- No repeat of Kate Davies’ statement at the joint meeting that sales of valuable street properties in the two associations’ heartlands would be brought to an end;
- No reference to the intention of the merged association to remain connected to the community in its heartlands and unlike some other big associations to maintain the shareholder base – promises also made by Kate in her intervention;
- No assertion that the merged body will be able to borrow at interest rates significantly lower than those available to them separately;
- No real case made for being bigger, including no evidence for the promise to provide 400 more dwellings than would otherwise be the case – I believe there are figures available show that it is medium sized HAs that build more homes than the largest ones.
- No confirmation that there will be more expressly social housing, as compared with the incredibly low output of social housing last year: rolling affordable and social housing into one category of “general needs” provides huge wriggle room for this vital element of what the association essentially exists for;
- The trouble with the “Resident Promise” is that many promises of better service have been made before and if they are not delivered there is little that residents can do;
- By contrast there is no response to my suggestion of bringing back advisory area boards with resident participation as a way of raising the resident voice in governance without threat to the association’s financial integrity;
- Your promise of a mini-due diligence report as I requested has not been delivered and there are no due diligence reports at all for shareholders. I would be very worried if the two boards had reached their decisions on the basis of the information given to shareholders;
- Provision 8.1 of the resolution/s makes the outcome subject to the necessary consent, approval or other required authority of funders, but we are told nothing about whether these consents have been forthcoming or are likely to be forthcoming;
- It is not clear if there are resolutions (plural) to vote on or just one resolution on 16th January – having just one vote excludes the possibility that shareholders could approve the merger in principle but want changes to the new Rules or other details.
For all these reasons I can’t support the plans as currently put forward, even if I believe that Genesis merged might be slightly better than Genesis on its own. I would like to see the two Boards consider further what has emerged from the consultations and be much more transparent about the drivers for the proposals. I will be asking my proxy to vote accordingly.
With best wishes
Robin Sharp CB
Founder member and first Chair of PCHA (Paddington Churches Housing Association)