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Warrington underwriting housebuilding in other towns


grey_man
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Steve

 

I appreciate the time you've taken to share those but I think you're missing the point. All of those examples show councils lending to housing associations to build in their own area. In the case of the Plymouth one, they openly state that the loan to the HA is to be spent within the city. On that basis, the idea that the loan is about 'economic regeneration' makes perfect sense, not least because the geography of Plymouth is very different to Warrington with no large authorities nearby. I bet local people would go spare if their council started financing houses to be built in Torquay and Exeter - and rightly so.

 

The same principle underpins all of the other lending you link to, in South Oxfordshire, Ashford and Cambridge. All money spent on local housebuilding. 

 

In the case of Warrington, however, that is not what is happening. We are financing housebuilding that is primarily within the boundaries of other large local authorities. The council has stated itself the loans are primarily about the local economy, yet Danny Mather can't even say where the houses will be built (beyond the fact that he expects two-thirds to be somewhere else) or even if the finance will be spent on new housing at all (which makes the point about assets and investment moot). It's either insane, stupid or something else. It certainly doesn't make sense and wouldn't over five years, never mind 25.

 

The question remains - why is Warrington Borough Council committing itself (and hence the people of Warrington) to spend a quarter of a century financing and underwriting hundreds of millions of pounds of housebuilding in areas like Chester, St Helens and Merseyside? If it's about economic regeneration, as the council claims, it should be investing that money in Warrington. Anything else is - quite frankly - bizarre. 

 

Taken from the foreword to that report: 

 

Taking a long term view on the housing needs and aspirations of your area and the investment needed to meet these needs can support wider plans to stimulate economic growth locally, and help to manage pressures on public services and affordable housing.
 
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Well I am glad the council are putting our dosh into bricks and mortar and getting us a handsome return.  Perhaps some of the usual gang of serial whingers on this forum would rather the council invest our money in high interest bank accounts, much safer bet, especially those lovely Icelandic banks. So what if some of Helenas portfolio is out of town, not everything is hand to mouth.  Oh yes, and having read some of the diatribe in the previous topic on this subject, (so bad the site owner had to delete it) are you surprised that councillors can't be arsed with you bunch of blowhards.  You aren't representative of or for the town and hopefully never will be.  and breathe :wink:

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But this ISN'T a case of the council investing our dosh in local bricks and mortar!

 

This is a case of borrowing tens or hundreds of millions of pounds which WBC council tax payers will be absolutely committed to paying back come what may, and then giving that money to an out of area housing association with a questionable financial position and with no guarantees that ANY of the money will actually be spent building new houses - much less new houses within this borough.

 

There appears to have been no detailled analysis of the likely rental return generated by any new properties built and whether this would be sufficient to support the loan repayments on top of the housing association's operating costs - or whether the repayments would be likely to force the housing association into liquidation leaving US with an enormous debt to service.

 

There is no evidence that the effect of tenants purchasing with Right to Buy discounts has been included in the financial model. Nor has the effect of any likely changes in legislation affecting tenants rights or Housing Benefit.

 

With a loan of anything like this size ANY professional lender would have performed a detailled due dilligence study covering the deal itself, the prospective borrower, their business plan, the market they operate in and how that could possibly change, the borrowers historical and current financial position, the exact spending plans of the borrower, the ownership and saleability of assets to be built or acquired, and the borrowers long term ability to repay the loan from revenue likely to be generated.

 

WBC are not a professional lender and NONE of the above appears to have taken place. As a result we, AND OUR CHILDREN!, could easily be saddled with this debt for decades to come.

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still rather they invest in property than the banking scams of the last decade or perhaps they ought to stuff all the dosh under the mayors mattress. Not to invest would be a dereliction of duty and I am sure if you knew any better you would be doing something about it rather than wafflingon continuously in some backwater dead end of a forum

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PJ (2,941 posts in a backwater dead-end of a forum)

 

They're not investing in bricks and mortar. They're lending, at a low rate of interest, the money to a private sector firm that is investing in bricks and mortar primarily in other towns. Warrington - as a place - ends up with a small proportion of the assets. Warrington Borough Council ends up with nothing except interest payments and a bit of extra council tax. The alternative would be the council using the £380 million to invest in Warrington's housing and infrastructure and, if that were being done, you'd be right.  

 

By the way, I don't think a 1.5 percent per annum return on a £380 million loan is a 'handsome return'. A proper investor, in property or anything else, would be expecting something a lot better, especially over 25 years. 

 

You could also be right about some of us not representing the views of the average Warringtonian, but then again the average Warringtonian may be too apathetic to worry about it - until it comes home to roost.

 

The Grey Man (288 posts in a backwater dead-end of a forum) 

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As the owner of  the site I presume it is his responsibility to decide what is and is not acceptable as banter or slander.  After all ultimately he is liable and if it were me I wouldn't want to take a chance on being sued just to protect the feelings of some loose cannon who just makes unfounded, unprovable accusations/inferrences, call them what you will,  would you?  Only saying :D

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(so bad the site owner had to delete it)

 

Did he simply peruse the scandalous diatribe or did he get a phone call from someone,after all the moderator had already censored the offending post, which were a bit strong I have to admit. ? Only asking :lol:

 

Accusing people groundlessly of corruption is usually unwarranted. Personally I feel the most likely explanation for this nonsense is a combination of ego and groupthink. It's amazing to witness intelligent people behaving like morons as soon as they put their heads together to convince one another that a stupid idea has some merit. 

 

I suspect that the council also suffers from echo chamber thinking, as most large organisations do.  

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As the owner of  the site I presume it is his responsibility to decide what is and is not acceptable as banter or slander.  After all ultimately he is liable and if it were me I wouldn't want to take a chance on being sued just to protect the feelings of some loose cannon who just makes unfounded, unprovable accusations/inferrences, call them what you will,  would you?

 

He couldn't have been sued because nobody was named, in spite of what Steve Parish might think.

 

I assume he was more concerned it was daft, unnecessary, unfounded and distracting. 

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pathetic then, like usual.  Do you need actually name individuals to get sued or are organisations able to take action?  and more to the point, were it you would you take the chance to protect the forum cred of some ranter? Let's face it, nothing at all gets solved, sorted or put right on here, its merely a sounding board for folk who want to pretend they are "doing something". 

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pathetic then, like usual.  Do you need actually name individuals to get sued or are organisations able to take action?  and more to the point, were it you would you take the chance to protect the forum cred of some ranter? Let's face it, nothing at all gets solved, sorted or put right on here, its merely a sounding board for folk who want to pretend they are "doing something". 

 

Actually I think it does make people within the council aware of what people think.

 

And, for what it's worth, I have done things that have made things happen within the council beyond chewing on here (something I do far less than you, I notice). 

 

By the way, ever talked politics, football, rugby, film or whatever down the pub? That doesn't change those things either, but it's still worthwhile talking about them. 

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Only because I have been here for far longer, gives me a better view on how things are I guess. Councillors, well the greatest majority of them ignore this platform for a half a dozen self obsessed over opinionated no marks, they listen only to the polls and votes and their Westminster masters not Grey man and his grouches. Twas ever thus. :wink:

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I believe you're right. But then again that's why they're not mad keen on being shown up in the national press for their stupidity and mistakes. Those stories in Private Eye and the Telegraph and so on, which their masters in Westminster do read, don't just get there by accident. 

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Only because I have been here for far longer, gives me a better view on how things are I guess

 

Oooooh hark at him !

 

chance to protect the forum cred of some ranter?

 

Make your mind up ! 

 

As a rate payer I would like to see a bit more scrutiny of the the  workings of WBC resulting in a reduction in the size of the Council  and correspondingly reduced rates for those who actually pay them.

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Only because I have been here for far longer, gives me a better view on how things are I guess

 

Oooooh hark at him !

 

chance to protect the forum cred of some ranter?

 

Make your mind up ! 

 

Actually he's been here two years longer than me. Not only does he not realise the bricks and mortar he thinks the council is investing in aren't even in Warrington, his maths is crap too. So posting ten times more stuff than me makes me the 'blowhard', 'no-mark', 'self-obsessed' wasting his time in a 'dead end of a forum'. :) 

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Despite PJ's attempts to lead the thread off topic I don't think this matter will just quietly pass without members of the public making their views known.  The effort and manner of his attempts to 'end the conversation' are most probably a sign of how worrying it is to the powers that be that the general public would closely scrutinise this matter.

 

The posters on this thread who have expressed concern re WBC on this matter are in my opinion very wise to do so.

 

This borrowing and lending by WBC to housing associations has been going on for quite some years. Steve Parish's estimate of interest returns may not seem so over estimated when ALL of the deals are calculated in the equation. Perhaps he could elaborate by listing them all ?

 

WBC seem to be attempting to make some easy money from interest payments on these loans and also from the govt payments they will get for building more homes.

Grey Man and Inky Pete think this is risky so do I and I think there would be very many people who once they had more information would also be greatly concerned.

 

For reasons already given by other posters it is apparent that lending to housing associations is extremely risky. And WBC seem to me to be risk taking to the extreme in their choice of partners. For example the Plus Dane Group has a financial viability rating of V2 and a governance rating of G3 their CEO Ken Perry had to step down in May 2014.

Add to that the chair of the Public Works Loans Board Tony Caplin's (forced?) resignation.

Add also the concerns highlighted in the House of Commons report "The work of the Regulation Committee of The Homes and Communities Agency, second report of 2013 - 2014."  From questions by Andy Sawford and others to Julian Ashby chair of the Regulation Committee of the HCA it seems that the risk status of some of the housing associations is not being clearly shown.

There are only 25 associations in V2 and only 6 in G3 and though there are lower ratings none are actually given lower grades in case it causes difficulties for them!

  

 

All in all it appears to me to be a very, very risky business to be putting money into, especially if the housing association has less than a V1 and G1 rating. 

 

So who in Warrington WBC has actually made the decision to participate in these ventures? Grey Man suggests it is 'group think', I would imagine that it must be a small group, and as it's been going on for some time not just members of any one political party. I  wonder if perhaps it is an officer led idea which has been passed over time  to whoever is in power ?

Can Steve enlighten us on this?  Steve, who in fact originally suggested that WBC get involved in these dealings and did all of our elected members vote on whether or not to do so? 

 

Lastly, from what I've read It seems that the little amount of housing that will be built in Warrington will not be social rented but for sale. Steve is this correct? 

Can you also give a breakdown of what type of housing (house / flat / bungalow / 100% social rented / shared ownership / for sale)  and how many of each there will be from ALL of the schemes and of course where they will be situated.   Thanks

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Quite.

 

Some lessons we've learned from watching Warrington Borough Council over recent years:

 

1. It's little or no use contacting them, because whatever information they want you to have is already in the public domain. In this case it's 'about economic regeneration' and that's that regardless of any facts that contradict their statements. If you want to know what answer you're going to get, just read one of their press releases and save your time.

2. If you want to change anything, do it yourself with the help of the media, social media and outside agencies and - sometimes, maybe, if you're really lucky, a sympathetic councillor. ie Walton Hall, Marton Close, destruction of planning records, the attempt to bribe the people of Warrington to go along with the Peel Hall development by offering them land they already owned, Stockton Heath Tip and (almost) Steve the Lollipop Man etc.

3. Don't confine yourself to doing things officially because if you do, they're likely to shut you up or the councillor or other person asking questions they don't like. Quite literally shut you up in some cases. You also have to challenge and embarrass them publicly in ways they can't control. 

 

What it all boils down to, in my view, is they've created their little echo chamber and they really don't like it at all when any other voices intrude. 

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