Housing Corporation proposal would introduce 'mercenary element', says Arhag HA
Paying board members would bring A "mercenary element" into the operation of housing associations and fail to attract many new recruits, a leading black and minority ethnic association has warned.

Arhag Housing Association is one of the first organisations to publicly criticise Housing Corporation proposals to allow board members to be paid as much as £20,000 a year. The proposals would undermine the "high degree of commitment to the cause that the registered social landlord represents and articulates", Arhag said in a letter responding to last month's consultation paper on the issue.

Arhag chief executive Ronnie Moodley said the proposals had attracted widespread opposition within the BME housing sector: "There is now grave concern being expressed. Many BME groups came up from the voluntary sector and to say that people should be paid creates a potential conflict of interest."

Moodley added that Arhag's board members joined the organisation out of commitment to the local community. He called the proposals "yet another paperwork bureaucracy" that would distance associations from tenants.

The letter is the result of a recent open day, on which Arhag's tenants and members were encouraged to air their views on the proposals.

The letter, sent to the Housing Corporation ahead of the February deadline for feedback, calls the proposed £20,000 limit "excessive".

It says that although payment is discretionary, "there is no doubt there will be general pressure to pay once this system is introduced".

The Housing Corporation's proposals are intended to make the governance of RSLs more businesslike but, according to Arhag, the change would create power struggles within boards and limit the scope for bringing in new blood. "We fail to see how payment will improve performance," the letter adds, rejecting corporation suggestions that payment could be linked to appraisal.

Angela Ayton, the Housing Corporation's head of governance, said: "As yet we have received very few responses, but it was known there would be some division of opinion."