Bold Vision nears the light of day

We are almost there. After three years, Whitefriars Housing Group is on the brink of being able to get cracking and deliver its promises.

The sheer scale of the thing is remarkable. The 20,196 council properties that Whitefriars is taking over from Coventry city council form the largest transfer to date.

But faced with finding innovative ways to address apparently intractable issues, the fact that we have got this far at all is yet more remarkable.

Who would have thought that a metropolitan authority like Coventry - and a traditionally Labour run one at that - with a substantial overhanging housing debt and with massive and sustained underinvestment in its housing stock, would be able to follow this route to a successful transfer?

But it has, against all odds. I really believe that this transfer has broken down the door and other metropolitan authorities, having seen that it can be done this way, will follow suit. Given the existing ifs and buts surrounding the arms-length companies proposal in the housing Green Paper and the funding issues around the Major Repairs Allowance, I continue to believe that transfer, when supported by tenants, is the only feasible option available to lever in the investment required.

Our experience and the lessons we have learnt may help others. It has not been an easy route to follow. We have had to contend with complex negotiations with the Department of the Environment, Transport and the Regions on establishing the first group structure to receive a local authority stock transfer. The current transfer rules, which put a 12,000 unit cap on the number of properties that can be transferred, meant the government and the Housing Corporation were keen to ensure that what they saw as a large landlord with 20,000 properties was not replaced with another. Locally however, our tenants were telling us that they wanted two new separate landlords, and two ballots. This group structure - Whitefriars Housing Group - comprises Whitefriars Homes North and South - two separately registered social landlords work with joint legal ownership but a significant difference in equity stake, and Whitefriars Services, a registered non stock holding RSL that provides strategic, financial, technical and personnel support.

Further negotiations centred on the overhanging debt issue. Coventry's overhanging debt is approximately £216m together with early redemption penalties of a further £30m. The total to be paid off by government is therefore around £15m. Whilst I think the work that the government did with us and authorities such as Tameside and Burnley has resulted in national policy proposals on overhanging debt and changes to the transfer process, other metropolitan authorities will still have to grapple with these issues to some extent if they want to follow in our footsteps. Close working with the department throughout the three years of the transfer process was in our case critical.

The sheer scale of a metropolitan stock transfer has to be factored into the planning. The workload is enormous. Organising an effective consultation exercise in an urban area with a fair degree of apathy was very challenging, and there is of course still the day-to-day service to run.

Because the council is not receiving a capital receipt and the transfer was conditional on it being cost neutral to the authority, a lot of time and work has gone into the financial planning - on both sides. With no capital receipt to provide comfort, there has been little room for error.

We have tried to tackle the cross-cutting issues by integrating services. When you transfer stock this has to be desegregated in a way acceptable to both the authority and the housing company. This takes time and a lot of management input. Housing, for example, has been at the forefront of the council's approach to community safety and is central to the area co-ordination initiative. It is vital that this involvement, which includes some joint funding, continues post transfer and we have negotiated a partnership agreement with the council to enable this to happen.

We are working very hard to ensure our investment is connected with the city's regeneration agenda - we have to play our part in helping to meet the cross-cutting targets in Coventry's community plan, particularly with targets relating to poverty, community safety and jobs. The government has also made it a condition of New Deal for Communities funding in the north-east of the city that Whitefriars work jointly with the NDC partnership on housing issues. This is in line with our thinking and means we can link physical and community regeneration together.

The real driver behind this process has always been about what we could do for the tenants, or rather what we could not do and what we needed to do.

This transfer is all about the quality of life of the tenants and whether we can deliver affordable housing of an acceptable standard. Peter Lacy, chairman of Whitefriars, summed up the situation perfectly when he asked whether we could provide homes that he would be happy seeing his mother living in. The answer, of course, is yes, we can and we will.

Back in 1997, when we first looked at transfer as an option, we were facing a situation of rapid stock deterioration - the levels of deterioration were growing exponentially. This was against a background of a forecast decline in housing investment and the prospect of a continuation of rent capping.

It sounds very dramatic, but we could easily have been in a position in which we were unable to provide tenants with anything approaching decent quality housing, putting us in an untenable position.

Now we are about to embark of a £240m programme spanning the next seven years, which will see us, in the remainder of this year, replace windows and doors, carry out major roof repairs, replace central heating boilers and commence a tenant led environmental improvements programme.

Other metropolitan authorities will see transfer as a viable way of tackling their investment requirements. Hopefully our successful transfer can give them a signal that they can do it. And of course we are also delivering government policy. Besides the investment we have separated the strategic from the landlord functions and stepped up tenant involvement.

In putting together a viable business plan in the context of all the financial pressures facing this sort of organisation within a large urban environment, we showed a degree of grit and determination to make it happen. The group structure has provided us with the business flexibility but it still ensures that tenants feel part of the whole process.

But we have not only been innovative in getting this far, we are already looking at new ways in which we can combat one of the biggest problems we believe we will face throughout the whole of the programme - spiralling building costs.

Walsall and other West Midland metropolitan authorities are not far behind us and have far more properties than we do. More large scale voluntary transfers means increased demand on building companies and their associated trades.

So we are putting in place a long-term partnering strategy, whilst at the same time meeting part of our social responsibility remit. We plan to involve people previously excluded from the job market in doing some of the work that will be required if homes are going to be brought up to acceptable standards.

We want to do this by linking intermediate labour market opportunities with our investment. We want to ensure that our stock improvement programme results in training and job opportunities for local people. We are working with an organisation called CovWise, an intermediate labour market company to provide people with opportunities to train and work towards sustainable careers.

This, we think, is another example of taking a look at an issue from a different angle in order to come up with a solution, just as we had to when it looked like the whole transfer process might not get this far.

But we have proved it can be done in a metropolitan authority. Now there is a path to follow. I suspect there will be a lot of tenants who will want to lead their authorities down a similar path.