William Sutton Group hopes its metamorphosis into a group will mean more funding
When the William Sutton Trust formally took over two associations last Monday, its new group structure began to take shape, writes Chloe Stothart.

The 103-year-old association, made up of William Sutton Trust and Aashyana Housing Association, took over Ridgehill Housing Association and Tor Homes and became a group.

Under the new structure, the trust will become William Sutton Housing Association and act as parent to the other three associations. Collectively, the four social landlords will be known as the William Sutton Group.

However, that state of affairs could soon change as chief executive Mike Morris is interested in creating a new body to be parent of the group. "Stage three will be to look at the possibility of a non-asset-holding parent," he says. "I've just started talking to the solicitors about this."

The RSL chose this model to save tax on transactions between group members. Under the old structure, a subsidiary would have paid VAT when it reimbursed another member for services, such as human resources or IT support. But this change, according to Morris, could save the group about £10,000 – and this saving is set to rise as the number of transactions between group members increases.

The William Sutton Housing Association will change from being a charitable trust to industrial and provident society in April.

Due to a quirk of the trust's rules, it was able to pay its board members even though this is something charities cannot usually do. It will continue to pay them once it becomes an industrial and provident society, though they will have less liability under the new system.

William Sutton started negotiations to take on Ridgehill while it was still in supervision after management problems (HT 2 May 2003, page 10). But, says Morris, William Sutton knew Ridgehill was set to be freed from supervision – which it was on 4 December – and that the services provided by William Sutton were part of Ridgehill's recovery package.

The group formation is well timed as the Housing Corporation is limiting part of its development funding to associations with bids of £10m or more. In its old incarnation, William Sutton could not have reached that figure – it got £6.5m from the approved development programme last year. But William Sutton Group is now one of the country's 10 biggest housing associations in terms of stock, and plans join forces with Bristol-based Redlands Housing Association and Brighton Housing Trust for a grant bid of more than £60m over two years.

However, not everything is to change. The familiar logo will remain, although with the text changed from "trust" to "group".

In the future, the group could get bigger still. Morris says he is interested in talking to other housing associations in the South, London and the Thames Gateway about joining the group.

He says: "We think the group can grow in a number of ways: through development and through the possibility of estate transfers or similar housing associations joining the group, probably within a year or so.

"We would be interested in talking to associations on whether they want to join us. We need to grow to stay in the top 10."

Inspection reports

  • Housing Corporation “traffic light” assessment of William Sutton Trust (December 2003): all green lights
  • Housing Corporation “traffic light” assessment of Tor Homes (September 2003): green for viability and management; amber for governance and development
  • Audit Commission inspection (November 2003) of William Sutton Trust: good

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