Power to the people

local authorities are all too well aware of the problems with standard large-scale voluntary stock transfer.

Tenants are often unwilling to hand over their homes to non-elected and non-statutory bodies and vote against it. Transfer has become unpopular with councils since it was rejected in Birmingham and new ideas are desperately needed.

With this in mind, the National Assembly for Wales asked us to develop an alternative, community-based model that could be offered as an alternative to stock transfer.

We had been working on developing models for privatised utilities companies in which the interests of the broader community were included and, as a lawyer involved with social housing for nearly 20 years, it was clear to me that this idea had something to offer the housing sector too. So we developed a model we call the community housing mutual, or CHM.

One member, one vote
The CHM incorporates the democratic principles found elsewhere in the mutual sector, in cooperatives for instance, and all tenants are members unless they choose not to be. This means the housing assets are being sold to the tenants, rather than to a third-party company or housing association, and the tenants hold the assets for the benefit of the community.

The CHM is run by a board, with tenant members elected on the basis of one member, one vote, and local authority members chosen by the authority.

The board establishes the overall vision, strategy and business plan, which must include the development of the membership, the identification of local housing needs and the devolution of management control to local communities.

The board must report every year to the members on how much progress it is making in these areas, plus the financial performance of the CHM.

The day-to-day running of the CHM is done by executives appointed, directed and monitored by the board.

Tenants therefore have a key influence upon the choice of the individuals who are responsible for the direction of the organisation which controls their housing, unlike the standard housing association and local housing company models.

Making all tenants members is significant in itself but it will not achieve a great deal on its own. It is important to engage and empower the tenants.

A community housing mutual has a specific remit to empower people to manage their housing themselves

More than just housing
Therefore, the rules of a CHM state explicitly that its purpose is not only to provide and manage housing but also to enable some or all of the communities in the area to manage it themselves. The CHM's objectives make specific provision for partnership with the local authority in promoting the well-being of the community through development, training and involvement of local people.

The CHM has powers to establish a community fund for investment in community businesses, projects and activities. There is a constitutional obligation for the members to become closely involved in local regeneration and development.

All this is likely to make tenants a lot more enthusiastic about this idea than they are about stock transfer.

The CHM has benefits for the local council, beyond being simply a way of transferring stock without having to persuade people to vote for an unpopular system. The authority nominates its own CHM board members, although these can be elected by tenants from a list of candidates it supplies.

The local authority is represented on the board; it has a veto over changes to key rules that affect the purpose, objects and fundamental workings of the CHM.

The purpose and strategy of the CHM are also intended to mesh closely with the council's strategies for regeneration and community development. These issues are not central to the constitution of the standard transfer vehicle.

Feedback so far
The reaction so far from tenants and housing professionals indicates they like this idea. So we are working with a number of councils in England and Wales who want to adopt it.

Housing consultants, funders, regulators and housing professionals have considered the community housing mutual idea and say that, if it is attractive to tenants and tenants want it, then it will work.

However, it will be for individual local authorities and tenants to decide if the CHM is what they are looking for; the voluntary stock transfer and arm's-length management organisation options have not disappeared.