May 21, 2008
Glasgow Housing Association put spin on figures
GHA have been accused of exaggerating the value of its homes – by up to £500 million. A report, carried out by financial consultants Mazars, and based on evidence compiled by the Glasgow and West of Scotland Forum of Housing Associations challenges the long held position of GHA that second stage transfer would leave them with a ‘financial black hole’
FINANCE experts have accused GHA of exaggerating the value of its homes – by up to £500million.
A political storm has broken out after a new report called into question Glasgow Housing Association’s view that community ownership would be too expensive.
The GHA maintains that handing over control of tens of thousands of former council houses to smaller community organisations – a process known as Second Stage Transfer – would leave them with a “financial black hole”.
But the report, carried out by financial consultants Mazars, concludes that rather than losing out, GHA would actually pocket up to £500m.
Today the Scottish Government confirmed it was assessing the report’s claims, which are based on evidence compiled by the Glasgow and West of Scotland Forum of Housing Associations.
The forum believe GHA has massively overestimated the value of its homes and claims the method used to calculate the cost of transferring 27,000 houses they want to take control of – around one third of GHA’s stock – is flawed.
The formula was devised by the previous Scottish Executive and GHA but politicians today called for urgent government action.
Labour MSP Johann Lamont said: “I have always refuted GHA’s black hole’. We need to get to the truth and ensure fairness for all tenants.”
SNP MSP Bob Doris said: “This report blows GHA’s argument apart. We now need a third party to come in and get to the bottom of it.”
And Tory MSP Bill Aitken added: “The report would seem to prove that the basis upon which the GHA fixed property prices is wrong, preventing smaller, well-run associations from owning their properties.
“The government has to look at this urgently.”
Deputy First Minister Nicola Sturgeon and Housing Minister Stewart Maxwell pledged to investigate the matter.
A Scottish Government spokeswoman said: “We have asked the Scottish Housing Regulator to provide us with an independent assessment of the report, which we intend to publish by the end of the month.”
A Glasgow Housing Association spokesperson said: “We would welcome independent scrutiny of the report, which concentrates on just one aspect of the methodology used for calculating SST valuations.
“The issues raised are not new – nevertheless GHA will co-operate fully in any discussions on this matter.”