Meet the Rogue TMOs by Julian Jackson
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| image by Daniel Kwiatkowski |
and Housing Associations. There is a third area of social housing - called Tenant Management Organisations (TMOs), where local residents manage their own housing, a form of co-operative housing. Though these TMOs only manage a small fraction of the UK's social housing, they are touted by their proponents as a massive success, being reputedly more efficient at managing property than councils. Housing minister Grant Shapps praises them as part of the "Big Society" and the current government are expected to try to enable more of them.
The glossy, smiley picture of happy residents managing their own housing is very far from the full story. Residents who want to operate the "Right to Manage" their own homes have to go down a long, complex and expensive (to the taxpayer) process to reach a ballot stage where residents vote on whether they want a TMO or not. If they vote Yes, the TMO then takes over managment of the properties, and appoints its own staff, with rather hands-off council supervision. The council funds the TMO with an annual budget to manage the properties. Every five years there is another ballot for the TMO to continue and if not return to council control.
The downside of TMOs is that a lot of them are not very competent, they are open to financial mismanagement and fraud, they support an infrastructure of highly-paid (by us!) "independent" consultants who promote TMOs at every opportunity to hapless tenants and leaseholders, and most importantly, having a TMO fragments social housing and is a step down the road to becoming a Housing Association - a two-stage privatisation.
I live in Southwark. I led the opposition to a TMO in my estate. It was defeated at the ballot with a 74% No Vote. It had been 11 1/2 years in development and had cost the taxpayer and rent payer directly over £200,000. That's for an organisation that eventually garnered only 110 Yes votes. During the long struggle, I met activists from Bristol who were campaigning against an equally unwanted TMO in the Bedminster area. This organisation wanted to manage 1842 homes and would have a budget of £1.5 million. This one failed even to get to the ballot stage - under the 2008 legislation TMOs have to be regularly assessed by a different Assessor to the consultants who are supporting the process.
The final assessment obtained using the Freedom of Information Act by the Bristol group is damning:
"This review fully supports the Approved Assessor’s judgement in the Stage 3 reassessment that based on the evidence provided; Bedminster TMO is not competent to manage the housing. " The document details financial mismanagment, poor documentation, an inability to learn from previous failures, including a fraud, and a lack of residents willing to take on the workload of being a board member. It is available to download here.
Between them these two TMO developments have wasted half a million pounds of tax and rentpayers money. Where did it all go? Mainly to the "independent" housing consultants who are supposed to train and steer the TMO board of ordinary residents to success. They are lavishly paid. In Southwark they were paid £64.62 per hour, and seemed to get that for travel time as well. The training they delivered seemed sometimes sketchy. None of the consultants seemed remotely concerned that some of the board members were functionally illiterate and innumerate, as well as being unrepresentative of the estate as a whole.
While researching other TMOs I coined the term "Rogue TMOs." Significant numbers of TMOs are simply a conduit for a small clique of people to have untrammelled power over residents' homes. This seems as far from a co-operative ideal as possible. Some of the extensive examples of misconduct I uncovered: TMO workers used to paint the Executive Director's house (the ED is the senior manager of the TMO), leaseholders being let off service charges if they were on the TMO board or friends of the board, expensive junkets for the TMO board, fraud and financial misconduct, bullying and intimidation.
There is also the spectre of transfer to a Housing Association, with the loss of security of tenure and higher rents, which is form of privatisation. TMOs are vulnerable to being pushed into this. Recently in Lambeth three TMOs voted to become HAs, in a very close ballot, which means that one TMO voted to remain with Lambeth although this will be transferred against the voters wishes. Once a TMO exists there is a pressure for it to leave council control altogether. The "independent" consultants lose their income stream once a TMO is set up, so they may well want to suggest to the receptive TMO board members that becoming independent of council control is a good idea - and also that board members can get paid.
TMOs also implode, with large consequences for the public purse. A few years ago Southwark had two having to be brought back into public control with huge debts. Tanner House TMO in Southwark has just collapsed. A Lambeth TMO lost £600,000 last year. This perhaps is a consequence of people whose only experience is of running a TRA getting let loose on million pound plus budgets.
My conclusion is that TMOs are not the success story they are made out to be by consultants who have a vested interest in promoting these projects and a good TRA would be wise to look very carefully at the reality behind the golden promises that come from these snake oil salesmen.
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