Section: Housing Associations

Clays Lane Stock to Transfer to Peabody

The Housing Corporation was successful in defeating a claim for Judicial Review of its decision to transfer the housing stock of Clays Lane Housing Co-Operative (CLHC) to the Peabody Trust.

At a hearing in the High Court of Justice, Mr Justice Keith dismissed the claim for Judicial Review and refused CLHC permission to appeal.

The Housing Corporation instigated a statutory inquiry into the affairs of CLHC in 2000. In March 2001, it received a report of mismanagement of the Co-operative's affairs. The Corporation subsequently proposed that CLHC's housing stock be transferred to the Peabody Trust because of its perceived financial strength. The Secretary of State granted consent to the transfer.

CLHC proposed an alternative route, namely that its 450 homes be transferred to Tenants First, a mutual housing co-op based in Scotland. The Housing Corporation rejected the alternative and again directed transfer to Peabody. CLHC sought a Judicial Review, claiming that:

The Judge ruled that the Housing Corporation could not have known of Peabody's financial problems at the time of directing the transfer. He also decided that the Corporation had acted correctly in concluding that the transfer was in the public interest and this was more important than CLHC's right to decide how to dispose of its property.

As to the issue of members' human rights to freedom of association with each other, the Judge ruled that these would end in consequence of CLHC ceasing to exist and not because of the decision on transfer.

Clays Lane Housing Co-op v Housing Corporation

EU Rules Associations Are Public Bodies

A new European ruling could have far reaching implications for UK housing associations. Under the ruling, housing associations will now be regarded as public bodies. This will require them to comply with EU tendering rules every time they want to develop new homes.

Under the Regulations, housing associations will have to advertise all significant building and service contracts to all EU member countries, through the Official Journal of the European Union. A joint letter sent by the four federations representing housing associations in England, Wales, Scotland, and Northern Ireland urges the Chancellor, Gordon Brown, to mount a legal challenge to the ruling.

Good Practice Pay and Conditions

The Housing Corporation launched new guidelines on pay and conditions for housing association senior executives with the publication of Rewards and Risks (Regulatory Code Good Practice Note 10).

The good practice guide sets out the Corporation's views on key issues - such as basis salary scales, and performance and severance payments - which housing associations should take into account when drawing up contracts for senior staff. These include:

While the publication recommends good practice and is not statutory guidance, the Corporation emphasises that the terms and conditions of senior staff are a major governance issue. Failure to handle such matters competently and effectively may be viewed as a sign that an association is not being properly managed and is therefore at risk of regulatory action.

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Reporting on April-June 2004

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