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TMOs are not the future

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TMOs are not the future

Julian Jackson, founder of NoTMO campaign and a member of the Southwark Defend Council Housing, writes why Tenants Management Organisations (TMOs) are not the way forward.


Recently published Independent Housing Commission Report (which you can download below) is causing a lot of concerns and discussions about the future of social housing in Southwark. TMOs are very much part of this discourse.

What is Tenant Management?

Tenant Management is promoted as being the best form of social housing management. It is touted as a co-operative system where residents manage their estates to great success under benign council supervision. Unfortunately this is not the whole story - Tenant Management Organisations can go drastically wrong, and are a huge diversion of scarce funds from mainstream council housing. In Bristol one TMO development has just failed 3 assessments and been closed down - due in part to vigorous campaigning by a broad-based group which included DCH members - and three more TMOs are under development - costing £441,203 in 2010/11 and an expected £378,902 over the next two years. This is money that has been sucked out of local and central government funds and mostly goes to a small group of "independent" housing consultants who theoretically guide the TMOs to the stage where they can take over the management of their estates. These consultants are are very well remunerated for this: being paid £64.62 per hour in one failed development which cost £213,175.25 over 11 years and got a 74% vote against in Southwark.

The Problems of TMOs

1. TMOs at best are a form of benign paternalism, from a small group of individuals, with little that I have seen in the form of a wide democratic mandate or participation. This is far from the co-operative ideal promoted by parties with vested interests.

2. The legislation (Industrial and Provident Societies Act 1965 and Housing Regulations 2008) is extremely weak, and allows TMOs to have extraordinary amounts of power untrammelled by the checks and balances that reside in Councils, or proper companies registered with Companies House.

3. Therefore there are huge opportunities for financial mismanagement. The recent arrest of several Lambeth TMO officers for alleged fraud and the discovery of a £606,000 budgetary overspend in another Lambeth TMO is completely unsurprising.

4. Taxpayers' money supports a phalanx of external private consultants whose job is to promote TMOs. During the 11 years of Southwark's Unwin and Friary TMO's development, these consultants received over £200,000 of taxpayers' money. One consultant disappeared abroad in mysterious circumstances with funds from three TMO developments, including £18,788 from the UFTMO. Once a TMO is set up, these consultants lose their income stream: therefore it is in their interest to then encourage the TMO to become a Housing Association, in effect a form of privatisation. These "independent" consultants' views about the awesome delights of TMOs, widely disseminated, should be taken with a certain amount of scepticism.

5. Tenant Management is often a two-stage route to privatisation of social housing. TMOs do lead to stock transfer, as has happened recently in Lambeth. Last year an article in Inside Housing magazine suggested that the government is considering ways to make it easier for TMOs to leave council control = privatisation.

6. The supposed "efficiency savings" made by TMOs are offset by the increased scrutiny needed and the unexpected pressures on council budgets when TMOs implode, as they regularly do. The massive amounts of money needed to get a TMO off the ground mean that they aren't a cheap option but in reality a very expensive gamble.

Conclusion: stick with Council Management of your home - don't gamble on a TMO

Council housing has been proved over many years to be a stable, successful and cost-effective way of housing people. The way to deal with the housing crisis and to also, in a classic Keynesian way, provide valuable employment in a recession/depression -which is what we are experiencing - is to build more council houses, not farm out core council activities to hapless individuals who are not necessarily capable of the managerial skills necessary and as volunteers - rather than paid professionals - have no long-term commitment to the project. After a few years the TMO management board often dwindles to a tiny core of often-unsuitable people who run the estate after their own whims, which we call a Rogue TMO. Not, I would suggest, a particularly desirable outcome for the majority of the residents, who in practice have less democratic input than under council management rather than more.

For more information, please visit NoTMO website.

 

 

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