Ministers were last night accused of "kidding people on" over the cost of breaking up Scotland's biggest social landlord. Nationalist MSP Alex Neil claimed the Scottish Executive had long known of a financial black hole at the heart of their plans for Glasgow Housing Association (GHA). The association, according to long-standing plans, is supposed to be split up into smaller, more accountable units under a pledge made to tenants five years ago. However, GHA's outgoing chief executive has always insisted that his body didn't have the funding needed to do so. The Herald last year revealed consultants had measured the gap at up to £500m. The executive in October last year acknowledged a funding gap, although not the figure claimed by GHA, and committed itself to forge ahead with second-stage transfers (SST). Malcolm Chisholm, then Communities Minister, said that new public money could be put into the process, if needed.
Mr Neil, however, has unearthed executive paperwork that shows officials were told of the problems long before October. He said: "The Scottish Executive has known for the last five years that there has been a huge black hole about how to fund second-stage transfers. Despite repeated denials, they have now, belatedly, come round to admitting the scale of the problem._ "Why they have tried to kid people on for the last five years I do not know, but it is coming back to bite them, big-style." "Whoever forms the administration in May is going to face a fundamental dilemma of whether they commit to fund SST or whether they abandon it altogether. It's going to be a Hobson's Choice." [ I seem to remember Tenants being facred with a Hobson’s Choice namely; vote for transfer it’s the only way you’ll get investment in you housing. They lied there are lied compounded on lies! Within their own terms they lied. We were told to buy into a load of lies. This is all much more expensive than the public sector alternative and being so prone to market fluctuations is too risky a bet for people’s lives.] Mr Neil has used the Freedom of Information Act to obtain copies of advice received by the executive by consultants. Experts from Pricewaterhouse Coopers in October 2005, a year before Mr Chisholm signalled more money could be made available, warned that SST would "generate costs" and suggested some of these might be met from within GHA's own budget, perhaps its fund for redundancies. But experts also warned the executive to be careful over making additional demands on an already stretched GHA business plan. Four years earlier, consultants working for Glasgow City Council measured the shortfall at around £300m. Their findings, Mr Neil said, were shared with the executive. [ I seem to remember Tenants being facred with a Hobson’s Choice namely; vote for transfer it’s the only way you’ll get investment in you housing. They lied there are lied compounded on lies! Within their own terms they lied. We were told to buy into a load of lies. This is all much more expensive than the public sector alternative and being so prone to market fluctuations is too risky a bet for people’s lives.]
The executive, meanwhile, yesterday stressed the PwC document was one of many drawn up over the years for various parties to the drawn-out debate over SST.
Officials believe a "joint team" - set up under a progress group chaired by former Housing Minister Johann Lamont has got to the bottom of the issue, recognising that there is a difference between the price GHA wants for its stock and the amount successor organisations are prepared to pay for it. The shortfall, however, will depend on how many units GHA is split into.
A spokesman said: "Ministers have always recognised that there were significant financial complexities involved in moving to SST, and all the analysis by all parties over the past couple of years bears that out.
"Thanks to the hard work of the Joint Team and the Progress Group, there is now a clear path
"We are not interested in going over sterile arguments of the past. We want to work with everybody to fund solutions that will further benefit tenants "It is nonsense to suggest that the executive has misled anyone."
10:17pm *Monday 5th February *2007 *Evening Times*