Sanctuary Housing Group

Mark Francois Excerpts

Thursday 18th July 2019 Commons Chamber

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

Thank you, Madam Deputy Speaker, and Mr Speaker, for granting me this Adjournment debate and thus providing me with an important opportunity to try to hold the Sanctuary Housing Group, which I regard as a highly dysfunctional organisation, to account. As you will soon hear, Madam Deputy Speaker, my remarks have been born from over a decade of frustration in trying to deal with these people as a local MP. To put it bluntly, I have well and truly had enough.

To begin with, Sanctuary has consistently provided a poor maintenance service to many of my constituents over a period of many years. I have had numerous complaints from Sanctuary tenants about shoddy workmanship, missed appointments and a generally off-hand attitude towards them when they complain. To give just one example, a constituent contacted me a few years ago to complain about a broken lift in one of Sanctuary’s sheltered housing units. My constituent put it in an email:

“I’m writing to complain about the fact that our lift has not been working for the past 10 days, effectively trapping my disabled wife in our first-floor flat. Today, I spoke with the Scheme Manager, who advised me there is no confirmed date for when this problem will be resolved. He also advised me that the service company assessed the lift a month ago and advised Sanctuary of repairs that needed to be done, and the lift broke down three weeks after it was assessed… My wife has been trapped in the lift in her wheelchair six or more times. Sanctuary has known there are issues with the lift and has not responded adequately.”

That is but one example of the poor level of service that Sanctuary provides, but I could spend hours reading very many others into the record. The company’s record is so poor that in March this year it was the subject of an absolutely scathing Channel 4 “Dispatches” documentary entitled, “New Landlords from Hell”. To try to summarise a half-hour documentary in one sentence, I would say that the group’s record is truly shocking. In many instances, it shows a complete disregard for the welfare, or even the safety, of its tenants. Sanctuary’s so-called board of directors should watch the documentary and then hang their heads in shame. Anybody who wants to know more about this organisation should watch the programme. I suspect they will be appalled, just as I was, by what they see.

It is not as if Sanctuary is a small or under-resourced organisation. I have carefully read its latest annual report. It currently has total assets under management in the order of £4 billion. It is one of the largest registered social landlords in the United Kingdom, with about 100,000 properties currently under management. It is, supposedly, a not-for-profit organisation, yet it made an operating profit of just under £200 million, as recorded in its 2017-18 accounts. The group’s previous chief executive served for some 27 years, but has recently been replaced by a new chief executive, Craig Moule, whose total annual remuneration, including pension contributions and so on, is now in the order of half a million pounds.

[Sir David Amess (Southend West) (Con)]

What?!

--- Later in debate ---

[Mr Francois]

Yes. By comparison, the CEO of L&Q—London and Quadrant Housing Trust—earns about £350,000 in total, the CEO of the Peabody Trust is on about £279,000, and the CEO of Genesis Housing is on approximately £250,000.

Despite previously asking Sanctuary officials for a meeting, I have not yet been offered an audience with the new chief executive, which is a shame, because the first question I would like to ask him is: “How can you justify a salary over three times greater than that paid to the Prime Minister?” I cannot countenance how someone running, essentially, a public sector organisation could be paid such a vast amount for presiding over such chaos.

To give the Minister some idea of the history of all this, I first came across the group some years ago when Rochford District Council decided to transfer its social housing stock to a new registered social landlord established for the purpose, called Rochford Housing Association. The tenants voted in a ballot to transfer to the housing association, which was then shortly taken over by a regional housing association called Hereward, and then in turn by a national organisation, Sanctuary. So I have been dealing with RHA/Hereward/Sanctuary for over a decade as the local MP.

Crucially, the original manifesto for the transfer ballot contained a commitment to build up to 50 additional units of affordable housing a year to assist the council with addressing its housing waiting list. Specifically, the manifesto—I have a copy here, because I saved one—said the following under the heading, “New affordable housing to meet local housing needs”:

“Tenants and the Council have said they want to see new homes in the area for future generations and the Council is committed to working with Housing Associations to provide affordable housing to meet local needs.

Rochford Housing Association working with Hereward Housing will aim to provide at least 50 new affordable homes each year in the Rochford District.”

That was the promise to the tenants before they voted to transfer. Sanctuary took over that commitment when it absorbed Hereward and promised to honour it when that entity became part of its group, but it has come absolutely nowhere near doing so.

I have had multiple meetings with Sanctuary down the years to try to persuade it to honour that promise, not least to alleviate the considerable pressure on Rochford’s housing list, which has sometimes, unfortunately, meant that the council has had to place families, including those with young children, in highly unsuitable bed-and-breakfast accommodation in nearby Southend.

[Sir David Amess]

The salaries are absolutely obscene, just like those of senior members of the BBC. My right hon. Friend might be interested to know that someone in my office suffered under these people as a student. Does he agree that, as we look to build a new town somewhere in Essex, these are the last people we want to get their hands on anything we might pursue in meeting our housing needs?

[Mr Francois]

My hon. Friend is absolutely right. As I will demonstrate, it is difficult, I am afraid, to believe anything that this group now says. As we have a Housing, Communities and Local Government Minister sitting on the Front Bench, I will take this opportunity to absolutely endorse my hon. Friend’s long-standing campaign for Southend to be made a city. I hope the Minister will take that back to the Department.

I have had a number of meetings with Sanctuary’s head of development, Mr Chris Cole, which have taken on an almost ritualistic aspect, with him repeatedly reading out a list of major housing developments that Sanctuary is either going to be involved with or to develop itself, hardly any of which—with the exception of some very small developments and one development at Canewdon—ever come to fruition.

Sanctuary absolutely assured me several years ago that, to make up its backlog, it would bid aggressively for the social housing component of three large developments in the Rochford District Council area known as Hall Road in Rochford, Rawreth Lane/London Road in Rayleigh, and Malyons Farm in Hullbridge. In each of those instances, despite the company’s £4 billion of assets, it underbid and did not secure the RSL element of any of those developments, which would have represented well over 100 houses in each of the three cases. Basically, Minister, these people talk a good game to your face, but then completely and utterly fail to put their money where their mouth is. That is totally unacceptable on their part.

Moreover, Sanctuary has acquired, or sought to acquire, a number of high-profile brownfield sites across the district, which it has been promising to build on for years. However, in the vast majority of cases, it has not laid one brick on top of another to this day. To take just one example, when I met Mr Cole on Friday 10 May in Sanctuary’s local offices in Rochford, he sought to assure me that Sanctuary was “actively on site” on the old Bullwood Hall Prison site, which was closed some years ago and is now a classic brownfield site. Sanctuary obtained planning permission to build there over a year ago. Quite by chance, and unluckily for Mr Cole, I visited the site the weekend prior to our meeting, and I was therefore amazed when Mr Cole attempted to persuade me that the company was actively building houses there. Even when I told him to his face that I knew it was not, because I had been there and seen that it was not, he still tried to tell me that it was. The Minister is shaking his head. I mention this vignette deliberately, because it is absolutely typical of the dismissive way in which Sanctuary treats elected representatives.

Let me say as an aside that I recently spoke to the Chairman of the Public Accounts Committee, the hon. Member for Hackney South and Shoreditch (Meg Hillier), who, for the avoidance of doubt, has not seen my speech and is not party to it. She mentioned to me in passing that she, too, had had unsatisfactory experiences with Sanctuary, but that unfortunately, because of its constitutional status—I shall say more about that in a minute—it was not subject to the remit of the Public Accounts Committee, the most powerful Committee in Parliament. That raises all sorts of governance issues, to which I shall return shortly.

Because of Sanctuary’s appalling record of not keeping to its commitments, the dispute came to a head several years ago when it agreed to sign a “deed of variation, determination and collaboration” via which it undertook to raise its game and make up the considerable backlog of houses to meet the original commitment of 50 a year. I have here a letter, dated 27 July 2016, from a lady called Emma Keegan, who was at that time Sanctuary’s local managing director. It states, clearly and unequivocally:

“At the forefront of Sanctuary’s commitment is to build homes in Rochford. Part of that is a contractually binding requirement for Sanctuary to deliver the 50 homes a year referred to in the original agreement. Taken over the ten years of the agreement, this will require Sanctuary to build 363 more homes. If we fail to do so the local Council will receive £10,000 for each new home below the target figure of 363, up to a maximum payment of £1 million. This reflects our confidence that we will make good this commitment. We have a development team focused solely on this ambition with commercial resources at their disposal.”

I submit to the Minister that that could not be any clearer, but Sanctuary never got anywhere near it. Time after time, it has failed to develop schemes and has given a whole litany of excuses, including desperately trying to blame Rochford District Council for not giving planning permission, suggesting that it was the council’s fault that the houses had not been built and the target—which, incidentally, was due to be met by March 2018, a year ago—had not been delivered.

When I met Sanctuary representatives in May, I raised that issue and was told quite forcefully by Chris Cole that Rochford District Council had “let us off’ the payment because the council had admitted that the planning delays were its own fault. I double-checked that with Mr Shaun Scrutton, the council’s managing director, at a meeting in his office on Friday 5 July. He categorically denied that Rochford had been responsible for any major planning delay and absolutely insisted that it intended to pursue Sanctuary for the outstanding amount and was considering legal action. He said to me, “I will be having a meeting with our legal team on Monday morning.” Both those men cannot be right, and, to put it mildly, one of them must at least be badly mistaken, as the two positions are poles apart.

Part of my purpose in initiating this debate was first to shame Sanctuary into coughing up the million quid that it owes my local council, and secondly, as well as arguing for the money, to argue that it should go on to build the affordable houses that it promised to build in the first place. In short, this is a housing association that, incredibly, seems reluctant to build houses, particularly if that will cost it any money. I read in the newspapers that we have a housing crisis in this country. With registered social housing landlords like Sanctuary, is it any wonder? Basically, these people are a joke, but one that is no longer funny, particularly for those who are living in bed-and-breakfast accommodation as a result of their absolute indolence.

Let me give one further example. Sanctuary assured me that it would build up to 100 properties in a site in Rayleigh known as Timber Grove, and that it was actively acquiring the site for that purpose. When I double-checked a few days ago, it had still not bought the site, which has lain undeveloped effectively for several years. That is just another example of it being extremely difficult to believe anything that the company now says based on bitter experience of a decade of repeatedly broken promises; it is that bad.

That brings me on to my wider point about the regulation of housing associations. There are good and bad registered social landlords in this country; for instance, one of the other housing associations active in my constituency is a locally based one called Chelmer Housing Partnership or CHP. If I speak as I find, I personally do not recall ever receiving a single complaint from any of my constituents who are its tenants about the management of a CHP property, although in fairness, the very good new leader of Rochford District Council, Councillor Mike Steptoe, tells me anecdotally that he has had a few complaints about CHP, which has the RSL component at the new development at Hall Road that I mentioned a few minutes ago. In any event, it is a matter of fact that housing associations, some of whose chief executives are extremely well paid—far more than the Prime Minister—are not even subject to freedom of information requests. In short, they are neither fish nor fowl—neither wholly public nor wholly private—and that leads to serious questions about who is really in charge. Partly based on my experience with Sanctuary, I wish to raise with the Minister the serious question of the governance of the sector in general.

There is a lack of an effective regulator to hold housing association boards to account and to make sure their tenants receive the kind of service for which they pay their rent. I would, therefore, like to press the Minister specifically and ask him whether the Department has any proposals to change the governance of housing associations and, in particular, whether it has any plans to bring in any form of new regulator, perhaps focusing on governance and customer service, to try to keep housing associations up to the mark. For the avoidance of doubt, there are some very good registered social landlords in this country, but there are also some very bad ones, and Sanctuary is probably the worst of the entire lot.

This is a sorry tale of an extremely badly run organisation, which does not keep its word, which obfuscates and delays, treats publicly elected officials with open contempt, and threatens to bring its entire sector into disrepute. Just as Persimmon Homes has given the private house building sector something of a bad name in recent years—I do not believe the sector really deserves that and I note in passing that the new chief executive of Persimmon, David Jenkinson, is attempting to do something to address it—I believe that Sanctuary threatens to give the whole housing association sector in this country a bad name. That would be a shame, because many RSLs do very good work to provide decent, affordable homes for our constituents to live in, and it is important to put that on the record.

I very much hope therefore that when the board members of Sanctuary read this debate, as I suspect they may, they will take radical action to address their woeful underperformance. I hope they will sack the hopeless Mr Chris Cole and specifically agree to pay Rochford District Council the £1 million that they owe. I also hope they will redouble their efforts to build the affordable housing they promised to build all along and which my constituents so desperately need.

This rolling farce, perpetrated by a failed and broken organisation, has gone on long enough and we now need action, not words. I have known the Minister for years and, as he knows, I have high regard for him. I am sure he will take my constituents’ concerns very seriously—that would be in his nature—and I therefore look forward with considerable interest to his reply on behalf of Her Majesty’s Government.