FAQ UPDATE - 4 DECEMBER 2023
If the transfer does not happen, what will the rent increase be for next year?
I have heard that Reidvale does not need to transfer and it can stay independent and do all that is needed. Is this true?
Sadly, no. As part of the options appraisal, the Management Committee looked at what Reidvale would be able to do if it stayed as an independent housing association. Whilst we are debt free, tenants know we have a considerable backlog of investment that has built up over many years.
The honest reality is that the finances of Reidvale just can’t do all that is needed. Rents have been kept too low for too long, meaning that the reserves that should have been built up to pay for major investment (new kitchen, bathroom etc) is just not there. That is why there are backlogs and tenants are promised work only for this to be pushed back each year due to not enough money being in the pot.
We updated our 30 year financial plan to factor in how we could address this. Reidvale could (and would have to) borrow money to pay for investment against the value of the stock (£18m at last valuation). This has already been factored into the 30 year financial plan. Even with this, we would still need the high rent increases (10% for 8 years) and we still couldn’t clear the backlogs quickly. We would also need to reduce our management costs which are currently high. Whilst we are debt free, borrowing money would also be a challenge as you will read later.
Given the added really tough times already facing many in our community and across the country, the Committee felt that tenants deserved more and that was why we explored the transfer. Everyone knows the really great offer that we now have on the table from Places for People Scotland that addresses all of our issues and keeps everything tenant said matters to them (our name, a new Focus Group the office, our staff team). It is now for tenants to decide on that this, against what a No vote would mean if we don’t transfer.
In summary, there is no back up plan and no Glasgow based housing associations or any other party has come forward with any submission to become the transfer partner. After a year of hard work to get what we now have on the table, it’s now for tenants to decide on supporting this, or accepting the very difficult time ahead if transfer does not happen.
Has anyone else looked at this to see if there is another way?
The Tenants Information Service (TIS) were appointed from the start of the transfer to support Reidvale tenants and provide them with free and impartial advice. Their sole interest is what is best for Reidvale tenants.
TIS were provided with full access to the Transfer Business Case and the financial plans of Reidvale and Places for People Scotland (before and after transfer).
After a thorough review by their own financial analyst, their conclusion and recommendations were as follows:
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“We are satisfied Reidvale’s finances are not viable on a standalone basis primarily because it is unlikely funding will be secured to fund the improvement programme as a result of multiple breaches of the interest cover * requirement. Failure to access new funding means finances would not be adequate to maintain a functioning, ongoing business that can meet its governance and regulatory requirements. Moreover, it could not deliver rent affordability and accelerated investment programmes with sufficient contingency against risk. We can conclude the ToE (the transfer) offers the most satisfactory outcome for tenants. The benefits on offer are substantial and include a five year rent freeze from 2024/25 post transfer and CPI +1% increases thereafter. There will also be an enhanced investment programme over the first 5 years to deliver much needed stonework improvements and kitchen/bathroom replacements amongst others (£13.7m total improvement compared to £4.4m in the Reidvale standalone plan). In addition, tenants will be joining a larger organisation with a strong track record of delivery, ongoing development (a growing business) and meeting regulatory requirements. Places for People Scotland is a fully viable organisation both in standalone and combined terms with Reidvale with all interest cover and gearing covenants met. As is the case with many larger RSLs, they assume a substantial and active development programme proposing to build over 12,000 new homes over 30 years but at the same maintaining viable cashflow throughout. It is recognised that this allows significant flexibility in the plan as development ambitions can be flexed in line with risks existing in the external environment thus allowing greater financial headroom when needed. The intended benefits on offer to Reidvale tenants are significant and will lead to better outcomes compared to what they will receive should Reidvale continue as a standalone organisation. On this basis, we can recommend ToE as the best option available to secure future viability, rent affordability and the delivery of a comprehensive improvement programme.” |
*Interest cover is a requirement that would be placed by the lenders if Reidvale (or any other association) borrows money. It ensures that there is always sufficient money to pay debts including the loan repayments.
What stage is the transfer currently at?
Following very positive feedback from the first stage of formal tenant consultation, Reidvale have begun the independent tenant ballot. This is the stage where all tenants of Reidvale cast their vote on whether they agree to the transfer of engagements from Reidvale Housing Association to Places for People Scotland (trading name of Castle Rock Edinvar Housing Association).
Reidvale appointed Civica Election Services (CES) to conduct the independent tenant ballot. This company has extensive experience in conducting tenant ballots. Ballot papers will be issued by, and returned to, CES who will report the ballot results to Reidvale after the ballot has closed.
- Phone 0800 884 0704
- Text - 80102
- Ballot Box - which is held in the Reidvale offices
- Online - www.cesvotes.com/ReidvaleHousing
No. The process has now been running for some years to allow careful consideration of options and to allow tenants to shape any potential changes.
The Scottish Housing Regulator (SHR) has been engaging with Reidvale HA due to concerns about our governance and financial management for 4 years. Whilst we have made some progress in addressing these issues, over the past years, more serious issues have come to light.
We spent 2021 and 2022 to complete the options appraisal as we really wanted to be clear on what needed to be done. The options appraisal looked at what we could do if we stayed an independent association against what was possible if we joined with a well governed and financially strong housing association. In April 2022 , we decided that seeking a partnership with another through a transfer of engagements was the best option to address the issues we faced and to do much more for our tenants and service users.
After a competition open to all Scottish housing associations Places for People Scotland (Castle Rock Edinvar Housing Association) were identified as the association with the best package of benefits for our tenants and the wider Reidvale community. After the highlights of the offer with tenants in April 23, 76.7% of those tenants who responded supported appointing Places for People Scotland as our preferred transfer partner.
We jointly carried out detailed informal consultation with tenants, factored owners, and other stakeholder over many months until July 2023 to shape the transfer offer to meet what you told us was important. This was all part of the approved transfer Business Case.
We then carried of formal consultation on the final offer and we saw over 80% of tenants give their views with 72% saying they were planning to vote YES when the tenant ballot was held. Only 8% said NO and the rest were undecide or preferred not to say.
If the ballot receives tenant support (a majority of tenants voting, saying YES), there are then other consents and processes that need to take place including meetings of Reidvale shareholders. If everything went to plan, the transfer could complete in Spring 2024 and hopefully in time for the rent freeze to immediately start from April 2024.
If transfer does not happen, what will the rent increase be for next year?
Reidvale is preparing to consult on the April 2024 increase in January 2024. If the transfer does not go ahead, then this is likely to be in double figures, given that a 10% assumption was made in the financial plan for this and next year. Only 7% was applied last year meaning that Reidvale is already behind its plan and over the year, like every housing association, we have seen costs continue to rise due to inflation and particularly around contractor costs and wage increases.
Who are Places for People Scotland?
Places for People Scotland’s registered name is Castle Rock Edinvar Housing Association. They have been using the trading name of Places for People Scotland since 2021. Based in Edinburgh, Places for People Scotland was formed by the merger of three housing associations in Scotland with decades of expertise and experience between them. They are a financially strong organisation operating across Scotland and are part of the UK wide Places for People Group.
They are a registered housing association in Scotland, community benefit society, Scottish charity, and registered factor just like Reidvale. They are led by their own voluntary board of Management here in Scotland with their own business plan.
Places for People Scotland are Compliant with all of the Scottish Housing Regulator’s (SHR) Regulatory Standards. The Scottish Housing Regulator refer to a small number of larger housing associations as ‘systemically important’ because of their stock size, turnover or level of debt or because of their significance within their area of operation. Places for People Scotland are considered to be ‘systemically important’ and with this, SHR keep in regular contact with them to maintain a comprehensive understanding of how their business model operates, and how they manage the risks they face. Places for People Scotland’s current SHR Engagement Plan (under their registered name of Castle Rock Edinvar Housing Association) can be accessed here.
They are all about helping communities and the people who live within them to thrive. The team at PFPS are committed to the long-term success of communities and delivering services that allow customers and communities to thrive. You can find out about them on them here.
What would the transfer involve if it eventually went ahead?
The partnership would involve Reidvale transferring all of its interests to the Places for People Scotland. The houses will remain as social housing always.
It is known as a transfer of engagements (ToE) and there have been quite a few of these in Scotland where housing associations have decided they can do more for their tenants by joining with another stronger housing association.
Transfers are not a ‘buy out’ or commercial sale as money does not change hands between the associations. A transfer just allows one community benefit society to legally transfer all of the interests into another community benefit society.
If the transfer takes place, Places for People Scotland would become the housing association for the area but they have committed to keep the local service as “Reidvale”. They would be responsible for the homes and services that Reidvale currently provide. All of your rights as a tenant would be protected and you would not need to sign a new Tenancy Agreement. It would become the factor for our tenement blocks. Our staff team employed at the transfer date would become employees of Places for People Scotland.
How will Places for People Scotland be able to pay for the offer they have made to Reidvale tenants?
When a housing association joins with another one through a transfer, this creates significant savings e.g. there would be no need for a separate Reidvale Management Committee or Director, there would be savings on things like IT cost, consultants, finance services, auditors, lawyers etc as Places for People Scotland already have these. All of these annual savings that generally will occur over the 30 years of the financial plan can then be used to pay for the things that matter most to tenants, e.g. lower rent increases, investment in houses, better services etc.
Will Reidvale staff lose their jobs?
No. All Reidvale HA staff at the point of transfer will become Places for People Scotland employees under the Transfer of Undertaking for the Protection of Employment - TUPE guidelines. This protects their terms and conditions. So after transfer, it will still be the same staff there to look after you but with new leadership and additional expertise from Places for People Scotland.
The five-year rent freeze is brilliant and a relief to my family and I during the cost of living crisis, but what happens to rents from year six?
In the 30-year business plan Places for People Scotland have budgeted for rents to increase by inflation (assumed at 2%) + 1% from year 6 to year 30 of the plan term. This is just what they estimate what will happen as there are lots of things that impact rent setting. There are a number of things that protect tenant’s rents though including:
1. Affordability tests using the Scottish Federation of Housing Associations (SFHA) affordability tool.
2. Regulation set by the Scottish Housing Regulator and any controls applied by the government.
3. Consultation on the annual rent increases with tenants
In the 1970s, local residents fought hard to save the houses and set up Reidvale as a community based housing association. Will this all the lost?
No. Places for People Scotland have spent many months listening to Reidvale tenants and the community to shape their transfer plans to make sure all of the great things from Reidvale’s past are not lost, as well as doing more to do what today’s tenant wants for the future. Places for People Scotland wants to create a new and improved ‘Reidvale’, back to doing the great things it was once famous for.
In addition to the rent freeze and investment programme that will clear the Reidvale investment backlog, Places for People Scotland have committed to:
- Keep the Reidvale name and logo, part of Places for People Scotland
- Set up a new Reidvale Tenant and Resident Focus Group (RFG). Tenants will be back in control of what’s needed locally. This Group will be able to hold Places for People Scotland to account after transfer, monitor delivery of the transfer commitments and shape future services and priorities. This will ensure a strong and firm focus on what Reidvale tenants need and want. They will have their own budget to ‘get stuff done'.
- Keep the local office indefinitely and expand it so that it gets back to being the ‘hub’ for services and community support
- Keep the local staff and give them power to listen to customers and do the right thing with budgets that allow them to ‘get stuff done’.
- Re-open the Reidvale Neighbourhood Centre and get the community café back opened as well as a range of old and new services including a community pantry.
- Introduce new services at the local office (money and fuel advice, , digital support and much more)
- Create opportunities for jobs, apprenticeships, and training for local people through the future in house repairs service and through the investment programme contracts.
Is the transfer a ‘done deal’?
No. It can only happen if tenants support it. We think we have got agreement on a fantastic future for Reidvale tenants and the wider community under Places for People Scotland that would put Reidvale back on the map and give tenants what they deserve. The transfer keeps everything that tenants said is important to them (the name, local tenants back in the driving seat under the new Reidvale Focus Group, the office, the staff team, re-opening the Neighbourhood Centre and café and all of this with a 5 year rent freeze and almost double the investment on Reidvale homes over the same period to catch up on the backlogs that have built up). BUT this can only be delivered if tenant support the transfer and vote YES in the independent tenant ballot that closes on 11 December 2023.
Did Places for People Scotland help get the Reidvale Neighbourhood Centre back open?
Yes. Reidvale were not in a position to do anything directly given the current challenges. They agreed that Places for People Scotland take the lead to work with local groups to get this much used and loved Centre back open. They worked with the successful and respected Bluevale Community Club and together, they were able to reopen the new and improved Neighbourhood Centre and café on Saturday 11th November. This shows the capability of Places for People Scotland and their commitment to Reidvale, regardless of the transfer.
Why can only tenants vote in the ballot?
The formal consultation and ballot are on the proposed change of the landlord. Legislation sets out that both the formal consultation and ballots are only a matter for tenants (including joint tenants) with a secure tenancy. The Scottish Housing Regulator’s guidance on consultation involving a change of landlord can be accessed here.
As with all communications, we will copy all publications to our factored owner and leaseholder customers, shareholders, and key stakeholders to keep everyone in the picture. We are happy to hear from all parties as the process moves forward.
Once the ballot outcome is announced, and assuming this is a YES vote, when would the transfer take place?
After the ballot outcome, there are a number of other processes and consents that are required. We estimate that the earliest the transfer could ‘go live’, with Places for People Scotland then becoming the landlord of the social houses, factor for the factored owner interests, and employer of the local staff team, would be Spring 2024.
Do £1 shareholding members of Reidvale have any say in the transfer?
If tenants vote YES for the transfer in an independent tenant ballot, Reidvale £1 shareholding members would also have a very important role to play. They would have to agree, then confirm a special transfer resolution at two Special General Meetings (SGMs) before the transfer could be registered with the Financial Conduct Authority (FCA). Our current target is for the transfer to be registered allowing a ‘go live’ is April 2024.
What happens to my ‘membership’ of Reidvale if the transfer goes ahead?
If you hold an existing £1 share in Reidvale at the point of transfer, Places for People Scotland will issue you a new £1 share membership in Places for People Scotland (Castle Rock Edinvar Housing Association)
How does Places for People Scotland satisfaction levels and performance compare to Reidvale HA?
Performance information for both landlords can be found on the Scottish Housing Regulator’s website. We have summarised key indicators for both Reidvale and Places for People Scotland which can be found here.
Performance for Places for People Scotland reflects that they serve a much wider tenant base across a range or urban and rural areas. This naturally affects performance. Places for People Scotland have committed to local trades for Reidvale repairs and services (and in house staff through time) and have committed to work to meet and improve on Reidvale performance levels so that local tenants get a great, local responsive service if transfer happens.
Would I need to sign a new tenancy agreement if the transfer goes ahead, and would my tenant’s rights be affected?
No. Your tenancy agreement would automatically transfer to Places for People Scotland and all of your existing rights would be fully protected.
Will the Reidvale factoring service be changed?
If tenants vote for the transfer to go ahead then the role of factor would automatically transfer to Places for People Scotland. Your factoring agreement and all existing rights are protected and any monies owed/due and all liabilities would pass to Places for People Scotland.
Places for People have a large and very experienced factoring service - Residential Management Group who are already a registered property factor in Scotland. They will lead on managing the factoring service for the Reidvale factored owners. They always take a personal, client-focused approach to factoring services, delivering high-quality customer service that includes access to a 24/7 helpline.
If the transfer proceeds there would be a seamless transition of the factoring services that private homeowners receive.
Would Places for People Scotland be able to provide other services to Reidvale tenants?
Part of the Places for People Scotland initial offer is to provide from Day 1 after transfer, access to a range of wider support services including a local Handy Person, Energy and Money Advice and Digital support.
Tenants and factored owners would also have access to a 24/7 customer service centre and on line services.
Will there be any changes to the housing allocations system at Reidvale if Places for People Scotland become the landlord?
There are no plans to change the housing allocation process. All housing associations are required to carry out tenant consultation if they plans any changes to how houses are allocated.
Do Places for People Scotland plan to remove the Warden service currently provided at John Butterly House?
No. Places for People Scotland are fully committed to preserving the services that Reidvale currently offers to tenants at John Butterly House. They also want to listen to tenants on any new services that would support the residents there. As a sign of this, the current vacant Relief Scheme Manager post that had been advertised by Reidvale on a temporary basis is now a permanent post with the agreement of Places for People Scotland.
Would new tenants who move in during the 5 year rent freeze period also see a rent freeze?
New tenants would also have a rent freeze applied. This would be from the start of their tenancy until 2028/29, the same as existing Reidvale Tenants.
If Places for People became the landlord, how would Reidvale tenants and residents participate in local decision-making?
Places for People Scotland will establish a new Reidvale Tenant and Resident Focus Group (RFG) made up of local tenants, residents, and factored owner customers. This will provide a strong local voice on decisions and local priorities. It would monitor the delivery of the transfer promises, and feedback on day-to-day operations and services. A remit and powers of this new group have been agreed with the existing Transfer Focus Group. You can find out more about the Transfer Focus Group here.
How would Places for People Scotland be able to improve how anti-social behaviour is dealt?
Early Intervention
Places for People Scotland carry out a range of measures to stop anti-social behaviour (ASB) from escalating.
They work in partnerships to provide holistic support and this has been recently evidenced in their award for The Outreach Worker Project with Police Scotland Edinburgh Division, NHS Lothian and the Edinburgh Alcohol and Drugs Partnership (CIH 2023). They complete preventative work with Police Scotland, carrying out surgeries with the housing team at community centres, joint walkabouts, days of action. They also see the benefit of getting involved in initiatives that support the local community and try to divert youths away from negative pathways.
They also use Short Scottish Secure Tenancies for new customers who have a history of anti-social behaviour to allow customer a fresh start but ultimately will allow us to act if anti-social behaviour starts at the new address.
They also recognise the importance of working closely with the community and addressing the needs to carry out intervention work to prevent anti-social behaviour escalating.
Enforcement
Places for People Scotland provide a mediation service as a route to stop ASB escalating to severe ASB.
They report that they have a high success rate of enforcement action and take ASB extremely seriously, recognising the need to support affected neighbours alongside enforcement action in order to progress with legal action.
They have a wide range of tools from warnings to notice of proceedings, conversion to Short Scottish Secure Tenancy, Anti-Social Behaviour Orders and ultimately evictions.
Would tenants or housing applicants be able to apply for housing in Places for People Scotland’s other housing stock?
Yes. Applicants can apply as long as they meet the criteria outlined in How to apply for social rented housing
Customers can also register for a mutual exchange from any social landlord.
PFPS allocate all of their properties through choice based lettings systems. This means that when a property becomes vacant, they advertise the property and anyone who is registered with PFPS can place a “bid”, which is a note of interest in the property. When the advert closes each week, PFPS receive a list of everyone who has placed a bid in order of their housing priority, and they allocate the property to the first suitable applicant on the list.
Why are Places for People Scotland interested in Reidvale and what other housing associations do they want to take over?
Places for People Scotland have told us that they want to work with all housing associations, local authorities, government, and charities to share best practice and work together to resolve common challenges. This can be through partnership working, sharing best practice, or formally joining together through something like a transfer of engagement. With Reidvale, it is the latter and they are confident that they can support us with the serious challenges we are facing as a smaller association. They have told us that they do not have any active transfer plans with other housing associations, but they do have the resources and the structure to help those that are struggling.
Who would provide the repairs service after the transfer and how can we be assured that it will be of a high standard?
All existing Reidvale contracts will transfer over to Places for People Scotland at the point of transfer. However, Places for People Scotland will immediately put in place asset management and compliance staff expertise to plan and supervise major work, ensure quality control, and deliver health and safety compliance on all landlord matters.
Places for People Scotland are committed to ensuring the provision of a high quality, well managed, reactive repairs service using local trades. Over time, as current contracts expire, a new local ‘in house’ repairs service would be introduced for some routine repairs. This would ensure a focus on quality and customer care through Places for People’s local directly employed staff. This would save costs through VAT savings and profits being paid to private contractors. The new in house service would also be used support local jobs and training.
There is lots of new Mid-Market Rent (MMR) housing popping up in Dennistoun. Is there a risk that Places for People Scotland could change the social tenancies in Reidvale stock to MMR to make more money?
No. If the transfer happened, all of the current social housing in Reidvale would remain social housing with no plans for Places for People Scotland to change this. The houses were created for that purpose and will remain that way.