Pentlepoir development: A Mill Bay Homes project

ROYTSTON JONES, the blogger who has published a series of exposés regarding Welsh local government and housing policy on his blog jacothenorth.net, has been threatened with legal action by Pembrokeshire Housing Group and its subsidiary Mill Bay Homes.

The threat follows a series of posts on Mr Jones’s bog referring to the status of Mill Bay Homes and an allegation that there was something amiss in its constitution and relationship with the other members of Pembrokeshire Housing Group, which includes the Pembrokeshire Housing Association.

In addition, Mr Jones made a post alleging impropriety in a property transaction and a further allegation that the construction of a property had caused damage to a neighbouring home. Mill Bay Homes has denied both allegations and says they are without foundation.

The offending posts have been removed from jacothenorth.net.

The jacothenorth blog has been a goad to housing associations in Wales, which Royston Jones has claimed are not delivering the housing Wales needs and which are too often concerned with developments which have little to do with the delivery of their original objectives.

On Wednesday (Jun 8) Herald Deputy Editor Jon Coles met with Pembrokeshire Housing Group Chief Executive Peter Maggs to clarify those questions raised by Royston Jones regarding the relationship between Mill Bay Homes and Pembrokeshire Housing Association.

Peter Maggs told our reporter: “The Pembrokeshire Housing Group is made up of three organisations. Those are Pembrokeshire Housing Association, West Wales Care and Repair, and Mill Bay Homes.

“Pembrokeshire Housing Association has provided around 2,500 affordable homes to rent as a Registered Social Landlord (RSL). It has built properties that range from 1 bedroomed flats to 4 bedroomed houses.

“Pembrokeshire Housing Association is the parent of the group. It is an independent not for profit organisation, which means that any surpluses generated can only be applied within the business, for example to build new homes.

“West Wales Care and Repair, before we took on Ceredigion it Pembrokeshire Care and Repair, is also an RSL. It is also charitable and provides housing support for the elderly and disabled – not only to Housing Association tenants – to enable them to remain in their own homes.

“Mill Bay Homes is not founded on charitable purposes. It was originally registered as Pembrokeshire Housing 2000 Ltd in 1998 but remained dormant until 2012, when it was renamed Mill Bay Homes Ltd.

“Mill Bay Homes competes with other developers in terms of price and quality, but the significant difference is that it is a business with a social purpose. The surpluses it generates are covenanted back to Pembrokeshire Housing Association and applied to fulfil the charitable objects of the Housing Association; namely, the provision of affordable social housing to rent.”

We asked whether Mill Bay Homes itself was a provider of affordable housing.

“No. Mill Bay Homes in itself does not provide what might be defined as ‘affordable housing’. It does not provide affordable rented accommodation, as does Pembrokeshire Housing. Its slogan is ‘Affordable Prices, Quality Living’, but it has to compete in the open market. Some of its properties may be defined as affordable homes under Section 106 planning agreements.

“In simple terms, within the Pembrokeshire Housing Group there are three distinct ‘businesses’, if I may use the general sense of the word: Pembrokeshire Housing Association – charitable; West Wales Care and Repair – charitable; Mill Bay Homes – builds and sells properties onto the market.”

Bearing the surpluses generated by Mill Bay Homes, if any, we asked how those were applied.

Peter Maggs said: “Those surpluses go straight back to the parent, Pembrokeshire Housing Association, which applies them for the construction of affordable homes to rent and the acquisition of land for the construction of affordable homes. Any surpluses are not used for the commercial purposes of Mill Bay Homes.”

Regarding the controversy involving the jacothenorth blog, we asked why Mill Bay Homes was set up.

“It was a reaction to the crash and the austerity programme followed by Government.” Peter Maggs told us, “It was activated as a way to generate additional funding. There was a restriction in the Social Housing Grant, which Housing Associations use along with private mortgages, to build their new properties.

“We saw it as a mechanism as addressing areas of housing need which Pembrokeshire Housing, as a charitable organisation could not address, and to be an opportunity to generate additional income to supplement the reduced availability of grant from the Welsh Government.

“All three parts of the Pembrokeshire Housing Group are regulated by the Welsh Government, and before we activated Mill Bay Homes we checked with the Welsh Government whether the activities of Mill Bay Homes would be lawful and within its powers. We were given the all clear.

“Our first two projects as Mill Bay Homes targeted first time buyers and older home buyers, who might be looking to downsize.”

So, had the project been successful in resolving the issues presented by the reduction in the Social Housing Grant?

“Yes. Returns take some time to come through. We have to buy the land, build the properties, sell the properties. It made a small surplus ahead of the schedule in its business plan – which is challenging – and in 2015/16 will deliver a surplus of over £1m to Pembrokeshire Housing to supplement the Social Housing Grant and invest in affordable housing.”

As the surplus would appear to be a substantial enhancement to the Social Housing Grant, we asked what effect that would have on the amount of social housing investment made by the Housing Association.

“The amount of Social Housing Grant from the Welsh Government has been £1.5m per year, and is forecasted to remain the same for the next two years. You can see how valuable Mill Bay Homes is to the delivery of affordable rented accommodation in Pembrokeshire.

“The target is to deliver £1m of surplus for each of the next five years.”

In his latest post, Royston Jones has said he is seeking further clarification of Mill Bay Homes’s returns to the Financial Conduct Authority and continues to illustrate the pitfalls of public money being confused with enterprises for private profit.

He continues: ‘I am not for one minute suggesting that this is the sort of thing that happens between Pembrokeshire Housing and Mill Bay Homes, I merely use it as a warning of the kind of problems that can arise when a publicly-funded body sets up subsidiaries or ‘trading arms’.’