Monday, 11 August 2003

How not to run a business

The transfer of ownership of council houses from the local authority to a housing association has run into trouble in the Borders:
Board members of the Scottish Borders Housing Association (SBHA) will be told tonight that a variety of financial and operational issues are having a "serious negative impact" on the association’s business plan.

A report to be considered at the meeting says: "In view of the extent and severity of the adverse impacts on the business plan since transfer, it is not certain that revised business plans can accommodate the resultant additional costs and still enable SBHA to meet all commitments."

The bill for the Scottish parliament building is now expected to be more than ten times the original estimate. The Scottish Executive has underspent its budget for the past year by some £500 million without quite knowing how. So it's no real surprise to learn that local bureaucrats are no more competent down in the Borders. They've underestimated the need for house repairs, made "incorrect calculations" in the housing association business plan and now discover that more houses are empty than expected. Well, these things happen with business plans - not that we are talking about a real "business", of course. But how on earth can they forget to allow for the cost of their own head office? I don't suppose that they could forget about the new HQ and move the tax-consumers into the empty houses.

I also note that the 6,728 council houses were transferred to the housing association for £3,469 each, with further expenditure of £10,969 per house planned over the next ten years. The taxpayers are getting less than £4,000 per house and yet the housing association can't cope financially, although its chairman was "confident the problems could be overcome with the assistance from the Scottish Executive." Well, duh - whose couldn't?

This whole affair stinks. The Borders Council should just give the houses away to the tenants and let them pay for future repairs and maintenance. Yes, we taxpayers would have been ripped-off yet again, but enough is enough: end the dependency culture now and make a fresh start.