Campaigners in bid to stall second stage transfer of around 80,000 homes
GHA inquiry could hit transfer deals
A European Commission investigation could affect the transfer of homes from the UK’s largest housing association to smaller organisations.
Glasgow Housing Association and the UK government are being investigated to see whether they broke European procurement law.
It is alleged that the association failed to competitively tender contracts awarded to smaller local housing organisations to manage 57,000 homes and that the government failed to ensure this happened.
The investigation is looking at the management contracts, however it could also affect second stage transfer processes where ownership of GHA’s 81,000 homes is handed to LHOs.
Complainant Sean Clerkin, chair of Glasgow Homeowners’ Campaign, said: ‘I made the complaint to hold up the second stage transfer and this will halt it in its tracks. The people of Glasgow have never been consulted about second stage transfer.’ Mr Clerkin added that he wants a ‘proper debate about social housing in Glasgow’.
The European Union has asked the UK government for more information, which the Scottish Government is preparing with Westminster officials. If the EU does not get a ‘satisfactory reply’ in two months, it can refer the case to the European Court of Justice.
The government could be fined if it does not comply with the ruling and oblige GHA to pay damages to any company which can prove it lost business because of the lack of tendering.
Alex Beal, a commerce solicitor at Lawrence Graham LLP, said it would be ‘prudent’ for GHA to stall negotiations. But she added: ‘A potential repercussion is the [second stage transfer] process might be sped up as it would be difficult for the commission to unwind the decision to transfer.’
Fraser Stewart, director of New Gorbals LHO, agreed: ‘It will not stop it [second stage transfer]; it will speed it up.’
Stock has already transferred to six LHOs and ballots for three more are expected before the end of the year.
A GHA spokesperson said the organisation was ‘absolutely committed to the second stage transfer programme and to its progress’.
A Scottish Government spokesperson said: ‘The possibility of a fine would only arise if we failed to respond appropriately to a ruling by the European Court and clearly, that is unlikely to happen.’
Under EU law, service contracts worth more than £140,000 to local public organisations must be advertised Europe-wide through the Official Journal of the European Union.
In figures
57
Number of management contracts between GHA and LHOs
57,000
Number of homes managed by the LHOs
2,131
Homes transferred by GHA through six second stage transfers this year
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