16/10/01.
"Councils bail out housing group hit by £8m
debts."
By George Wright.
EMERGENCY measures are being taken by councils to save
thousands of people from homelessness in north London after
the collapse of a major housing association with up to
£8 million debts.
West Hampstead Housing Association (WHHA), whose founder
Anna Bowman has close links with the Labour Party, has
crashed. In Camden, where the association manages 190 homes,
the council has been forced to find £300,000 to keep it
running in the short term.
In Haringey, where more than 460 households are affected,
the council said it had "renegotiated" its contract with the
association to enable it to continue housing its tenants at
least until the end of this financial year. The council
could not say how much extra cash is being paid. Similar
action could be needed in Brent, where 440 families are in
WHHA-managed properties.
Camden's leader, councillor Jane Roberts, said the
authority had been forced to bail out the association as the
"lender of last resort". She said:"We're in an appalling
situation."
Council executives met last week to discuss the crisis
and to reassure anxious residents they would not be thrown
out on to the streets.
Details of the rescue package were released minutes
before the meeting in an abridged report. The full report is
to be kept secret, says the council.
Camden decided to make the £300,000 offer even
though the association is in such a dire financial state
that there can be no guarantee the money will ever be
repaid. Also, in a move branded "obscene" by some
councillors, dozens of houses which Camden sold at discount
to the association, and which were refurbished with public
money, are to be auctioned to help the association meet its
debts - conservatively estimated at between £6 million
and £8 million.
Councillors also voted to set up an inquiry into the
crisis and to demand a meeting with Housing Minister Lord
Falconer. Camden will ask him for assurances the
£300,000 will be repaid and tenants will not be made
homeless.
Earlier, WHHA residents told councillors they had been
warning the council of the coming crisis for years.
Opposition councillors said Labour had " chosen to ignore or
bury the evidence".
A Camden council spokesman said: "We only found out about
this in the last week. It is not correct we knew about it
for months. We had no reason to believe there were serious
problems." However, signs that WHHA was in difficulties
emerged as early as last September, when the company failed
to produce its annual accounts. The Housing Corporation
placed WHHA "under supervision", suspended all funding and
appointed four board members who effectively took it over.
In December Anna Bowman was forced to resign from her
£65,000 post as chief executive and Paddington Churches
Housing Association (PCHA) was brought in to run WHHA
rentals. PCHA has refused to bail out WHHA and Camden is
hoping to find another housing association to merge with
WHHA and safeguard tenants.