Skip to content or view mobile version

Home | Mobile | Editorial | Mission | Privacy | About | Contact | Help | Security | Support

A network of individuals, independent and alternative media activists and organisations, offering grassroots, non-corporate, non-commercial coverage of important social and political issues.

Pavilion facing bankruptcy?

Keith Parkins | 17.04.2008 15:43 | Repression | Social Struggles | Workers' Movements | Liverpool | South Coast

The Housing Corporation has admitted that at least ten housing associations are facing bankruptcy in the growing credit crisis. Is Pavilion Housing Association one of this select group?

'We have used the overvalued home like an ATM [cash] machine, and in doing that we have taken debt loads up to record highs.' -- Stephen Roach, former chief economist at Morgan Stanley

We are in the midst of a full blown banking crisis, the banking system is in meltdown, with the taxpayer expected to bail out the banks, even though it was their unfettered greed that got them into the mess in the first place.

 http://www.indymedia.org.uk/en/2008/03/394333.html

The latest scam is asset swap. Smoke and mirrors. The Treasury provides the banks with government bonds, underwritten by the long suffering taxpayer, in return we get the worthless debts the banks want to be shot of.

 http://news.bbc.co.uk/1/hi/business/7352008.stm

Home owners are seeing their inflationary gains melt away, like snowflakes on a hot sunny day, as property values plummet, as we head towards the great property crash of 2010.

The US economy has already gone into recession. Contrary to what we are told by Gordon Brown, the UK economy is in a worse position, as it is more dependent on house prices than the US economy.

Pavilion is going through a process of sweating its assets, seeing what land can be sold off, redeveloped.

 http://www.indymedia.org.uk/en/2008/04/396672.html

Redeveloped does not mean build more social housing or meet an identified social need, it means whatever will maximise returns, which means private housing for sale. Most likely flats, as then the new owners can be milked via extortionate service charges.

Housing associations have borrowed to the hilt to finance lavish lifestyles, fat cat salaries and empire building, the tenants have kindly serviced the debt. They were able to do this whilst property was rising in value, in the same way that householders have been able to use their rising house values as their own personal cash cow. With falling property values there is going to be one big hard crunch. That is one reason why housing associations wish to remove secure tenancies, as at stroke their property portfolio is re-valued upwards.

The Housing Corporation recently found Pavilion to be wanting in the areas of development and governance and downgraded their status.

 http://www.housingcorp.gov.uk/upload/pdf/First_Wessex_Housing_Group_Limited_HCA.pdf

Local councillors have said their status could sink lower, based on their performance.

Tenants and leaseholders are none too happy with their performance.

 http://www.indymedia.org.uk/en/2008/04/396006.html?c=on

A few years ago a massive black hole opened up in the Pavilion accounts. It was the end of the financial year and they had a huge tax liability which they were unable to pay. They, or rather their tenants, were faced with a stark choice, either a massive cut in services or a sharp hike in rents. Many tenants could be forgiven for thinking, was that that not the position already. A cut in fat cat salaries was not an option. Questions put to Pavilion by myself and a chartered accountant, they were unable to answer. They said they'd get back to us but never did. Confidence in their financial probity sank even lower. Pavilion then implemented a tax avoidance scam, they turned themselves into a charity, which at a stroke, wiped out their tax liability. But you can only pull that stunt once.

Questions have been raised in the past regarding the financial soundness of Pavilion when they used lack of money as an excuse for not carrying out repairs.

The Housing Corporation (the industry regulator) has identified up to 10 housing associations which are facing a 'heightened risk' because of their exposure to a downturn in the property market. They do not say which. But do say with plummeting property prices and the increasing reliance on asset stripping to stay afloat, some associations have less than 20 months of credit in place. Or put simply, in 20 months they will run out of liquidity, be unable to pay their way, or in other words, bankrupt.

With an ever tightening credit squeeze, with banks unwillingly to lend to each other, are they going to be willing to lend to or bail out a housing association with a bad reputation?

Falling property values forces more property onto the market, which in turn further depresses property prices, until eventually forced into a fire sale to keep afloat.

What happens if a housing association goes bankrupt?

These are private companies, lack of accountability has led to poor management. Bankruptcy is a very real possibility.

Which raises the question, all things being considered, is Pavilion one of the housing associations that has been identified at risk?

The Housing Corporation is refusing to name the housing associations it has identified at risk.

Could it be a housing association near you?

More on Pavilion:

Pavilion threaten critics
 http://www.indymedia.org.uk/en/2008/04/396759.html

Pavilion gets greedy
 http://www.indymedia.org.uk/en/2008/04/396672.html

Pavilion asbestos scandal
 http://www.indymedia.org.uk/en/2008/04/396456.html

Pavilion – the new slum landlords
 http://www.indymedia.org.uk/en/2008/04/396006.html?c=on

Keith Parkins

Comments

Hide the following comment

On the breadline?

18.04.2008 13:32

Could Wulvern Housing in Crewe and Nantwich be another who is at risk?

For some years they have had money to spend on company cars and staff junkets. Of late they have given employees expensive mobile phones. This, when maintenance on properties gets left and tenants are told that they will have to fund items themselves. Elderly tenants who cannot use a bath, they are unable to get in it, are told that they can have a shower fitted but they will have to pay for it themselves.

An Audit Commission report done in November 2004 gave them a poor rating. Failing to address the needs of elderly people was one of the areas they were found to be woefully lacking. Fours years later - no change. They have managed to find money for the cars and phones, plus numerous junkets and large pay rises though.

Anyone know who the housing associations are that have been marked as doubtful by the HC?

Jolly Roger


Upcoming Coverage
View and post events
Upcoming Events UK
24th October, London: 2015 London Anarchist Bookfair
2nd - 8th November: Wrexham, Wales, UK & Everywhere: Week of Action Against the North Wales Prison & the Prison Industrial Complex. Cymraeg: Wythnos o Weithredu yn Erbyn Carchar Gogledd Cymru

Ongoing UK
Every Tuesday 6pm-8pm, Yorkshire: Demo/vigil at NSA/NRO Menwith Hill US Spy Base More info: CAAB.

Every Tuesday, UK & worldwide: Counter Terror Tuesdays. Call the US Embassy nearest to you to protest Obama's Terror Tuesdays. More info here

Every day, London: Vigil for Julian Assange outside Ecuadorian Embassy

Parliament Sq Protest: see topic page
Ongoing Global
Rossport, Ireland: see topic page
Israel-Palestine: Israel Indymedia | Palestine Indymedia
Oaxaca: Chiapas Indymedia
Regions
All Regions
Birmingham
Cambridge
Liverpool
London
Oxford
Sheffield
South Coast
Wales
World
Other Local IMCs
Bristol/South West
Nottingham
Scotland
Social Media
You can follow @ukindymedia on indy.im and Twitter. We are working on a Twitter policy. We do not use Facebook, and advise you not to either.
Support Us
We need help paying the bills for hosting this site, please consider supporting us financially.
Other Media Projects
Schnews
Dissident Island Radio
Corporate Watch
Media Lens
VisionOnTV
Earth First! Action Update
Earth First! Action Reports
Topics
All Topics
Afghanistan
Analysis
Animal Liberation
Anti-Nuclear
Anti-militarism
Anti-racism
Bio-technology
Climate Chaos
Culture
Ecology
Education
Energy Crisis
Fracking
Free Spaces
Gender
Globalisation
Health
History
Indymedia
Iraq
Migration
Ocean Defence
Other Press
Palestine
Policing
Public sector cuts
Repression
Social Struggles
Technology
Terror War
Workers' Movements
Zapatista
Major Reports
NATO 2014
G8 2013
Workfare
2011 Census Resistance
Occupy Everywhere
August Riots
Dale Farm
J30 Strike
Flotilla to Gaza
Mayday 2010
Tar Sands
G20 London Summit
University Occupations for Gaza
Guantanamo
Indymedia Server Seizure
COP15 Climate Summit 2009
Carmel Agrexco
G8 Japan 2008
SHAC
Stop Sequani
Stop RWB
Climate Camp 2008
Oaxaca Uprising
Rossport Solidarity
Smash EDO
SOCPA
Past Major Reports
Encrypted Page
You are viewing this page using an encrypted connection. If you bookmark this page or send its address in an email you might want to use the un-encrypted address of this page.
If you recieved a warning about an untrusted root certificate please install the CAcert root certificate, for more information see the security page.

Global IMC Network


www.indymedia.org

Projects
print
radio
satellite tv
video

Africa

Europe
antwerpen
armenia
athens
austria
barcelona
belarus
belgium
belgrade
brussels
bulgaria
calabria
croatia
cyprus
emilia-romagna
estrecho / madiaq
galiza
germany
grenoble
hungary
ireland
istanbul
italy
la plana
liege
liguria
lille
linksunten
lombardia
madrid
malta
marseille
nantes
napoli
netherlands
northern england
nottingham imc
paris/île-de-france
patras
piemonte
poland
portugal
roma
romania
russia
sardegna
scotland
sverige
switzerland
torun
toscana
ukraine
united kingdom
valencia

Latin America
argentina
bolivia
chiapas
chile
chile sur
cmi brasil
cmi sucre
colombia
ecuador
mexico
peru
puerto rico
qollasuyu
rosario
santiago
tijuana
uruguay
valparaiso
venezuela

Oceania
aotearoa
brisbane
burma
darwin
jakarta
manila
melbourne
perth
qc
sydney

South Asia
india


United States
arizona
arkansas
asheville
atlanta
Austin
binghamton
boston
buffalo
chicago
cleveland
colorado
columbus
dc
hawaii
houston
hudson mohawk
kansas city
la
madison
maine
miami
michigan
milwaukee
minneapolis/st. paul
new hampshire
new jersey
new mexico
new orleans
north carolina
north texas
nyc
oklahoma
philadelphia
pittsburgh
portland
richmond
rochester
rogue valley
saint louis
san diego
san francisco
san francisco bay area
santa barbara
santa cruz, ca
sarasota
seattle
tampa bay
united states
urbana-champaign
vermont
western mass
worcester

West Asia
Armenia
Beirut
Israel
Palestine

Topics
biotech

Process
fbi/legal updates
mailing lists
process & imc docs
tech