THE HERALD can reveal that Carmarthenshire County Council has been engaged in discussions with the Welsh Government and consultants engaged by troubled housing association Tai Cantref to take over the social housing provider.
Confidential documents relating to the plan were received at both Herald Offices on the morning of Wednesday (Apr 13), the same day as a behind closed doors discussion of the matter took place in County Hall, Carmarthen.
While the content of both sets of documents varied they accorded on the central issue: Carmarthen County Council approached the Welsh Government on regarding very soon after it was publicly announced the housing association was seeking a partner for merger.
After that initial approach, we understand that at the beginning of April the Executive Board responded to an enquiry from Tai Cantref representatives and confirmed it would be interested in partnering with the association.
The Herald can confirm, however, that what is contemplated by Carmarthenshire County Council is not a merger of equal partners in an enterprise, but an acquisition by the Council of Tai Cantref’s business and properties as a close fit with the Council’s existing mission to provide affordable housing.
Tai Cantref Housing Association Ltd is based in Newcastle Emlyn and owns 1,477 homes and employs 72 staff.
Despite being based in Carmarthenshire, only 174 of Tai Cantref’s homes are in Carmarthenshire. The remainder are in Ceredigion, Pembrokeshire and Powys, with the overwhelming majority based in Ceredigion.
WHAT HAPPENED AT TAI CANTREF?
Last July, The Welsh Government commissioned external consultants Campbell Tickell to review and investigate three distinct lines of enquiry at Cantref: governance of the organisation, procurement irregularities and HR (treatment of staff). That report was delivered in December and has been kept under wraps ever since.
The investigation arose following ‘whistleblowing’ by either past or current Cantref employees.
A confidential source has claimed to us that the report ‘is damning about the organisation’s culture, governance, treatment of staff.’
Specific allegations had previously been made to The Herald that Cantref was short of money to pay for repairs to its properties and that over £200,000 had been paid to a HR Consultancy to carry out what was described to us as ‘a botched pay review’.
The Herald has been told that Cantref is struggling to find people to take up residence in its new Felinfach development while the student accommodation built in Aberystwyth, and which was intended to fund further projects, has proven a similarly hard sell.
After the report was delivered to the Welsh Government, the Chair of Tai Cantref stood down, shortly followed by the Chief Executive, Lynne Sacale.
An interim Chair, Kevin Taylor, was appointed, while the sister of Carmarthenshire Executive Board member Hazel Evans was engaged as an interim Chief Officer.
Since January, a Carmarthenshire County Council officer, Jonathan Morgan, has been seconded to Tai Cantref. The Herald understands that since the report by Campbell Tickell was received by the Welsh Government, staff from Ceredigion County Council and Bro Myrddin Housing Association have also been involved at different stages.
While the Campbell Tickell report found no signs financial impropriety of any description at Tai Cantref, focussing on issues with the Association’s management regime and controls, a number of lenders are considering withdrawing facilities they have provided to Tai Cantref.
Should those facilities be withdrawn, Tai Cantref would be trading while insolvent.
Information in our possession shows that its lenders have given a Tai Cantref a very short timescale to secure a partner for merger or acquisition.
The Association has previously expressly denied that its search for a partner was anything to do with the report prepared by Campbell Tickell.
THE WAY FORWARD
The acquisition of Tai Cantref by a local authority would be a first in Wales, and is potentially one which requires a redrafting of the rules governing Welsh housing associations.
In addition, there would need to be a very thorough ‘due diligence’ exercise and the approval of the Welsh Government for the acquisition or merger.
Furthermore, The Herald understands that taking over Tai Cantref would entail Carmarthenshire County Council either guaranteeing the Association’s existing borrowing or loaning it money to pay off existing lenders. On checking the legal position, we understand that the Welsh Government may need to consent to such a move – providing the lenders approve it.
On the plus side of the move, the acquisition of Tai Cantref would certainly chime with Carmarthenshire County Council’s rural homes and Welsh language policies.
However, questions arise about partnership with a Council, which, under the previous Labour-led administration, effectively abandoned its own housing estate at Brynmefys, is necessarily a good match for Tai Cantref. It also remains to be seen whether the continuing uncertainty about the future structure of Welsh local government will have an impact on the proposal’s viability.
Even if there was no change in local government in Carmarthenshire, future cuts to local authority spending seem more likely than not. In the latter circumstance, Council Tax payers in Carmarthenshire would be entitled to wonder why they were propping up an Association whose properties were overwhelmingly outside the county.
REACTIONS TO THE HERALD
Cllr Linda Evans, Carmarthenshire’s Executive Board Member for Housing, said: “Carmarthenshire County Council has submitted an Expression of Interest to be considered as a preferred partner to Tai Cantref Housing Association.
“The Council shares many of Tai Cantref’s core values, especially in relation to the Welsh language and affordable rural housing. This would give us the opportunity to work in partnership to develop that relationship and to deliver our vision for quality affordable and social housing.”
Carmarthenshire County Council leader Emlyn Dole, who The Herald believes is passionately behind the potential deal, said: “I would be disappointed if a member of the council has broken their declaration to abide by the National Code of Conduct, and breached this ethical code of behaviour by releasing exempt information.”
The Herald has confirmed to the Council that its story comes from several sources and that councillors have not discussed it with us. A statement from Ceredigion County Council said: “The Council is aware that the Board of Tai Cantref has established a process to select a ‘preferred partner’ as part of the constitutional changes and organisational re-configuration that are being pursued by the association at present.
“The selection of the partner is the responsibility of the Board of Tai Cantref and whichever organisation is selected, we will look forward to working with them in both a strategic and operational capacity in the future to ensure that the interests and ambitions of Ceredigion are promoted.”
A spokesperson for Tai Cantref told us: “Tai Cantref can confirm that following its announcement that it intends to merge with a suitable partner that can complement its business, there has been a great deal of interest from a number of organisations.
“We are currently analysing and working through the detail of what potential mergers would look like and it would be inappropriate to comment on specifics at this time.
“However, the service and support we provide our tenants is our number one priority and at the heart of everything we do. In order to ensure we continue providing the best service possible to our tenants and to grow and develop as an organisation, Tai Cantref considers a merger the best way forward.
“We hope to announce more detail on specific discussions that are taking place in the near future, but in the meantime we will continue to implement changes recommended within a recent review by the Welsh Government, to ensure Cantref is as strong as possible as we engage with potential partners.”
Ceredigion’s Plaid Cymru AM Elin Jones has urged the Welsh Government to step in to ensure that the needs of tenants and the long-term future of social housing in Ceredigion are fully considered in any decision to merge the operations of Tai Cantref with another housing association.
Elin Jones said: “Tai Cantref has a longstanding history in Ceredigion and beyond. The vast majority of its stock is based in Ceredigion. It has strong community credentials and is a fully bilingual housing association.
“Any takeover by a housing association from outside the area risks the integrity and continuity of Tai Cantref’s work. Social housing needs local control, not a takeover by a large company from elsewhere.”
Taken at their face value, it would appear that Elin Jones’s words more than match the aspirations of Carmarthenshire County Council in relation to Tai Cantref.
The Herald understands that more than one expression of interest has been received relating to Tai Cantref and that other potential suitors include another larger housing association.
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