Ownership of 4300 homes handed to staff and tenants in Wales

Friday sees the launch of Wales' largest housing co-operative. Here its CEO explains more

Michael Owen

Michael Owen is CEO of Merthyr Valley Homes Co-operative


On Friday, Merthyr Tydfil will hand control over 4300 former council homes to tenants and the housing association’s 185 employees. Via a new membership body, they’ll have direct responsibility for overseeing repairs, appointing Directors and setting rents and salaries. The resulting organisation – Merthyr Valley Homes – will be Wales’ largest housing mutual, and, along with Rochdale Boroughwide Housing, only the second housing association in the UK to be owned by both employees and tenants.

The move to bring Merthyr Valley Homes into mutual ownership is the product of more than a year of discussions and debates with tenants, employees, community organisations and councillors. With an income of over £20m, the Association is an important player in both the local economy and community in its own right.

The creation of the housing co-operative reflects a changing consensus about the role of councils and central government in providing public services, particularly as budgets have fallen. New models of delivery have emerged to reflect this shift, with housing stock transfers and charities running leisure providing as alternatives to rampant privatisation or outsourcing.

But in the governance models in this new and wider public sector, the staff and service users have too often lacked a voice. Housing has been one of the few exceptions, with many housing associations making impressive efforts to involve service users. Some housing associations have gone even further, creating mutuals where tenants share or even control the power. But very few have found a legitimate way to combine the interests of service users and the interests of employees.

In Wales, there’s a growing determination to create a new Welsh way of doing business and delivering public services. There’s an appetite – reflected in the Welsh Government’s recent “Is the Feeling Mutual” Report – for a new business model which recognises the importance of employees in the dynamic of creating an excellent organisation that serve the public.

I believe that this new model of tenants and employees being members will break down the tired, outdated model of public services being “delivered” to consumers, and the barriers created by the separate roles of landlord/tenant employee/employer.

This is a new coalition between those living in their houses, those working on their houses and local statutory and voluntary bodies supporting the community. Merthyr Valley Homes wanted to bring the people whose futures where linked by the way the organisation worked into the heart of the structure:

  • The tenants who live in our properties
  • The staff who work for the organisation. A member of staff recently retired after 38 years of service and we estimated that he had carried out over 50,000 responsive electrical repairs. They felt that a person who has given his whole working life to the tenants of Merthyr deserved to have a stake in the future and management of that organisation

These new shareholders will exercise considerable influence and will have the power to appoint and dismiss the Board of Directors; they will set the values and the budgets and will approve the accounts and audit report.

The organisation already has strong values on regeneration and employment. It has been a living wage employer since 2011 and has a valued trade union recognition agreement.

In designing the mutual one of the important decisions was that every employee would be an equal member. So Merthyr Valleys Homes does not operate any subsidiaries in which low paid and no pension employees are parked with second tier term and conditions. All employees can join the Local Government Pension Scheme along with other important employment benefits.

The development of the mutual will continue until the go live date on 1st May 2016. There will of course be tensions along the way between rents and salaries.

But in 30 years of housing, I’ve never been to a meeting where tenants talk about wanting housing employees who provide their services to be outsourced and paid the minimum wage. Equally I have never heard frontline employees, many of whom live in social housing themselves, calling for “market rents”. So I am confident that with our colleagues in Rochdale that Merthyr Valleys Homes will be at the forefront of a new way of doing housing, and a better way of doing business.