Wheatley, the parent company of Scotland’s largest social landlord Glasgow Housing Association (GHA), will become a 50-50 joint owner and partner in City Building Glasgow, the council’s wholly-owned subsidiary.
The joint venture proposal is expected to be approved by Glasgow City Council’s executive committee on 3rd March. The Wheatley Group board has already signed it off.
The JV will deliver a £33m-a-year repairs service for Wheatley. It will also be responsible for GHA’s £27m annual capital investment programme and the city council’s own repairs, worth £30m annually. This makes a total of £90m a year.
Glasgow City Council leader Frank McAveety said: “This deal is a hugely important step that secures jobs, apprenticeships and training places, and future investment for the city. It will guarantee 30 years of work, worth £2.7bn, in challenging economic times and generate a further £225m for the city’s wider economy every year.
“Wheatley Group’s investment demonstrates how our partnership has worked over the past 13 years and the group’s complete confidence in City Building to continually deliver the quality and service they expect.”
GHA took over Glasgow City Council’s entire housing stock 15 years ago. City Building won what was then GHA’s five-year repairs contract, with an optional four-year extension, in 2009. The extension was exercised by Wheatley, GHA’s (new) parent organisation in 2013.
Last year, with two years of the contract to run, Wheatley’s strategic development committee commissioned an independent options appraisal. Consultant Campbell Tickell was appointed to lead the review.
In December 2015, the Wheatley board approved a recommendation from Campbell Tickell to take forward two options for further examination: taking the service in-house and forming a JV with City Building.
Campbell Tickell’s subsequent report concluded a JV offered Wheatley better value for money, avoiding start-up costs and reducing risk.
At its board meeting on Wednesday 24th February 2016 Wheatley accepted the Campbell Tickell recommendation, accepted by Wheatley’s strategic development committee, to “proceed to detailed due diligence and negotiation of the joint venture with GCC”.
Wheatley Group chair Alastair MacNish said: “In the months ahead, we will work through the detail of how the JV will operate, aiming to have everything in place to proceed in 2017.”
Trades unions have lobbied city councillors to support the deal, to keep the service in the public sector. “It is hoped such ventures are the future of social housing maintenance in this country,” said Ucatt regional secretary Harry Frew.
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