Two recent SHN podcasts have seen well-known housing figures commenting on the recent decision of Reidvale HA’s shareholding members not to ratify the outcome of the tenant ballot on transferring to Places for People Scotland.

Evident from the comments is an apparent misconception that housing association tenants and members are mutually exclusive groups – something that couldn’t be further from the truth. But the discussion has certainly reminded us that in legal terms, shareholders have some very distinct roles and powers.

In the Reidvale case, 90% of the members who took part in the shareholders’ vote were themselves tenants, with 7% being factored owners and 3% others (including a very small number from outwith the area). That instantly crushes the notion put forward in the podcasts that (a) non-tenants and (b) ‘outsiders’ had an undue influence in rejecting the tenant ballot.

It seems ironic to me that these suggestions of ‘outsider influence’ came precisely when tenants themselves were starting to voice real concerns, across both votes. Even more ironic when you consider that the takeover push has been driven almost entirely by outsiders – SHR-recommended co-optees on the Committee, consultants in key management and ‘advisory’ roles, and even an Independent Tenant Adviser who came out in favour of the takeover.

More broadly, the Reidvale case has reawakened interest in the concept of housing association membership – interest which has steadily diminished over time, mostly for very understandable reasons:

• Many longer-standing tenants aren’t even sure whether they’re members or not. This isn’t necessarily an association’s fault. Yes, you’re a member if you pay your £1 – in most cases at the beginning of a tenancy – but your membership ceases if you fail to turn up or give apologies for five AGMs in a row
• ‘Selling’ the benefits of membership isn’t easy – OK there may be cake and a guest speaker at the AGM, and you have to be a member if you want to stand for committee/board, but is that really enough for most people?
• If an association works especially hard to boost its membership, it increases the risk of not achieving quorum at the AGM - most commonly 10%

The historically low yes vote (61.8%) at Reidvale was already evidence of significant doubts among tenants, and it seems that these doubts grew markedly in the lead-up to the membership vote. And whilst technically the members overruled the tenants, they were pretty much the self same people, and this is largely the case across the wider Scottish housing association sector.

So we’ve seen the role of shareholders brought into sharp focus, and it has demonstrated too why takeovers are subject to two votes. The second vote takes on particular importance in any cases (such as with Reidvale) where the tenant ballot result has been unconvincing. Sometimes the law really does do its job!

The podcast episodes mentioned above can be found here:

• Podcast: Reidvale and the role of tenants in stock transfers with Paul Sweeney MSP and Lesley Baird
• Podcast: Craig Stirrat