Free advice for Shelter

by Appalled Landlord

8:55 AM, 24th August 2018
About A year ago

Free advice for Shelter

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Free advice for Shelter

Shelter have supported various initiatives to change the PRS so I wondered if I could do the same for them.  The accounts to March 2018 aren’t online yet, so I looked at the previous year’s figures:

Click Here

The total remuneration received by the six directors during the year was £763,446.

There were 1,273 members of staff; some of whom were part-timers; the full-time equivalent was 1,158.  Total staff costs were £39 million, of which £32.6 million was for salaries making the average salary £28,000.

Shelter got donations and legacies of £33.2 million, but it cost £11.0 million to obtain them.  It got £17.9 million for housing advice and support services (mostly from government departments and local authorities, and £2.9 million from the Big Lottery) but spent £37.0 million providing them.

It got £1.1 million for training and publications which cost the same amount. It also £302k, from investments mainly, with a bit from office rental.

Up to there they were £3.3 million in surplus.  They got a bit from shops, see below, but blew £5.9 million on research, policy and campaigning.

The total income was £60.9m, total expenditure was £62.9m, result misery.

Investment income was £972k, so the overall deficit was £1.0m, i.e. they were exactly a million pounds worse off at the end of the year than they had been at the start.

The accounts show that Shelter shops sold goods for a total of £8.5 million. But the staff working in them cost £3.4 million, and “other shop costs” were £4.5 million.  The net contribution was 630k, or 7.43% of sales – seven pence halfpenny in the pound from selling things that were given to them for nothing.

What is the point?  People donating good quality things, and the people who buy them, are mostly just paying for the premises and the 177 staff in them.  Some may think it’s a fruitless exercise or worse, and would prefer to donate to – and buy from – charities that have unpaid staff, or which actually provide beds for homeless people, but I couldn’t possibly comment.

I can however give you, Shelter, the sort of advice that young disrupters have felt free to  give to private landlords over the last few years.:

You are not entrepreneurs.  You have just inserted yourself between the public and the  shops that they want.  Your shops have the extremely high gearing of costs to turnover of 92.57%.  If 8% of donors or buyers of goods stopped donating or buying them, the shops would make a loss.

(I wonder if the 2 million private landlords and their 11 million tenants stopped patronising your shops whether they would exceed the 8% of your customer/donor base.)

It’s not a real business, it’s not sustainable, and it’s time you made way for first-time shopkeepers.  When you decide to phase out the shops, please do so in a gradual and proportionate way.  George Osborne reckons 25% a year is gradual and proportionate.

Now some advice about the £5.9 million you spent on research, policy and campaigning..  You would have been better off you stopped this and minded your own business, and so would tenants.  The more you campaign, the more people are made homeless.

You support Section 24,

Click Here and Click Here

Your new CEO, Polly Neate, was one of three confirmed speakers at the launch, in the Houses of Parliament, of Onward’s widely derided paper in which Neil O’Brien MP recommended disallowing finance costs for private landlords completely for new rental properties:

Click Here

You support 3-year tenancies which the tenant can break at any time, or as you put it “Renters will also have the freedom to find a new place if and when they choose.”

Click Here and Click Here

“when the contract is explained in full and renters know they could leave by giving notice.”

Click Here

And now you are attacking letting agents:

Click Here

Those that haven’t been driven out of business by the fees ban that you take credit for, that is:

“Following years of campaigning, we secured government commitment to ban all letting agency fees faced by private renters in England. This will save private renters an average of £223 every time they move.” This is at the top of page 9 of the 2017 report, which has the amusing heading “Fixing the private rented sector”.

It seems that you actually want to drive decent private landlords out of the market,.  This will make homelessness increase. It is already increasing, as you well know.

Here’s an idea. What about using this £5.9 million instead to buy twenty or so HMO’s around the country each year to house the people on benefits that private landlords have had to evict because they are not charities?  You would then be able to say, for the first time, that you actually provide shelter!

And when tenants fall into arrears – either because they spend the rent money on other things, or because they become subject to Universal Credit – and you try to evict them, and your helpline advises them to ignore all the legal procedures and wait for the bailiffs, you will finally realise what it is like to be a landlord rather than an ignorant disrupter.

What do you say, Polly?



Comments

terry sullivan

11:00 AM, 28th August 2018
About 12 months ago

Reply to the comment left by Luke P at 28/08/2018 - 09:39
contact your local council and complain re CAB--most of their funding comes from lla--or it used to

Luke P

11:20 AM, 28th August 2018
About 12 months ago

Reply to the comment left by terry sullivan at 28/08/2018 - 11:00
I doubt very much that they would care one iota.

Appalled Landlord

12:20 PM, 28th August 2018
About 12 months ago

Now CAB wants restriction on the use of S 21, mandatory 3-year tenancies during which tenants can give one month’s notice, no 6-month break clause for landlords, periodic tenancies to be for 3 years,
https://www.citizensadvice.org.uk/Global/CitizensAdvice/Housing%20Publications/Touch%20and%20go%20-%20Citizens%20Advice.pdf

Monty Bodkin

15:58 PM, 28th August 2018
About 12 months ago

Reply to the comment left by Appalled Landlord at 28/08/2018 - 12:20
From the CAB link;

A new law making it mandatory for landlords to  provide 3 year tenancies is essential if the change is to benefit the tenants who  need it the most: more vulnerable groups, those on the lowest incomes [or reliant on benefits] and families with school-age children>

So how do they think landlords will react 'given the difficulty many tenants face securing a suitable, affordable property'?

Have they thought of the consequences?

"Soaring" rents? No DSS? No kids?
No wonder.

Old Mrs Landlord

18:36 PM, 28th August 2018
About 12 months ago

Thanks for the CAB link Appalled LL, it makes interesting reading. I note that of 230,000 people consulting them on housing problems only 73,000 were PRS tenants yet the report is entirely devoted to private rentals. Like Shelter, the CAB see only the disgruntled tenants, not the majority who are satisfied with their homes, so this necessarily colours their perspective. If Shelter and CAB persuade the government to implement all their demands and recommendations I predict many landlords will simply leave the sector, not being willing to let under terms which tie the landlord in for three years without even an initial probationary period to evaluate the tenant, whilst the tenant can leave at any time with only one month's notice, because "tenants' circumstances change". Well, obviously landlords' circumstances are set in stone and only subject to personal, regulatory or taxation changes once every three years, aren't they? What ridiculous reasoning, especially in view of the avalanche of changes landlords have faced over recent years! If government accede to all the demands and recommendations of these bodies then many more landlords will simply sell up and leave the sector, making it even worse for those who already face difficulty in securing suitable, affordable accommodation. The few landlords who remain under the new terms will certainly be implementing the provision to raise rents annually in line with inflation. Official figures show rents have risen well below the rate of general inflation over the past decade, but once the three-year tenancies are in force landlords will not be leaving rents unchanged for their good long term tenants as frequently happens now.

Appalled Landlord

14:13 PM, 1st February 2019
About 7 months ago

Reply to the comment left by John Walker at 24/08/2018 - 14:55
Hi John

I have now been able to look at Shelter’s latest accounts, for the year to March 2018.

The total income was £67.4m, and the total expenditure was £66.4m. Compared to the previous year, income was up 11% and expenditure was up 6% .

https://england.shelter.org.uk/__data/assets/pdf_file/0010/1595485/Annual_Report_2017-18.pdf

It got donations and legacies of £36.9 million, but spent £11.7 million on obtaining them.

It got £17.3 million for housing advice and support services from government departments and local authorities, and £2.8 million from the Big Lottery, making a total of £20.1 million.

This is analysed in a table on page 65 (digital page 33) of the annual accounts, under a humorous heading: 4. Housing services.
More detail is given on pages 80/81 (digital page 41). Shelter got amounts totalling £1m from councils in each of the following cities: London, Sheffield and Birmingham.

However, Shelter spent £40.0 million providing ”housing” services. You have to work this figure out for yourself - the cost is split into 6 categories but there is no sub-total. It’s almost as if they don’t want you to know.

Shelter shops sold goods for a total of £9.0 million. But the staff working in them cost £3.6 million, and “other shop costs” were £4.8 million. The net contribution was 532k, or 5.95% of sales - less than six pence in the pound from selling things that were given to them for nothing.

It got £1.2 million for training and publications which cost £0.9million. It also got £272k, from investments mainly, with a bit from office rental.

It spent £5.3 million on research, policy and campaigning.

Broadly speaking, the net donations and legacies of £25.2 million were spent as follows:
Half of the cost of so-called housing services £20m
Campaigning to drive private landlords out of the market and increase homelessness £5m
Housing anybody at all £0

Remuneration for the seven directors was £606,407, making an average of £86,630.

In July 2017, the month before Neate and Beales joined Shelter, the Director of Finance resigned. His replacement resigned in February; her interim replacement resigned in April. In May a permanent director was appointed, for the time being.

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