2nd opinion: Boards are worth more than this

In September 2001, at the Housing Federation conference in Birmingham, a senior officer of the Housing Corporation told me that the corporation's guidelines on paying board members of housing associations was about to be published.

Now, 14 months later, the corporation is just issuing a consultation paper with a three-month consultation period. We can assume that after the consultation period there will be months of deliberation before a decision is announced. To say that the corporation has been moving at a snail's pace on this matter is insulting to snails.

The paper gives the impression that the corporation has decided to introduce payment and is simply consulting on the modus operandi, but at the end it says: "After completing the consultation process we will publish a summary of responses and consider whether and how to introduce the new regime." So has the corporation taken a decision? And how long is it going to take to make up its mind?

The corporation lays out conditions designed to ensure that no board that complies with them will be able to reach a decision to pay. Boards have to "make a business case demonstrating how payment would improve the quality of governance and why it would be in the interests of the association and its residents to use funds in this way". The next paragraph goes on to say that associations must "show there is some problem or barrier with the current governance arrangements that only payment will be able to overcome".

So, if a board has been functioning for years unpaid, the association will have to make a case for payment by, for example, threatening the entire board will resign unless a payment regime is introduced. Here are some more realistic cases associations could make:

• the size and complexity of housing associations has grown considerably in recent years, making increased demands on board members' time
  
• with this growth, board members' responsibility has grown
  
• housing associations are being urged by the corporation to diversify their activities and in so doing often have to adopt a group structure to protect their stock against commercial risks; this inevitably involves more responsibilities for board members
  
• public bodies, such as NHS trusts and the Housing Corporation itself, pay fees to board members, so why bar the payment of housing association board members?

Taking all these matters into account, it is inequitable to expect housing associations to continue to rely on unpaid board members. Paragraph 2.13 of the consultation paper contains more evidence of the corporation's equivocation on this subject: "We will not expect the association to submit its business case to us for scrutiny before it starts paying, but will expect it to tell us that it plans to pay, has a business case that confirms to this guidance, and has a payment regime that meets our criteria. We will also expect it to have published the plan and sought residents' views."

The guidelines should acknowledge the valuable role of voluntary boards, rather than assume members are only out to make money

So, in theory, the association is free to pay but has to produce, retrospectively, an elaborate justification for doing so. How will this work? Will it have to give details of the business case and explain how the payment regime conforms to the corporation's criteria? If the corporation disapproves will it require the association to cut payments?

The corporation's recent publication, The Way Forward – Our Approach to Regulation, expressed its intention of moving towards self-assessment that would "lead to our relationship with successful associations becoming less intrusive". But the issue of paying board members involves the strong likelihood of the corporation scrutinising an association's affairs. This is not compatible with the new regulatory regime.

The tone of this paper is very unpleasant. Its premise is that board members are eagerly awaiting the corporation's go-ahead for them to become fat cats. It imposes as many hurdles as possible before boards can pay their members – people who, in many cases, have given years of time and expertise freely in the public interest.

But the insult goes further, asking after each section whether the approach strikes the right balance or is robust enough. In other words, the corporation – which has done its best to shackle boards that would like to pay themselves modest fees – is inviting them to devise even more fiendish shackles for themselves. Boards of the larger associations are trusted to manage the affairs of organisations that house many thousands of people and turn over millions of pounds of public money but the corporation does not seem to trust them to decide on a suitable level of remuneration.

The paper says we must seek residents' views on it. Are we supposed to seek a referendum on the subject, which would be a costly exercise for a large association?