Don't go changin'

When the Housing Ombudsman received two separate complaints about allocations at Redwood Housing Cooperative, of south-east London, its investigation led it to refer the co-op to the Housing Corporation for regulatory action.

The complaints concerned the allocation of two flats in prime locations, but the story begins before they were even allocated.

At a meeting of the co-op's membership subcommittee, a decision was made to relax the co-op's normal rules specifically for that round of allocations. Four people were present at that meeting: one of them later took part in the allocation of the flats and two were the direct beneficiaries. The subcommittee then met again, this time to agree additional factors to be taken into account when allocating the two flats. There were only two members present at this meeting, both of whom subsequently allocated the flats.

The ombudsman found no justification for the additional criteria devised at the meeting. Not only were most of the criteria not in line with the co-op's published internal transfer policy and procedure but, in the ombudsman's opinion, they were inconsistent, irrelevant and irrational. The consequent allocation decisions were arbitrary and did not reflect stated procedure. The general membership of the co-op was not consulted about the relaxation of the rules. The ombudsman's view was that that constituted an abuse of position on the part of the people who decided to depart from the policy. Only in emergency can there be justification for bypassing the supreme decision-making body – and even then, only provided adequate consideration by the general meeting follows as soon as practical.

The ombudsman also found that the allocations policy lacked precision in its definitions and was therefore prone to subjective interpretation. The absence of points or other system to weigh the applicants' relative priority contributed to the in-built difficulty in achieving fairness. However, its shortcomings did not justify the manner in which these particular allocations were made.

Redwood allocated the two-bedroom flats to applicants who were already living in two-bedroom properties. One of the flats left vacant by these allocations was made available to a third applicant.

The ombudsman was not satisfied that all the successful applicants had an actual need to move – and even where a need had been argued, it was not demonstrated that the successful applicants' need was greater than that of other unsuccessful applicants.

There was also a tension in the allocation process between participation in the co-op's activities and actual need for a transfer. Participation is an essential principle of cooperative living, to which members commit themselves when they join. The investigation showed that the allocation of these flats may have been used as a reward to the successful candidates for their perceived high level of participation in the co-op. The ombudsman considered that such an approach should not have been the dominant factor in assessing who benefits from internal transfers irrespective of actual housing need.

Statements were accepted at face value even though they weren’t backed with evidence

The complaints process
As well as the maladministration in the allocations procedure, the ombudsman expressed concern that the complaint process had been compromised when other co-op members queried what had happened.

At the initial stage of the complaints procedure, one of the complaints was dealt with by one of the subcommittee member who had carried out the allocations. Good practice indicates that the individuals against whom a complaint is made never investigate or take part in a decision affecting its outcome. The co-op's complaints policy enshrined this principle, but it was ignored.

The second stage of the co-op's procedure involved interviews with the people who had made the allocations. However, the details of the allocations were not examined because of an alleged concern for the applicants' confidentiality. Statements were accepted at face value even though they were not backed by evidence.

At the final stage, the complaints should have been considered by the co-op's management committee, but it could not meet because its only members not directly involved with the allocations had already dealt with the complaints at the previous stages. The ombudsman criticised the co-op for not trying to resolve the apparent contradiction between protecting members' confidentiality and ensuring the transparency of the decision-making process.

Conclusions
The officers involved claimed that they tried to act with integrity and to operate fairly. But the co-op could not demonstrate impartiality and consistency when making important decisions, and this caused both the allocations and the complaints processes to fail. The ombudsman found that it was essential that mechanisms be set in place to prevent conflicts of interest from interfering with the adequate management of the co-op.

The co-op's formal response to the ombudsman's preliminary findings was made by the same officers who were at the centre of the dispute. The ombudsman expressed concern that the co-op seemed to continue the same flawed practices identified by the investigation.