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:

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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,

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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:

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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.”

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

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And now you are attacking letting agents:

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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?

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