European threat to Second Stage Transfer

Glasgow’s second stage transfer process is in jeopardy following a European Commission ruling. The powerful European body says that Glasgow Housing Association breached EU public procurement rules because they did not award the service contracts following a proper competitive tendering process.
The Commission has been processing a complaint about this for more than two years and in a release from Brussels on 8 October it said a ‘formal request’ to the United Kingdom concerning the matter is the second stage of the infringement procedure as laid down in Article 226 of the EC Treaty. ‘If there is no satisfactory reply within two months, the commission may refer the matter to the European Court of Justice.’
The Commission considers that Glasgow Housing Association’s ‘Remodelled Management Arrangements (RMAs)’ constitute public service contracts and as such, should have been awarded through an open and transparent tendering process according to Public Procurement Directive 2004/18/EC. Because of the absence of that tendering process, the United Kingdom had failed to fulfil its obligations under the Directive.
The Commission has taken another legal step towards reprimanding the UK by issuing ‘a reasoned opinion’. The British Government has two months to respond. If that reply is unsatisfactory the Commission can refer the matter to the European Court of Justice in Luxembourg with the request for a fine to be imposed.
Sean Clerkin, Chairman of Glasgow Home Owners’ Campaign, who lodged the original complaint against the way the housing stock transfer service contracts were awarded, told the LOCAL NEWS GLASGOW: ‘I am delighted at this news. It means the public service contracts are illegal. Therefore if follows that the whole process of second stage transfer of the housing stock is legally defective too. I am calling on the Scottish Government to halt the second stage transfer process so that all tenants and factored home owners have a real opportunity to take part in decision making in relation to the future of social housing in Glasgow. So far, only senior housing professionals and politicians have been involved. The Commission’s ruling gives the opportunity for all Glasgow citizens to take part in a debate on the future of community ownership of housing in the city. Despite all the legal brains in the Scottish Government trying to stop this happening, the Commission is saying, clearly, the whole process if flawed.’

A spokeswoman for Glasgow Housing Association (GHA) said: ‘The relevant legislation is Section 68a of the Housing (Scotland) Act 2001 . A further amendment relating to RMAs was passed on 29 January 2006. We are aware of the situation. We would like to reassure our tenants that services will not be affected in any way while the matter is being resolved.’