Housing association borrows millions from massive weapons manufacturer
Published by Max Salsbury for 24dash.com in Housing and also in Finance
Severn Vale Housing Society has borrowed millions of pounds from a massive arms supplier's pension fund.
The social landlord has borrowed £35 million from BAE systems' in a private placement deal - an investment it says will lead to the delivery of 140 new homes.
Defending the deal with the world's second biggest weapons manufacturer, a spokesperson for the 3,785-home provider, said: "While Severn Vale Housing does not have a formal ethical investment policy, all decisions at this level are approved by the board (which includes four customers) who have an objective to develop new social housing."
On BAE's website, the company boasts: "From armoured fighting vehicles and next generation combat aircraft to mine countermeasure vessels and nuclear submarines, we work with our customers from design and build through to preparation and training to ensure military personnel and equipment are ready for deployment."
Responding to Gloucestershire-based Severn Vale's decision, Peter Brown, chief executive of Herefordshire Housing, said: "The minute you enter the financial markets you lose control of your funding. Even the church found that its pension funds were supporting payday lenders. You have to do what you can with your ethical policy and get on with supporting people who need help."
Kevin Williamson, the National Housing Federation's head of policy, said: “Housing associations are strong, stable and independent organisations and represent an excellent ethical investment for pension funds, which are looking for a secure future income for their workers.
“And with funding for affordable housing drastically cut and traditional financing tight, associations must be open to different sources of investment. Their responsibility is to their residents and the community, so it’s crucial they find the means to continue maintaining and building homes and providing vital services.”
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