LETTER: Homes before risks at Circle 33

From Mr Donald Hoodless

Sir: Your article "Homes charity plans derivatives venture" (11 September) is misleading. Circle 33's committee of management discussed for the first time last week the possibility of using derivatives to reinforce its risk management strategy. It is yet to make any decision.

It will consider a proposal to make a rule change that itself will comply with Housing Corporation guidance. If this is agreed, it would then be put to the whole membership of Circle 33 Housing Trust, and finally would require the approval of the Housing Corporation. This process would take time and a decision would be made only after careful deliberation.

If we concluded this process, we would be able to use derivatives to minimise the risk on our borrowings. This would not enable us to trade in derivatives. The comparison with Orange County and Hammersmith and Fulham, which did just that, is unfounded.

Circle 33 has reached a pre-eminent position with a successful track record going back 28 years. It currently provides nearly 10,000 homes. It has achieved that position by being cautious but businesslike. It is risk-averse and prudent and has no intention of altering that strategy.

We firmly believe in accountability. A code of governance for housing associations entitled Openness and Accountability has been adopted in full. We will continue to provide quality homes and quality services.

Yours faithfully,

Donald Hoodless

Chief Executive

Circle 33 Housing Trust

London, N5

11 September