Saturday, 25 October 2014

Statutory inquiry ordered into Novas Scarman Group’s finances

Corporation to probe provider’s affairs

The Housing Corporation has ordered a statutory inquiry into the financial management of a prominent provider of housing and support to vulnerable people.

The regulator has appointed auditors from BDO Stoy Haywood to examine the affairs of Novas Scarman Group. The group provides housing and support services to rough sleepers, asylum seekers and ex-offenders in the north west, south west and London. It is currently shifting its emphasis from the direct provision of accommodation to the supply of outreach services.

In a corporation inspection last December, Novas Scarman - then called Novas Ouvertures - was given green lights for viability, governance and management. But the assessors warned it was ‘vulnerable to deterioration’ and its dependence on Supporting People funding was a ‘key risk’.
Novas Scarman has ploughed ‘substantial investment’ raised from the sale and transfer of its properties into the remodelling of hostel Arlington House, according to the corporation. The group told Inside Housing that it was now planning to sell Arlington House to One Housing Group.
The corporation has not yet received the group’s latest accounts, which were due on 30 September.

But Novas’ annual report for 2006/07 showed an operating deficit of £277,000, which it blamed on increasing power costs. The sale of more than £2 million of assets brought it back into surplus that same year. In 2005 Novas sold more than £12.5 million in assets. Turnover in 2007 was down to £22.3 million, from £33.5 million in 2006.

A spokesperson for Novas said it welcomed the investigation and that the group had a ‘robust balance sheet’, with £40 million worth of assets. ‘We are pleased to be able to clarify matters on some areas of our work. This includes the original structure of capital funding for Arlington House, which we are currently redeveloping,’ she said.

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