What went wrong?

Three Valleys Housing was still reeling from its board’s decision to suspend its chief executive and finance director when the Tenant Services Authority swooped in and placed it under supervision last week.

For months the association had been beset by rumours of disenchanted staff, unease among senior managers and disgruntled board members. Murmurs of discontent grew louder once news got out that the TSA had requested a governance review of the organisation last September and by the time Inside Housing obtained the results of a staff survey that complained about a ‘bullying management culture’ at TVH, it was clear the organisation faced major problems.

The difficulties plaguing the housing association are not a new phenomenon, however. Seven chief eecutives have taken the reigns during the organisation’s eight-year history, meaning it has rarely enjoyed long-lasting periods of stability.

TVH was registered with the Housing Corporation in March 2002, after tenants of Erewash Council voted to transfer its 5,800 homes to the new landlord. Just half an hour’s drive away in Burton upon Trent, Trent and Dove housing association had been set up months earlier, to transfer an almost identical number of homes from East Staffordshire Council. Since then, Trent and Dove has enjoyed a stable and prosperous period, being awarded a ‘green light’ for viability by the now defunct Housing Corporation, while TVH has slipped into its second spell under supervision.

With two housing associations starting life in similar situations but ending up on very different sides of the spectrum, it begs an obvious question. What went wrong at TVH?

The Housing Corporation first intervened in April 2006, placing the association under supervision because of concerns about its governance and financial viability. At the time, TVH had been without a chief executive for more than four months, after previous chief executive Kanwaljit Singh left in December 2005. Inside Housing has spoken to several people close to the situation who stress that alarm bells began to ring long before the regulator began to show an interest the first time round.

Sources claim TVH was doomed to struggle from the outset after the cost of its first regeneration scheme on the Hopewell Farm estate spiralled from a planned £7 million to around £24 million, putting extra financial pressure on the fledgling organisation.

In a May 2006 assessment of the association, The Housing Corporation noted that the Hopewell Farm project had been a ‘significantly difficult’ part of TVH’s regeneration activity, which was reflected in its revised 30-year business plan published in March that year.

‘There have been problems there since the very first day of the transfer,’ claims Anthony Clark, an original council tenant and former board member at TVH. ‘I was one of the tenants to vote against it. The figures on the money side never added up and we were left with extra costs on top of our business plans. On day one the business plans went out of the window and the association didn’t start off on the right foot.’

Problems continued to pile up after the association was handed a zero-star rating by the Audit Commission in January 2007. TVH was rated as ‘poor’ with uncertain prospects for improvement, failing in areas of customer care, diversity and value for money.

Just when some were beginning to question the housing association’s future, it enjoyed something of an upturn in its fortunes. In 2008, a re-inspection by the Audit Commission awarded a one-star rating to TVH, stating it had ‘fair service’ and more importantly, ‘excellent prospects for improvement’. On the ropes for so much of its short history, TVH finally seemed to have a brighter future.

Sources close to the board and senior management at this time refer to it as a ‘golden period’ and the reason behind the housing association’s improved rating. In December 2006 Ian North came in as chair of the TVH board, while Kevin Lowry stepped in as chief executive. Former staff and board members point towards this partnership as the key to the housing association’s improvement.

Mr Lowry’s management was credited with steadying the stricken association, while Mr North’s efforts led him to being awarded Inspirational Board Member of the Year at the Housing Heroes awards in 2009.

‘The problems at the association seemed to be going round in circles and the same problems kept resurfacing. Ian North came in at the lowest point and things got better. Ian and Kevin had a good relationship and when they came in finally things went smoothly,’ says Mr Clark.

During his time on the board Mr North formed his own views on what had led to TVH’s first spell under supervision. ‘The organisation was let down by the Housing Corporation. It didn’t put TVH into supervision quickly enough. It was left to deteriorate; if it had moved more swiftly, it would have avoided the larger problems that built up and became embedded in the culture of the organisation,’ he says.

This is not the first time the Housing Corporation has drawn criticism of this nature. The most notable case was after the demise of Ujima Housing Association in 2008, which saw the regulator condemned by many in the sector for failing to step in sooner.

Mr North adds: ‘Whereas the Housing Corporation didn’t act quickly enough, the TSA acted as soon as it saw a problem and credit must go to Peter Marsh for stepping in.’

So what has happened that led to last month’s TSA action?

In January 2009 Paul Eastwood was appointed by the board to take over from the departing Kevin Lowry. According to sources Mr Eastwood - who was still suspended from his duties as chief executive at the time of going to press - and Mr North ‘were at loggerheads’ within weeks of working together.

As the rift between the men continued to widen, Bob Hingston was co-opted by Mr North to come in and strengthen the board, after having performed a similar role back in 2006. The relationship between the chair and the chief executive only got worse, however, and eventually Mr North opted to stand down and Mr Hingston stepped into the breach.

Almost immediately stories of staff unrest began to surface. Alleged high turnover of staff and board members eventually prompted the TSA to request a governance review.

TVH’s current chair, Mr Hingston, has continually emphasised, however, that the suspensions should ‘in no way be seen as an admission of fault in respect of the individuals concerned’.

In a letter to Inside Housing in January Mr Hingston alleged that the trouble had in fact been caused by former board members attempting ‘to cause damage to Three Valleys’ reputation’.

Action taken by the current management team had, in fact, been an attempt ‘to deal with issues around performance and culture that unfortunately have not been dealt with by previous board members and previous management’, he added in the letter. ‘A new board is being put in place that is determined to support management in our drive for excellence.’

In the wake of the TSA’s decision to place the association under supervision, the TVH board has now decided a merger with another social landlord would best suit the needs of its tenants.

In a statement Mr Hingston, added: ‘We recognise that this is an exceptional situation and, as previously stated, welcome the temporary support of the Tenant Services Authority as we look to enter a group structure to provide long-term stability.

‘We continue to work to our original business plan and have delivered all our tenant promises, with all homes set to meet the decent homes standard by the end of March. We also remain within our overall borrowing facility.’

It is now down to the TSA to unpick this web of allegation and counter-allegation. But one thing is clear - what TVH and its tenants need now more than anything is a sustained period of stability to concentrate on the job in hand.

Have your say

You must sign in to make a comment