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Rating downgrades for housing associations
Three housing associations have received rating downgrades from the English social housing regulator.
In one of 26 judgements published today(see table below) Yorkshire Coast Homes, which manages around 4,400 homes, had its governance rating downgraded after uncovering “a number of weaknesses relating to risk management”.
The Homes and Communities Agency said that while the organisation could identify risks, there was no plan for how to tackle them.
The association is now exploring a “strategic partnership” with another housing provider and its interim chief executive is working with the board to make improvements, the regulator said.
In contrast, 29,500-home Your Housing Group has had its governance upgraded. The regulator said Your Housing Group had introduced a new framework to alert the board to emerging risks, the board structure is working well and the investment committee’s remit has been widened to reflect Your Housing Group’s development plans.
Ros Fox, chair of Yorkshire Coast Homes, said the organisation was “disappointed” that the regulator had “chosen this time to issue this new rating as we are a considerable way into our discussions to create a new association”.
She added: “We will, as we always have, continue to work with the regulator to ensure that we move smoothly forward.”
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The regulator ruled that Enham Trust, a 281-home provider, is not compliant with the governance and viability standards after racking up a £2.4m deficit in 2015/16 and predicting a “significant loss” for 2016/17.
This was due to losses in the social enterprise part of the business and the impairment of the provider’s development scheme.
The regulator also found weaknesses in the provider’s accounting records and lender loan covenants have not been met as a result.
External auditors said Enham Trust’s ability to continue to operate is an “ongoing concern”.
In response Enham Trust has exited from loss-making non-social housing activities and paused development schemes.
A spokesperson for Enham Trust said the organisation had taken "significant corrective action" to rectify its financial position.
She added: "The measures undertaken to date include giving notice on loss making contracts, the re-structure of various business areas and the pause of the Cedar Park Development. The board, including its newly appointed chief executive and director of finance have worked positively and proactively to establish a new long term business plan that will ensure financial sustainability, and are collectively committed to addressing the challenges the trust faces."
The regulator downgraded 1,217-home Unity Housing Association for its governance. The regulator found regular board and executive appraisals had not been carried out in recent years and some aspects of its reporting arrangements “require improvement”. The regulator said recent appraisals had been completed with external support.
The regulator said Unity should now carry out a “comprehensive” review to make sure it is following its “chosen code of governance”.
Unity mainly provides homes for black and minority ethnic tenants in Leeds.
A spokesperson for Unity Housing Association said: “We welcome the report and are pleased to be compliant once again. The issues identified by the HCA are already being addressed and good progress has been made. We will continue to work hard to attain the highest compliance grades at the earliest opportunity.”
LATEST HCA JUDGEMENTS
| Provider | Governance rating | Viability rating | Action | ||||||||||
| Anchor Trust | G1 | V1 | No change to ratings | ||||||||||
| Bracknell Forest Homes Limited | G1 | V1 | No change to ratings | ||||||||||
| Durham Aged Mineworkers’ Homes Association | G1 | V1 | No change to ratings | ||||||||||
| Enham Trust | N/A | N/A | Non-compliant | ||||||||||
| ForViva Group Limited | G1 | V1 | No change to ratings | ||||||||||
| Hightown Housing Association Limited | G1 | V1 | No change to ratings | ||||||||||
| Liverpool Mutual Homes Limited | G1 | V1 | No change to ratings | ||||||||||
| Livin Housing Limited | G1 | V1 | No change to ratings | ||||||||||
| Magna Housing Group Limited | G1 | V1 | No change to ratings | ||||||||||
| Metropolitan Housing Trust Limited | G1 | V1 | No change to ratings | ||||||||||
| New Charter Housing Trust Limited | G1 | V1 | No change to ratings | ||||||||||
| North Devon Homes Limited | G2 | V1 | No change to ratings | ||||||||||
| Nottingham Community Housing Association Limited | G1 | V1 | No change to ratings | ||||||||||
| One Manchester Limited | G1 | V1 | No change to ratings | ||||||||||
| Red Kite Community Housing Limited | G1 | V1 | No change to ratings | ||||||||||
| Riverside Group Limited (The) | G1 | V1 | No change to ratings | ||||||||||
| Rooftop Housing Group Limited | G1 | V1 | No change to ratings | ||||||||||
| Sanctuary Housing Association | G1 | V1 | No change to ratings | ||||||||||
| Selwood Housing Society Limited | G1 | V1 | No change to ratings | ||||||||||
| Unity Housing Association Limited | G2 | V2 | Governance downgrade | ||||||||||
| Vale of Aylesbury Housing Trust | G1 | V1 | No change to ratings | ||||||||||
| Vivid Housing Limited | G1 | V1 | No change to ratings | ||||||||||
| Wythenshawe Community Housing Group Limited | G1 | V1 | No change to ratings | ||||||||||
| Yarlington Housing Group | G1 | V1 | No change to ratings | ||||||||||
| Yorkshire Coast Homes Ltd | G2 | V1 | Governance downgrade | ||||||||||
| Your Housing Gtroup Limited | G1 | V1 | Governance upgrade | ||||||||||
