Association downgraded after ‘abortive’ development schemes

The association, formed through a three-way merger in 2006, is currently planning to up its development to 600-700 homes a year from the current level of around 500. This will entail a “significant” rise in market sale housing.

However the judgement said the expansion of development had been delayed “while the board puts in place the required skills, systems and structures needed to deliver its plans”.

It also warned that there had been “limited reporting” to the board of the financial position of the development programme, cashflow forecasts and budget performance.

The organisation’s financial viability was unchanged at the highest level of V1.

Carol Bode, chair of Radian Group, said: “Last year the board recognised the need to further build expertise to deliver an ambitious new corporate strategy and as such the organisation is in a period of change.

“In a spirit of transparency we shared our plans with the regulator. They recognised the period of transition we are in as we build capacity to enable Radian to use its considerable financial strength to build more homes, as all housing associations are urged to do by government and regulator.

“We are grateful for the regulator’s input, and will be working closely with them as we finalise our plans for change which we are confident will see Radian achieving G1 status in the near future.”

In other judgements released today, Byker Community Trust (BCT), which manages 1,800 homes on the Byker Wall Estate in Newcastle, also saw its governance downgraded to G2.

The RSH said this was due to an “in-depth assessment” that revealed, among other things, a failure to demonstrate “a systematic, risk-based approach to internal controls assurance”.

Its financial viability remains at V2. A spokesperson for the organisation said: “The BCT board has made a number of material changes to risk appraisal and stress-testing processes as part of a change programme initiated last autumn. We will continue this work over the coming months.”

The RSH also upgraded West Midlands-based WM Housing Group back to the top level of G1, following a downgrade in October for eviction processes at a temporary accommodation scheme.

It said WM had implemented an action plan to improve its governance since this point.

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