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Connexus remains compliant for governance despite Home Standard breach
A housing association, which failed to meet the Home Standard because of safety issues earlier this year, kept its governance rating but has been warned it must still make improvements.
Connexus Housing was under review by the Regulator of Social Housing (RSH) after it emerged it had failed to fix a heating appliance that it knew was unsafe in a home where a fire-related death later occurred.
The 10,500-home association self-referred to the regulator as a result of the incident and apologised to its residents.
Connexus, which was formed from a merger of Herefordshire Housing Group and Shropshire Housing Group in 2017, had previously been downgraded to a governance rating of ‘G2’ last November following whistleblower concerns about historic procurement practices.
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In a ruling today, the RSH said the Shropshire-based landlord had retained its ‘G2 V2’ ratings on governance and viability following an in-depth assessment (IDA) – indicating it meets the regulator’s requirements but needs to improve in some areas and faces material risks to its finances.
On governance, the regulator said the association’s board “lacks sufficient oversight of landlord health and safety compliance with weaknesses in systems, processes and data”.
The regulator added: “We have concluded on the basis of the IDA that Connexus’ approach to stress testing is not fully developed.
“Stress testing… is only undertaken at a group level and fails to understand where entity risks may crystallise and impact on the wider group.”
However the RSH said the landlord had made “some improvements” since last year’s downgrade, including “enhancing leadership capacity and capability at both executive and board”.
On viability, the regulator said it believed Connexus could deal “with a reasonable range of adverse scenarios”.
But it added: “There remain material risks that Connexus needs to manage.
“The board has reduced exposure to non-social housing activity but delivery of the sales pipeline still remains a risk to be managed, with a material impact on the group’s key financial metrics.”
Prior to its G2 downgrade last year, three senior executives resigned from the association including the person tipped to take over as chief executive.
New chief executive, Richard Woolley, took over in April. Connexus’ chair is former Clarion and Midland Heart boss Ruth Cooke.
Richard Woolley, chief executive of Connexus, said: “This recent judgement from the regulator recognises the improvements we have implemented at Connexus and our continued financial strength.
“We are focused on further strengthening our approach to compliance and have been working with the regulator as part of our drive to becoming a ‘G1/V1’ organisation.”
