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Non-compliant supported housing association posts £4.7m loss

A supported housing association that has breached five regulatory standards has posted a £4.7m loss.

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A supported housing association that has breached five regulatory standards has posted a £4.7m loss #ukhousing

Westmoreland Supported Housing’s results for the 18 months to last September said that it had a turnover of £25.3m but spent £30m.

Westmoreland’s business model involves long-term leasing of specialised supported housing (SSH) from private investment funds, such as the real estate investment trust (REIT) Civitas and Henley Social Investments. In return, it pays an index-linked fee.


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The Regulator of Social Housing (RSH) has said it is “hard to see” how any association financed by long-term leases of SSH could be compliant with its standards.

The English regulator ruled in November that Westmoreland did not comply with its standards of governance and viability. The RSH slammed the association again last month for breaching three consumer standards, including one covering safety.

The regulator also confirmed earlier this month that Westmoreland was the first organisation ever to breach its standard on empowering tenants, something many in the sector had believed to be impossible.

Westmoreland did not mention the breach in its accounts, but has said it is addressing the issues and working closely with the RSH.

The association explained in its accounts that £20m of its £30m expenditure had gone on payments to the funds that own its homes. This was a huge increase on the £2.8m it spent in the 18 months before that.

It also recorded £4.3m of “bad debts”, despite having recorded no bad debts in the previous period.

A Westmoreland spokesperson said: “A considerable amount of progress around finance has been made since this accounting period and clear plans are being implemented to deal with the debt.

“Overall we continue to make real progress in terms of addressing both the governance and financial issues set out in the regulator’s regulatory notices.”

On the other side of the balance sheet, £21.4m of the association’s £25.3m turnover came from rental income from its tenants. Rent for SSH is covered entirely by housing benefit.

Westmoreland’s resulting £4.7m loss was greater than its £4.3m total expenditure in the previous period and significantly worse than the surplus of £278,174 it made in that period.

Westmoreland has grown significantly since its previous accounts, and Civitas now lists it as its second-largest counterparty in terms of homes leased.

Civitas posted its accounts on the same day as Westmoreland, revealing that it made a profit of £19.9m in its latest financial year. The REIT says Westmoreland provides £7m (19.7%) of Civitas’ annual £35.5m rental income from 108 properties housing 612 tenants.

Update: at 10.21 on 27.6.19 This story was updated to include a comment from a Westmoreland spokesperson. This comment was provided before publication.

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