Regulator intervenes with board member appointments for troubled supported housing association

Westmoreland, which provides housing to people with mental disabilities, is one of a number of supported housing associations operating a controversial lease-based financial model.

It signs long-term leases of specialised supported housing (SSH) from private investment funds, such as real estate investment trust Civitas and Henley Social Investments. In return, it pays a monthly, index-linked fee.

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

In a statement on the appointments, Harold Brown, senior assistant director of investigation and enforcement at the regulator, said: “We have made these appointments following our most recent engagement with Westmoreland, to ensure that the existing board members have support to address the weaknesses in the provider’s governance and financial management.

“We will publish an updated regulatory judgement in due course. Our priority in taking regulatory action is to ensure that the interests of Westmoreland’s tenants remain protected.”

A number of individuals have recently left Westmoreland’s board, including former chair John Russell, who was simultaneously chair of Westmoreland and of Fairhome, a firm that has arranged lease deals between Westmoreland and investment funds.

In its initial judgement on Westmoreland, the regulator criticised this situation, saying: “In the absence of evidence, it is reasonable to assume that these arrangements, while giving a level of financial support, could be inappropriately advancing the interests of a third party.”

Mike Doran, chair of Westmoreland, said: “We recently transformed the board with the appointment of six new members, all with strong skills and established backgrounds gained from working many years in social housing.

“We welcome the additional support from the [regulator] and the appointed individuals will further enhance the board’s capacity and complement the skills and experience we have in place. The new board has already made significant progress in supporting [Westmoreland] to implement major changes to the association’s operations.

“We are confident that we have a board in place with the conviction, experience and skills to create a positive future for [Westmoreland].”