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Regulator issues two governance downgrades

Two housing associations have received governance downgrades in the latest batch of regulatory judgements released by the social housing regulator.

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Regulator issues two governance downgrades

Severn Vale Housing Society and Arches Housing were both downgraded from a top ‘G1’ rating to a ‘G2’, which is still compliant with regulatory standards.

Severn Vale, a 3,900-home stock transfer organisation based in Tewkesbury, received the downgrade following an in-depth assessment by regulator the Homes and Communities Agency (HCA).

The judgement said the association “needs to improve the effectiveness of some aspects of its arrangements to support continued compliance, particularly given inherent risks stemming from [its] current financial position and low forecast headroom on future covenant compliance”.


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It said the organisation’s plans to develop 50 homes over two years “assumes funding primarily through asset disposals” and warned its stress testing is “not comprehensive”.

The judgement added that “the pace of change in moving to a skills-based board has been slower than expected”.

Laurence James, chair of Severn Vale Housing, said: “Although it is disappointing to receive a G2 rating, in many ways there were no real surprises from the inspectors’ feedback: they recognised that we are on an improvement journey, that we are already working through comprehensive action plans, and they offered many positives for us to take away."

He added that the focus will be on improving the skills and capacity of the board and the executive, and that a long-standing vacancy for finance director had been filled on an interim basis.

"Needless to say, we want to meet the HCA’s standards to return to G1 at the earliest opportunity,” he added.

Arches Housing, a 1,100-home organisation based in Sheffield, was downgraded for health and safety failures, following a self-referral.

Brian Summerson, chief executive of the organisation, said: “These weaknesses related to outstanding testing and risk assessment regimes for electrical safety, water hygiene and asbestos management.


LATEST HCA REGULATORY JUDGEMENTS

Organisation Gov Viability
Arches Housing G2 V1
Catalyst Housing G1 V1
Community Gateway G1 V1
Knightstone Housing G1 V1
Octavia Housing G1 V1
One Vision Housing G1 V1
Trident Housing Association G1 V2
Severn Vale Housing Society G2 V2

 


“The biggest issue we identified was that we had 130 homes where we had not carried out a fixed period electrical inspection in the past 10 years; that number is now less than 20 and we are working to have this piece of work completed shortly.

“We have taken immediate action to rectify all the weaknesses identified following our review; no customers have come to any harm as a consequence of the weaknesses.”

The regulator said the organisation is “working to address the shortcomings… via a detailed action plan”.

The regulator also issued upgrades from G2 to G1 for 21,000-home London housing association Catalyst and 3,500-home Midlands-based Trident Housing Association.

Catalyst had been downgraded after self-reporting staff misconduct and financial impropriety in its market sales team.

The regulator said it has now strengthened its “internal controls framework”, including anti-fraud training.

Trident was upgraded after assuring the regulator its risk oversight had improved, through measures including a simplified structure and the removal of a loss-making entity from the group.

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