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A London council has become the latest local authority to breach the Home Standard after the regulator identified failures in relation to fire safety, gas safety and asbestos management.
Lambeth Council, which owns around 22,500 homes, was found by the regulator to have “a significant number of overdue remedial actions arising from fire risk assessments [FRAs]”, including some for FRAs considered intolerable or substantial.
According to a regulatory judgement published today, the council was also found not to have completed asbestos surveys in over 180 communal areas, while over 40 properties were found to be without valid gas safety certificates for up to 24 months.
The regulator said there is evidence that Lambeth has made improvements over the past six months and has “significantly accelerated” the pace of remedial works.
However, it considered Lambeth’s case a breach of the Home Standard because of the “breadth and scale of the failure” and the “long-standing nature of the issues”.
It also said that the council did not have an “effective system in place to allow it to manage the risk of tenant safety and meet its statutory health and safety responsibilities across a range of areas”.
Lambeth is the latest local authority found to be in breach of the Home Standard this year, following similar judgements against Gateshead, Arun, Runnymede and four councils in Kent.
In May this year, the regulator wrote to all stock-retaining councils reminding them of their health and safety obligations following the breaches.
A Lambeth Council spokesperson said: “Lambeth Council takes the safety of our residents incredibly seriously and has made significant strides recently in improving the safety of our properties. This good progress is recognised by the regulator.
“In the areas identified by the regulator, Lambeth has taken swift action to resolve these matters. There are no longer any outstanding asbestos surveys or ‘intolerable’ or ‘significant’ fire risk actions.
"On outstanding gas certificates, only a very small number remain outstanding, equating to a current position of 99.9% compliance. Those very few cases are being handled by dedicated council enforcement officers who are working on a day-by-day basis to resolve resident access issues.
"We firmly believe that – taken together - robust measures are now in place to ensure all these standards are maintained."
The notice of the breach came as the regulator released three narrative regulatory judgements today. These include a downgrade for The Guinness Partnership, which saw its financial viability rating moved down from V1 to V2.
This rating means that the 64,000-home association is compliant and has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance.
Guinness scored G1 for governance, the highest rating a landlord can achieve from the regulator.
The regulator said that while Guinness has an adequately funded business plan and sufficient security, its sales programme – which includes an increasing reliance on the cross-subsidy model – gives rise to risks and exposures that need to be managed.
It added that this combined with increased investment in existing homes reduces the capacity the landlord has to respond to adverse rents.
Guinness is currently a strategic partner with Homes England and the Greater London Authority and has secured £224m in grant funding to finance the construction of 2,500 homes annually by 2022.
A Guinness spokesperson said: “Both [V2 and G1 grades] are compliant gradings.
“This regrading is a reflection of our significant planned investment in our existing homes and new homes. The regulator has confirmed Guinness has an adequately funded business plan, sufficient security and is forecast to continue to meet its financial covenants.”
London-based housing association Octavia also saw its financial viability rating lowered to V2 from V1. The association scored G1 for governance.
The regulator said that the association, which owns 5,000 properties across central and west London, complies with the financial viability element of its standard but that its latest plan forecasts increased costs linked to its development programme.
It said a rise in interest payments and in shared ownership selling costs could negatively impact Octavia’s interest cover for several years. It added that there is a reduced capacity within the organisation to offset potential risks crystallising, such as those to do with market sale exposure and additional fire safety work.
Octavia plans to build 200 new homes a year for the next five years, with half of these homes for social, affordable or intermediate rent and the other half for shared ownership.
The regulator also found that Octavia’s stress-testing did not provide evidence of a robust plan in the event of “severe but plausible” downside scenarios.
An Octavia spokesperson said: “We are committed to building more quality affordable homes for local people and prioritising continued investment in health and safety for our residents.
“This brings increased exposure to risk and Octavia takes a long-term view. We are confident that a strategy that places emphasis on providing new, much-needed affordable homes and concentrating on resident safety is the right thing to do.
“We continue to monitor the external environment and closely manage the associated risks.”
In the final judgement, North Cumbrian association Eden Housing’s financial viability rating was upgraded from V2 to V1.
The judgement said that the association had a “fully funded business plan” with no requirement for refinancing. It also noted that improved interest cover and liquidity ratios reflect its increased financial resilience.
Provider | Governance | Viability | Explanation |
---|---|---|---|
Bernicia Group | G1 | V1 | No change |
Black Country Housing Group | G1 | V1 | No change |
Broadland Housing Association | G1 | V2 | No change |
Bromford Housing Group | G1 | V1 | No change |
Community Gateway Association | G1 | V1 | No change |
Eden Housing Association | G1 | V1 | Viability upgrade |
Empowering People Inspiring Communities | G1 | V1 | No change |
Gloucester City Homes | G1 | V2 | No change |
GreenSquare Group | G2 | V2 | No change |
Guinness Partnership (The) | G1 | V2 | Viability downgrade |
Home Group | G1 | V1 | No change |
Housing Solutions | G1 | V1 | No change |
Karbon Homes | G1 | V1 | No change |
Leeds Federated Housing Association | G1 | V1 | No change |
London Borough of Lambeth | N/A | N/A | Home Standard breach |
Mosscare St Vincent’s Housing Group | G1 | V1 | No change |
North Star Housing Group | G1 | V1 | No change |
Octavia Housing | G1 | V2 | Viability downgrade |
One Housing Group | G1 | V2 | No change |
One Manchester | G1 | V1 | No change |
Pierhead Housing Association | G1 | V1 | No change |
Pioneer Housing and Community Group (The) | G1 | V1 | No change |
Plymouth Community Homes | G1 | V1 | No change |
Two Rivers Housing | G1 | V1 | No change |
United Communities | G1 | V1 | No change |
Vivid Housing | G1 | V1 | No change |
The Regulator of Social Housing publishes regulatory judgements for all providers owning 1,000 or more social housing homes.
These judgements set out whether the provider is complying with the regulator’s governance and financial viability standards.
The regulator carries out an assessment either through a scheduled in-depth assessment, or reactive engagement (in which the regulator acts following information about a provider).
It then awards the provider a rating from one to four for financial viability (V) and a separate rating from one to four for governance (G).
Providers must score two or higher in both categories to be judged as complying with the standards.
As providers have increasingly taken on more risk to cross-subsidise social and affordable housing delivery through market-facing activity, the regulator has changed a number of associations’ viability ratings from V1 to V2.
The regulator often categorises this kind of regulatory action as ‘regrades’ rather than downgrades. Click here to read more.
Key to ratings:
V1/G1: Compliant
V2/G2: Compliant
V3/G3: Non-compliant and intensive regulatory engagement needed
V4/G4: Non-complaint, serious failures, leading to either intensive regulatory engagement or the use of enforcement powers
Rating straplines in full:
Governance ratings:
G1: The provider meets our governance requirements.
G2: The provider meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance.
G3: The provider does not meet our governance requirements. There are issues of serious regulatory concern and in agreement with us the provider is working to improve its position.
G4: The provider does not meet our governance requirements. There are issues of serious regulatory concern and the provider is subject to regulatory intervention or enforcement action.
Financial viability ratings:
V1: The provider meets our viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.
V2: The provider meets our viability requirements. It has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance.
V3: The provider does not meet our viability requirements. There are issues of serious regulatory concern and, in agreement with us, the provider is working to improve its position.
V4: The provider does not meet our viability requirements. There are issues of serious regulatory concern and the provider is subject to regulatory intervention or enforcement action.