Stoke-based housing association rated non-compliant after breaching Home Standard

EPIC was also alerted by the local fire service in 2019 that new fire doors needed to be installed in its flats, while further fire risk assessments carried out between December 2020 and February 2021 again highlighted the risk, as well as the need for EPIC to improve its fire alarms and compartmentation.

Overall EPIC has almost 500 fire safety remedial actions which are classified as high risk and are now overdue, the judgement said.

The regulator also identified further health and safety failures as it discovered that more than 100 domestic properties did not have an electrical inspection within the past 10 years, while EPIC had also not carried out asbestos surveys for a number of properties.

While EPIC has now demonstrated that it is completing the fire remediation work, the regulator said it is proportionate to find that the housing association breached the Home Standard due to “the seriousness of the issues, the durations for which tenants were potentially exposed to risk, and the number of tenants potentially affected”.

In a separate judgement, the regulator said it has taken the decision to downgrade EPIC to G3 as the board has “failed to provide challenge to the executive and has not maintained adequate oversight of its activities, particularly in relation to its health and safety obligations”.

The G3 rating means EPIC is non-compliant with the regulator’s governance requirements, however EPIC has avoided being given the lowest possible governance rating of G4.

The judgement said “the fact that it was the regulator, not EPIC’s board, that discovered the potential breach is an indication of significant weaknesses in EPIC’s business planning, risk management and financial reporting processes”.

Meanwhile, the regulator also highlighted the board’s recent decision to approve the purchase of 170 homes from another registered provider when EPIC’s growth strategy allows for the acquisition of 50 homes per year.

“The regulator has seen minimal evidence that the board considered the impact of this decision on the business nor that adequate due diligence was carried out prior to the decision being made,” the judgement said.

The regulator has “appointed external advisors to provide support and help identify the causes of the presenting issues” and said EPIC has “indicated its commitment to putting things right”.

On financial viability, EPIC has been downgraded from V1 to V2, which means it is still compliant but “needs to manage material risks to ensure continued compliance”.

These risks are mainly related to “significant one-off expenditure relating to fire safety works”, which will impact EPIC’s ability to respond to adverse events until 2023/24.

In response to the downgrade, EPIC has now now promoted its new finance director Susan Kellock to interim chief executive. Ms Kellock previously spent 12 years at Riverside Housing between 2005 and 2017, where she was asset director for Cumbria.

EPIC said that the new interim chief executive and chair are working with the board to address the shortcomings identified and liaising with the RSH to ensure the matters are addressed.
It is currently being advised and supported by Savills to help it improve the key areas identified as well as ensure effective governance and better board reporting.

A spokesperson for EPIC said: “The board seeks to ensure the safety of EPIC tenants is paramount and has detailed plans in place to address the safety issues raised in the regulatory notice as soon as is practically possible.

“Significant investment in fire safety improvements relating to this matter has already been approved by the board, with contracts in place and being delivered.

“In the current financial year, it is planned that a significant proportion of the high-risk remedial actions will be addressed. Pennington Choices, our fire risk assessors, will also carry out a broader review of EPIC’s approach to building compliance in September 2021, highlighting any further improvements which can be made.

“The board is confident that EPIC’s financial plans will continue to meet the lender’s requirements while also enabling us to deliver good quality services for our customers. The board continues to work to identify opportunities to increase financial capacity.”