Posted 19.06.14
Housing associations should ensure they have skilled boards, which understand how to run a complex business, according to an independent report into the 2012 near collapse of Liverpool-based Cosmopolitan Housing Group.
And the Regulator - the Housing and Communities Agency (HCA) - should make sure its judgements truly reflect the position of a registered provider of social housing.
In 2012, due to a number of problems coming to a head, Cosmopolitan almost became insolvent. With the support of the HCA, Cosmopolitan was rescued by Sanctuary Group. The rescue kept much-needed homes in the social housing sector, tenants kept their homes, and tax-payers' money was protected.
The independent report, by Altair Consultancy and Advisory Services, was commissioned by the HCA and Sanctuary to carry out the review and publish its report and recommendations.
The specialist consultancy was also asked by the HCA to identify wider lessons from the case for the social housing sector as a whole, and specific lessons for the HCA as the regulator.
Cosmopolitan's problems resulted from a combination of individual errors over many years. Cosmopolitan committed to an over-ambitious development programme without funding in place. This led to liquidity problems.
Historic leases on student housing had cross-guarantees against social housing assets and were wrongly accounted for in the accounts. Cosmopolitan's governance and management was weak; problems were not identified and put right.
The report recommends that all registered providers of social housing need to make sure that they:
The report's authors also suggest the Government reviews the legislative framework to enable the Regulator to act much more quickly in a crisis.
The full report can be downloaded via this link.
Peabody's Governance Rating Upgraded
The 27,500-home Peabody has had its governance rating upgraded to the highest possible by the social housing Regulator.
Peabody's rating was downgraded in February to a 'G2', indicating that it complies with regulatory rules but needs to improve. This was for not publishing its value for money (VFM) self-assessment in a timely and accessible way.
The Regulator's reversal of that earlier downgrading follows an externally facilitated review, which concluded that Peabody has taken positive action to improve its relevant governance arrangements. Consequently, the Regulator is now satisfied that Peabody complies with the requirements of the VFM standard.
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Heantun HA Joins the Accord Group
Heantun Housing Association officially joined the Accord Group in a move that will signal a new and exciting chapter for the Wolverhampton-based organisation.
Heantun, which provides homes and services to 3,500 people, chose the Accord Group as its preferred partner last year, with the Homes and Communities Agency approving the move in May.
As part of the deal, Heantun will take over the management of around 500 Accord Group-managed homes in Wolverhampton and Staffordshire, boosting Heantun's financial position.
The Accord Group will also support Heantun to develop new homes, including low carbon timber houses, in Wolverhampton and provide a cash injection and efficiency savings worth £420,000 a year.
