The Regulator of Social Housing has further downgraded a housing association after finding that it remained “non compliant and breaches of the regulatory standards persist”.
The association’s governance grading now stands at G4 (non compliant), the lowest level, as a result of the regulator’s recent findings.
Following the regulator’s engagement and subsequent downgrade (G3/V3) in May this year, Prospect appointed a new independent board chair and interim chief executive officer, along with several other interim senior leadership staff.
The board has worked “positively” to address the governance and financial challenges it faces, and progress had been made in a number of areas, according to the regulator.
However, after continuing to closely monitor progress and as a result of work undertaken by the board and new leadership team, the regulator identified both further and persistent issues.
The regulator lists these as the following:
- A failure to fully understand its assets, contractual arrangements and the needs of tenants in their homes
- Significant weaknesses in its control framework in respect of its approach to setting and collecting rents
- Reviews carried out into two serious safeguarding incidents have identified weaknesses in procedures and controls of the landlord over services delivered by third-party managing agents (Prospect identified a range of overdue statutory health and safety checks but had difficulty in ensuring those were remedied through the third-party service providers)
- The contractual arrangements entered into with third parties has fettered Prospect’s ability to undertake appropriate consultation with tenants, as required under the Tenant Involvement and Empowerment Standard
The regulator has concluded that the breadth and depth of the issues currently faced by Prospect are a challenge for the existing governing body to manage effectively.
As a result, the regulator has decided to increase capacity and skills on Prospect’s governing by appointing three new officers to the board under its statutory powers.
The regulator says this statutory enforcement action is intended to strengthen Prospect’s governing body to ensure existing board members have the support needed to address the weaknesses identified in the organisation’s governance and financial management.
The Prospect board says it has committed to work with the regulator, and the regulator has said it will continue to engage intensively with Prospect while solutions are developed and implemented.
The regulator has concluded that, for the time being at least, Prospect’s grade for governance should be downgraded to G4.
Its viability grading remains at V3 (non compliant).
Prospect Housing Limited is a not-for-profit registered provider that manages 1,860 supported housing units in the West Midlands.
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