The Regulator of Social Housing (RSH) has downgraded Shepherds Bush Housing Association due to a breach of the economic standards.
In a regulatory judgement published today (22 June), the regulator concluded that Shepherds Bush Housing Association Limited is non-compliant with the governance element of the economic standards and downgraded it to G3 status.
Following an in-depth assessment and reactive engagement, the regulator found that Shepherds Bush has been unable to provide assurance that its governance arrangements had been effective.
Weaknesses in its risk management, internal control frameworks, and business plan reporting meant it failed to identify the potential crystallisation of financial risks in sufficient time.
The regulator also identified concerns about fire safety reporting and compliance with the Decent Homes Standard at Shepherds Bush and found that data quality is an ongoing issue for this housing association.
There have also been a number of incidences where Shepherds Bush’s communication and provision of information to the regulator fell below the required standard.
In response to the regulator’s investigation and in agreement with RSH, Shepherds Bush has accelerated several actions to improve its governance and put in place a Governance Assurance Plan that includes an overarching governance review, improvements to the financial governance and controls, and several data reviews.
Shepherds Bush Housing Association remains compliant with the financial viability element of the economic standards and retains its V2 status.
Shepherds Bush was not found to be in breach of any consumer standards.
Harold Brown, the Regulator of Social Housing’s senior assistant director of Investigations and Enforcement, said: “Shepherds Bush Housing Association failed to manage its affairs appropriately in relation to risk management, fire safety, and the decency of its tenants’ homes.
“We remind all social housing landlords that they have a responsibility to notify us promptly about potential breaches of our standards.
“We will continue to monitor Shepherds Bush Housing Association as it improves its governance.”
Response: Shepherds Bush
Matt Campion, CEO of SBHG, said: “Whilst we are disappointed that we have not been able to meet all regulatory expectations, we understand the RSH’s decision.
“Our financial viability grading remains compliant, and as an executive team, we have already taken steps to make the improvements required to regain our G2 grading and thereafter return to G1.
“Since being placed on the RSH’s gradings under review list, we have been working closely with the RSH, and in December 2021, we engaged Savills’ Governance team for specialist support.
“The robust governance improvement plan we are now working to, with support and external scrutiny from Savills, will help us strengthen governance and board oversight, improve financial governance and control, and provide assurance about the data we hold and use.”
Matt continued: “We have already strengthened our board with a new chair and a new chair of our Audit and Risk Committee.
“Both appointments will help us to drive improvements in our governance.
“Martin Hurst, our new chair, has a wealth of experience in the housing sector and more broadly in regulated industries and the Civil Service.
“I am confident that we can return to a G2 grading, and subsequently a G1, under his stewardship.
“I would also like to reassure customer that there will be no impact on them as a result of this judgment.
“We have a clear service improvement plan for our customers, which includes investing £5m in homes across 2022/23 and £90m on building safety over a number of years.”
Martin Hurst, the newly appointed chair of Shepherds Bush, said: “The SBHG board and executive fully accept the regulator’s judgment.
“The organisation had already identified and begun to address many of the points raised in the judgment.
“Since arriving, I have been struck by the determination of the board and executive team to learn lessons and deliver the action plan we have in place to make SBHG the high-quality organisation we aspire to be, and which our residents deserve.”
Image credit: Bacho/Shutterstock
Read next: Q&A, Barbara Brownlee, Soho Housing
Are you a social housing professional? Sign up for a FREE MEMBERSHIP to upload news stories, post job vacancies, and connect with colleagues on our secure social feed.