industry news
HA suspends CEO over board failures
A Norfolk housing association breached regulatory standards by failing to appoint board members properly and failing to notify the regulator. The social housing regulator, the Homes
and Communities Agency (HCA) has criticised Saffron Housing Trust for keeping quiet about the failings between 2011 and earlier this year. It downgraded the association’s rating to
a non-compliant G3, reflecting “the scale, impact and duration of Saffron’s historic failures”. A HCA spokesman said Saffron’s “failure to work openly with the regulator” represented a “fundamental breakdown in trust”. Following its downgrading, the 5,000 home landlord suspended its chief executive and appointed an interim. Adam Ronaldson has been placed on paid leave while an internal investigation takes place, with John Whitelock, director of new business, taking over. The HCA judgement said Saffron had
informed the regulator that problems in the governance process and failures to comply with its rules meant some board members had not been appointed properly. This continued over a period of years. “Significant decisions were made during
this period involving third parties and funders and there was uncertainty about the validity of all the decisions that had been made at those meetings given some board meetings had been inquorate,” the regulator added. Saffron’s board is now properly
constituted and has ratified all of the decisions made previously by the illegitimate board. A Saffron spokesperson said: “As an
organisation, we are determined to ensure that the historic failings that have come to light are not repeated and that we have correct and robust governance to ensure a stable, compliant and successful future.”
HCA to ensure repair responsibilities delivered
T
he Homes and Communities Agency will examine housing association budgets and business plans to ensure
property maintenance is not being put at risk by cuts in repairs spending. Faced with four years of one per cent annual
rent cuts and the need to make savings many social landlords are actively looking at ways to deliver ‘more for less’ while at the same time generating efficiencies to invest in building more new homes. In its Sector Risk Profile document, the HCA
will examine the cost efficiencies landlords are planning to cope with the cuts. The average major repairs cost per unit in the sector is forecast to fall by 10 per cent from £1,032 in 2016 to £928 by 2020. “We will seek to understand the assumptions within business plans where there are significant reductions in maintenance and repair expenditure, to gain assurance that this is not a sign of a registered provider failing to maintain its stock or a simple balancing figure in which significant capital investment programmes are being pushed to future years.” The HCA said associations relying on ambitious cost savings need to have clear
plans in place and mitigations if they cannot be delivered. However, where repair costs appear to be unusually high it will also challenge association boards.
“HCA's document outlines key risks including the Universal Credit, Brexit and deregulation measures”
The Sector Risk Profile document outlines
key risks to the sector. These include Universal Credit, Brexit and deregulation measures in the Housing and Planning Act as risks that providers need to be aware of. The HCA warned associations they
particularly needed to manage sales risk, which has increased due to the development of more homes for sale, including shared ownership and outright sales. It said board members’ skills and governance structures need to match the increasing complexity of providers’ businesses brought about by diversification.
Good news for contractors as lucrative deals inked
Multi-million pounds worth of new business have been announced by major contractors working in the social housing sector. Wates Living Space Maintenance has been
awarded a £24m repairs contract by Network Homes, to deliver a repairs service to the association’s 13,900 properties across London and the south east. Wates will also repair and maintain Network’s
empty properties under the contract, which runs for five years with an optional five-year extension. Meanwhile Kier Group have reported
increased profits of £125m (up 45 per cent) on a higher turnover, up 26 per cent to £4.2bn, despite the social housing rent cut resulting in a reduced level of contracts won by its housing maintenance business. The company is delivering higher volumes of
mixed tenure joint venture schemes. It also sees growing opportunities for new business arising from the trend for mergers among social landlords. A spokesman said: “With the anticipated merger of registered providers and the increasing need for social housing, we are starting to see new opportunities for
16 | HMM November 2016 |
www.housingmmonline.co.uk
the provision of end-to-end services which our residential and services divisions can provide with a combined new build and maintenance offering.”
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