Last week, the RSH set out its concerns about financial management among lease-based providers of specialised supported housing
The Regulator of Social Housing (RSH) has issued an enforcement notice against a small lease-based provider of specialised supported housing, a week after warning of financial risks in the sub-sector.
The regulator has demanded that Pivotal Housing Association (PHA), which manages fewer than 500 homes across the south west of England, take immediate actions to address serious failures in management.
It claims the association has failed to ensure access to sufficient liquidity and that it can manage risks to viability in the short and long-term, putting its social homes and the quality of its services at risk.
It comes after a report published last week by the RSH, in which it described significant and ongoing issues with some landlords involved in lease-based provision of specialised supported housing.
Providers in this sub-sector lease properties on a long-term basis to provide specialised housing for people with complex support needs, offering assistance similar to the level provided in a care home but with residents continuing to live independently.
The regulator said poor practices among such providers had resulted in providers becoming financially distressed or insolvent, and in some cases “severe” conflicts of interest have resulted in landlords taking on unfavourable lease terms and unsuitable homes from freeholders.
Pivotal was originally criticised by the RSH in 2021, when the regulator determined it was not delivering the outcomes of the Governance and Financial Viability Standard, and the Rent Standard.
The regulator said it had “engaged intensively” with PHA since then but that the housing association was “unable or unwilling to resolve the issues and meet the regulatory standards”.
As a result of the enforcement notice, PHA will have to commission an independent review within 28 days and develop a clear action plan for agreement with the regulator.
It will also be required to review risks and liabilities to determine whether it can remain solvent, ensure tenant safety and effectively manage potential conflicts of interests.
Jonathan Walters, deputy chief executive of RSH, said: “We are prepared to use powers where landlords are unable or unwilling to address issues to protect social homes and tenants’ interests.
“PHA is exposed to significant financial risks due to the type of lease structures it has entered into.
“It must address its access to liquidity urgently and agree a plan with us to ensure it can be properly managed and viable for the longer term.”
Pivotal’s first predecessor organisation was set up in Bournemouth in 1999 and it became a registered provider in 2007.
Today it provides housing and support services to nearly 500 single vulnerable people in Dorset, Devon, Cornwall and Gloucester.
The regulator said it expected PHA to cooperate fully with its direction. Pivotal did not respond to a request for comment.
No comments yet