Three social housing landlords found in breach of regulatory standards

The Regulator of Social Housing (RSH) has found one housing association and two local authorities to be in breach of its standards.

It has today published a regulatory judgement on Origin Housing and regulatory notices on Woking Borough Council and Wigan Council,.

The RSH has concluded that Origin Housing is in breach of its economic standards, resulting in a downgrade in its financial viability and governance grades to V3 and G3, while Woking and Wigan Council have both infringed the regulator’s consumer standards.

Grades G3 and G4 indicate non-compliance with governance standards, and V3 and V4 demonstrate non-compliance with financial viability standards, while grades G1 and G2, and V1 and V2 indicate compliance. 

The regulator’s judgement on Origin Housing stated that poor financial governance and weak internal controls have impacted the housing association’s future viability and put its social housing assets at “undue risk”.

Origin Housing owns and manages more than 7,000 homes in the London and Hertfordshire area. The regulator launched a probe into Origin’s compliance with its governance and financial viability standards in October this year.

Places for People has since announced that it was in merger talks with Origin.

Origin’s governance was previously graded at G1, the highest grade out of four, and its viability at V2.

The RSH also said that Origin did not notify them promptly of a potential covenant breach.

Harold Brown, senior assistant director for Investigations and Enforcement at RSH, said: “This case provides an important reminder that governing bodies must have an iron grip on their key risk exposures and ensure effective reporting. It was disappointing that the provider was aware of issues but did not promptly communicate them to the regulator.”

Origin published a statement on the judgement, which said: ”We have recognised the need to improve our financial processes and reporting and have been taking the right steps to strengthen control of our finances, especially given the impact of broader economic pressures and of rising demand and costs on our financial plan.

”We have a new finance director, Mark Farrar,  who is helping to steer us through the challenges and we are building a stronger skill-base within the finance function in order to better support the wider business. We commissioned an independent audit of budgetary controls and reporting in July 2023 which concluded in September, and we are implementing the recommendations in full.  

“We began the process of selecting a prospective merger partner over a year ago, recognising the increasingly challenging operating environment and the need to enhance financial strength and capacity to invest in our residents’ homes, services and local communities. We selected Places for People for initial discussions in May 2023 and announced the partnership proposal in October, with a view to joining the Group in Spring 2024.”

See also >> Operating margin of 200 largest social landlords falls to lowest since 2009, says regulator

See also >> Regulator of Social Housing issues six social landlords with viability downgrades

The regulator published a regulatory notice concluding that Woking Council is in breach of the home standard, which is a consumer standard.

Regulatory notices are normally published when a provider with fewer than 1,000 homes is not compliant with an economic or consumer standard, whereas regulatory judgements are produced for registered providers with 1,000 homes or more. 

The report stated that the council does not have effective systems in place to manage its health and safety responsibilities. This was due to the discovery of 400 overdue high-risk remedial actions, which had not been carried out by Woking Council after they conducted fire risk assessments.

The Home Standard requires registered providers to meet all applicable statutory requirements that provide for the health and safety of tenants in their homes.

Woking Council was unable to confirm whether almost a quarter of its properties had smoke detectors installed. It also could not confirm whether 8% of its required properties had carbon monoxide detectors installed.

Wigan Council was also found to have breached the home standard in respect of gas safety checks.

As part of its investigation, the regulator found that gas safety inspections by Wigan Council were overdue for more than 1,000 homes. The council has since reduced this number to around 700 homes.

Wigan Council also reported that around 275 homes did not have valid electrical inspection certificates.

Responding to its regulatory notice, leader of Woking Council, Ann-Marie Barker, said: “There is nothing more important than the safety of our residents, yet this regulatory notice is a stark warning that the council has fallen short in its health and safety duty toward tenants on this occasion.

“Last year, with the support of council tenants, the council brought the management and maintenance of our social housing back in-house to help improve housing services. It was following this change that we were able to fully understand the issues with the standard of our homes.

“The council is fully aware of its health and safety responsibilities and will work with the regulator closely to put in place a comprehensive programme to rectify these failures.

“Whilst we have much more to do, the council is determined to make the necessary improvements and is implementing a course of actions which will reassure tenants and the regulator of our commitment to delivering safe homes for residents.”

Woking council said that it undertook a programme of fire risks assessments over the spring and summer, which identified a significant number of remedial actions.

A Wigan Council spokesperson said: “Ensuring our residents have access to good quality, affordable and safe homes is a key priority for Wigan Council.

“We have been engaging with the Regulator of Social Housing to ensure that the Council is ready for the upcoming new regulations which come into force in April 2024.

“We acknowledge there is some work to do before then to ensure we are fully compliant with its existing consumer standards and will continue to work with the regulator to ensure this is completed as soon as possible.”