Three Housing Associations Face Regulatory Downgrades

Three housing associations that missed gas safety checks downgrades but still comply with the Homes and Communities Agency’s governance standard.

The three landlords -Yorkshire Housing, Merlin Housing Society, and First Wessex- have all previously failed to meet the regulator’s home standard due to not complying with gas safety regulations.  All three had a number of properties which had not had an annual gas safety check as required by law.

They today had their governance rating downgraded to ‘G2’, the second highest. This means they comply with governance standards but need to improve. A spokesperson for Merlin Housing Society said each of its properties found to have an outdated certificate was serviced immediately. Peter Walters, chief executive of First Wessex, said the organisation has changed its procedures and now has a 100% gas safety check record.

In another of today’s 18 judgements (see box), the HCA downgraded the governance rating of 1,381-home association Chapter 1 to a non-compliant ‘G3’. The HCA said the landlord’s board had ‘failed to manage risk of its objectives’, following a ‘period of growth.’ It said the regulator raised concerns about inaccuracies in financial information it provided to the HCA and later found weaknesses in the organisation’s approach to risk management.

The HCA also upgraded the viability rating of Johnnie Johnson Housing Trust to a ‘V2’, meaning it is now compliant on viability. However it is still non-compliant on governance. The 4,960-home landlord received a governance downgrade in February due to having ‘an overly complex structure [that] had weakened governance arrangements’.

It has now made improvements, including strengthening its board, stabilising its business and carrying out a stock condition survey, but is still ‘G3.’ However, the HCA upgraded its viability rating to a compliant ‘G2’ and said JJHT is working towards full compliance overall.

Sample of a Landlord/Homeowner Gas Safety Record

Chapter 1 and Johnnie Johnson Housing Trust also failed to meet value for money rules. This brings the number of landlords found to breach the value for money rules in 2013/14 to 10.

Two landlords received governance rating upgrades to the highest possible ‘G1’. Bedfordshire Pilgrims Housing Association (BHPA) governance rating was upgraded after it assured the HCA its ‘processes governing board remuneration…are appropriate.’ BPHA had previously attracted criticism for its level of board pay. Swan Housing Association, which was downgraded in 2012 after staff falsified documents in order to claim grant early received its second upgrade in the space in four months following an action plan, including an assessment of board performance. Community Gateway Association received a viability rating upgrade.


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