Regulator downgrades Yorkshire-based HA after incorrect reporting of rules to lenders

The 22,000-home HA self-reported its error dating back to April 2018, but it had only been discovered in May 2020. In the intervening years, the group had refinanced and issued a £250m bond.

Although the regulator acknowledged that Incommunities has “worked with funders and lawyers to rectify the situation”, the incorrect certifications had left the group “reliant on the goodwill of [its] funders”.

The judgement concluded that Incommunities “needs to strengthen its risk management and control framework to ensure that it is managing key risks with an appropriate degree of effectiveness”.

Geraldine Howley, chief executive of Incommunities, said: “We are disappointed by our governance rating which was due to an administrative oversight and as soon we became aware of the matter we informed the regulator.

“We are now working closely with the regulator and internally to ensure all necessary improvements to our processes are made promptly and we are confident we can return to our G1 rating early in the New Year.”

In its latest set of regulatory judgements, the RSH also reaffirmed North West provider ForHousing’s G2 governance rating from its previous interim assessment made in May 2019 at the time of the provider’s group restructure.

At that time, the regulator reported “whistle-blowing allegations concerning probity and a lack of transparency in decision-making”.

Parent company ForViva’s board commissioned a series of external reviews to investigate the allegations and, in response, has adopted interim governance measures.

The regulator concluded that, while ForHousing is still rated at a compliant level for governance, it “continues to need to improve some aspects of its governance arrangements to support continued compliance”.

The regulatory judgement did note that ForHousing is strengthening internal controls around decision-making and is working with the RSH to develop an action plan.

Stephen Reuben, chair of ForHousing, said: “We would like to thank the regulator for their guidance in this process and we look forward to working with them to further improve our governance.”