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G3-graded HA investigated for financial viability non-compliance

News21 Mar 2023Michael Lloyd

The English regulator is investigating the financial viability of a small north London-based housing association, three months after downgrading it to a non-compliant governance grade.

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The English regulator has placed a small north London-based housing association on its ‘gradings under review’ list #UKhousing #SocialHousingFinance

Christian Action (Enfield) Housing Association (CAHA) owns or manages more than 1,590 dwellings, providing a range of housing and services in the four north London boroughs of Enfield, Barnet, Haringey and Waltham Forest.

 

On Friday 17 March, the Regulator of Social Housing (RSH) placed the provider on its ‘gradings under review’ list with regard to viability, after downgrading it to G3 for governance in December.

 

The RSH notifies that a provider’s grading is under review when its compliant grade (G1 or G2 for governance, and V1 or V2 for viability) is being investigated in relation to an issue that may result in a downgrade to a non-compliant grade (G3 or G4 for governance, and V3 or V4 for viability).

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The RSH has been working with CAHA to return it to governance compliance, and is now reviewing its financial viability compliance.

 

The outcome of the investigation will be confirmed in a regulatory judgement once completed, the regulator added.

 

CAHA’s current published grades are V2/G3.

 

On 14 December, the RSH downgraded the association to G3 after placing it on the gradings under review list in May last year while investigating its governance.

 

At the time it said CAHA had been unable to provide assurance that it is managing its risks and business planning in an effective way.

The RSH said weaknesses in the provider’s financial governance, as well as a lack of effective board oversight and scrutiny, meant that it failed to identify the potential crystallisation of a serious risk in sufficient time.

 

The regulator said that, as a result, CAHA came within weeks of a potential loan covenant breach that required it to rely on the actions and agreement of third parties to achieve covenant compliance at the end of the year.

 

Three other providers are currently on the RSH’s gradings under review list.

 

Rapport Housing and Care was placed on the list on 30 January, Tower Hamlets Community Housing on 20 December and East End Homes in October.

 

CAHA has been contacted for comment.

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Government agency/department/organisationHAs below 5000LondonRegulation and Governance
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