Two associations based in North West downgraded for governance

News26 Feb 2020Sarah Williams

Two housing associations headquartered in the North West have been downgraded from G1 to G2, after the regulator found that each needs to address different issues relating to governance compliance, including the effective use of data.

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Two housing associations headquartered in the North West have been downgraded from G1 to G2 #ukhousing

Your Housing Group and Progress Housing Group have both been downgraded for governance by the English regulator #ukhousing

In separate regulatory judgements, Your Housing Group (YHG), which is based in Warrington and operates across the North West, Yorkshire and the Midlands, and Progress Housing Group, which owns and manages approximately 9,300 homes in the North West, were each downgraded from G1 to G2. Both have maintained their V1 grades for viability.

Your Housing Group

YHG, which owns or manages 25,500 homes, was downgraded after the Regulator of Social Housing (RSH) concluded it had not revised its strategy in accordance with an agreed approach set out by the board when it approved its 2017 strategy. YHG needs to make improvements to how it delivers its aims, objectives and intended outcomes for tenants and potential tenants in an “effective, transparent and accountable manner”, the RSH said.

This includes improving its approach to value for money after only “limited plans to address underperformance” had been reported by YHG against value for money targets.

The regulator wrote: “The lack of clarity about YHG’s strategy, material shifts in plans and a number of abortive projects and schemes has limited the board’s ability to measure performance over time in delivering its strategic priorities.

“The board had committed to consider delivery of its 2017 strategy through an annual review. However, continued underperformance against delivery of YHG’s objectives has not been robustly considered.”

The regulator also cited evidence that in recent years there had been “some underinvestment in YHG’s existing homes”.

And it said that, while it expects asset management forecasts to reflect “professionally sourced, reliable and up-to-date data”, it was not clear whether YHG had been using reasonable assumptions it in its plans, “despite external stock condition survey work being commissioned and reported to its board”.

The judgement added: “As a result of YHG’s approach to business planning it has not been clear to the regulator that the group’s regulatory returns fully reflect its growth plans and stock investment requirements.

“YHG has not met the regulator’s transparency requirements in this respect.”

Following a stability check, the regulator confirmed YHG’s V1 rating for financial viability.

In a statement, YHG said: “YHG fully accepts the regulator’s judgement and we will continue to engage positively with them. We are proud of our V1 status for business viability and we will continue to work hard to retain it.

“We are disappointed that our governance rating has been amended to G2 and although this is still a compliant position, we intend to take all actions necessary to provide assurance to the regulator, with a view to restoring our G1 status at the earliest opportunity.”

Progress Housing Group

Progress Housing Group, which owns and manages approximately 9,300 homes in the North West, was also downgraded following issues with its assurance on health and safety compliance.

The regulator said that Progress had self-reported a number of issues concerning health and safety, and that engagement indicated that the provider had been working to rectify failings. But it said that, following an independent review “it is clear that because of data issues, [Progress] has not had adequate assurance on health and safety compliance”.

It added: “The board needs to demonstrate that improvements in its health and safety control and assurance processes have resulted in effective board control of this key risk.”

The regulator said that it is also continuing to engage with Progress with regard to its specialised supported housing stock, to ensure that the provider “has sufficient assurance to evidence that it meets the legal requirements relating to rents… on a consistent basis”.

In a statement, Jacqui De-Rose, chief executive of Progress, said: “Last year, we became aware that a small proportion of our health and safety inspections were not up to date and that some of the follow-up actions or repairs had not been carried out in a timely fashion.

“We immediately notified the Regulator of Social Housing and engaged an external, independent specialist to put in place a detailed action plan to put things right. We have updated our working practices and over the next few months will complete the last few outstanding inspections and catch-up works.”

She added: “We have reassured all our tenants that they are living in safe properties that have been through a rigorous set of health and safety inspections. We will continue to work tirelessly to ensure that we become a leader in the field of property compliance. This will include working closely with the regulator to implement an agreed set of actions that demonstrate the strength of our health and safety processes and also our governance arrangements.”