The Homes and Communities Agency (HCA) downgraded Tower Hamlets Community Housing’s (THCH) governance rating to a non-compliant ‘G3’.
The grading means that THCH is no longer compliant with the HCA’s Governance and Financial Viability Standard. It retains a compliant ‘V2’ in terms of its financial viability.
According to the HCA’s judgement, THCH uncovered “potentially material issues” relating to the site acquisition, procurement and delivery of two significant development schemes in October 2015.
The impact of this meant that the landlord had been two weeks away from a breach of a lending covenant, before they negotiated a waiver with the lender.
The HCA criticised the board and the executive team for a “loss of control” and “a failure of the risk and internal control frameworks at a basic level”.
It also criticised “ineffective” controls for not identifying the risk earlier, and added that the regulator had not been informed in an accurate and timely manner.