A Bedfordshire-based landlord has been downgraded by the social housing regulator for making payments to a company for which one of its board members is the chief executive.
According to Inside Housing:
Aldwyck Housing Group, a 10,000-home association, was downgraded from a G1 rating to a G2 by the Homes and Communities Agency (HCA), meaning it meets governance requirements, but needs to make improvements.
In a regulatory judgement published today, the HCA said Aldwyck made the transaction to the company that was not on its registered supplier list and there was no formal written contract.
In July this year the association told the regulator in the previous autumn it had made payments for services to a company for which an Aldwyck board member was chief executive and principle shareholder.
The payment, which did not have the approval of Aldwyck’s full board, was a ‘significant conflict of interest’, the regulator concluded.
The regulator said it was also concerned that it took six weeks for the board to report the incident to the HCA.
Aldwyck retained a V1 viability grading – the best rating possible.
The association’s spokesperson said: ‘The group’s board and executive are committed to the delivery of an action plan to address the HCA’s concerns and to regaining G1 status.’
Cheshire-based Equity Housing Group was also downgraded to a G2 rating because the HCA said it failed to enhance its governance and risk management arrangements to match an ‘ambitious growth programme’.
The 4,700-home association was also downgraded on viability, from a V1 to a V2, meaning it meets viability requirements, but needs to manage its financial risk.
A spokesperson for the landlord said it was ‘committed to working with the regulator on a robust action plan to ensure we improve the organisation’s regulatory ratings as soon as possible’.
Cottsway Housing Association’s viability rating was upgraded to from a V2 to a V1 but it retained a G2 governance rating.