Regulator – serious detriment in London

The Homes and Communities Agency (HCA) in a regulatory notice today said Circle Housing Group breached its home standard, causing potential for serious harm to tenants. It is the first time a landlordhas breached the ‘serious detriment’ threshold for HCA intervention on consumer regulation for having a poor repairs service.

The notice reveals the full extent of the 70,000-home association’s failure to maintain an adequate repairs and maintenance service in an area of London covering 13,000 homes. The notice said there have been ‘chronic and long standing difficulties in the delivery of the repairs service’ to tenants living in homes managed by Circle subsidiaries Circle 33 and Old Ford Housing Association.

Less than a fifth of urgent and emergency repairs were completed on time across Circle 33’s 8,000 homes and less than half of repairs to Circle’s stock were completed on time elsewhere in London. ‘On time’ refers to Circle’s own service standards, which include different time targets for different types of repairs.

The notice reveals one London local authority has served ‘a significant and unusually high number of statutory notices on Circle which related to serious issues of disrepair’.  This is understood to refer to a different borough to Tower Hamlets, which last month passed a motion calling for mayor Lutfur Rahman to take action against Circle over the problems. Statutory notices are used by councils to force landlords to carry out work by a given date, with the threat of court action if they don’t.

The HCA said legal action has been threatened and, in one case, initiated against Circle. The regulator will now consider whether to downgrade Circle’s governance and financial viability ratings because of the problems.

Circle has reduced its roster of 200 local contractors to just six as part of a £1.2bn procurement exercise to save £100m over 10 years.

It has responded to the repairs issues by drafting in additional contractors and employing external advisers.

A spokesperson for Circle said: ‘We acknowledge the HCA’s findings and are taking this matter extremely seriously. We apologise unreservedly to those customers who have been affected.’

She added that Circle has experienced difficulties with its new contracts in parts of London and has implemented a ‘well-resourced, comprehensive plan’ aimed at bringing  ‘service back to an acceptable standard.

The spokesperson refused to reveal whether anybody senior at Circle has resigned or been dismissed in connection with the problems.

Circle is the seventh social landlord to breach the ‘serious detriment threshold’, which prompts intervention by the HCA. Six landlords, First Wessex, Merlin Housing Society, Yorkshire Housing, Guinness Partnership, Your Housing Group and Gallions Housing Association have all breached the threshold because of missed gas safety checks, while Blackpool Council breached the threshold because of a balcony collapse.