Kincardine Housing Co-operative chair suspended by Scottish Housing Regulator

Kincardine Housing Co-operativeThe Scottish Housing Regulator has used its statutory powers to suspend the chair of Kincardine Housing Co-operative after it identified “serious and urgent risks” to the delivery of services to tenants.

Concerns have been raised about how Kincardine is managing conflicts of interest, the inappropriate involvement of the management committee in operational decisions and how the committee has taken tenants’ views into account when making decisions.

A regulation plan published by the Regulator revealed that while Kincardine had agreed to undertake an independent investigation into potential breaches of its code of conduct, progress has been slow to date and the investigation has not yet been completed.

“In the interim there have been further potential breaches of its code of conduct,” the report said.

The Regulator said that Kincardine has experienced difficulty securing managing agent services. Its current service agreement with Osprey Housing Ltd, which is due to end in December 2017, will not be renewed and Kincardine currently has no alternative arrangements in place to ensure that tenants will continue to receive appropriate services.

Concerns have also been raised regarding Kincardine’s financial management.

According to the report, there is “a lack of openness and transparency in relation to expenditure”.

“Committee members’ expenses are substantially higher than 2016/17 and allegations have been made about potentially inappropriate payments,” it stated.

To address what it describes as “a serious and imminent risk to the interests of tenants”, the Regulator has appointed a statutory manager, restricted the co-operative from undertaking financial or other transactions and making payments, and suspended the chair of the management committee.

The statutory manager will be directly accountable to the Regulator and will manage all affairs at Kincardine. The first priority of the manager will be to ensure tenants continue to receive housing services beyond December when the current agency contract will end.

The manager will also review Kincardine’s governance and financial management against Regulatory Standards and review and arrange payment of operational costs.

Christine Macleod, director of regulation (governance and performance) at the Scottish Housing Regulator, said: “The issues at Kincardine are serious and present an urgent risk to tenants’ interests. We’ve taken these decisive steps to use our statutory powers to ensure tenants continue to receive housing services and Kincardine’s assets are protected.

“We have also directed the statutory manager to commission investigations into apparent mismanagement and misconduct. We will evaluate the results of the investigations when they are completed and decide on the next steps in the interests of Kincardine’s tenants.”

Kincardine Housing Co-operative registered as a social landlord in 1991. It owns and manages 72 social rented homes in Portlethen, Fourdon and Stonehaven in Aberdeenshire and is a non-charitable fully mutual co-operative. Kincardine does not employ any staff directly and currently employs Osprey Housing Ltd as managing agent to deliver all of its services.

As at 31 March 2017 Kincardine’s turnover for the year was just over £0.284 million, with no outstanding borrowings.

Glenn Adcook, Osprey Housing’s chief executive, told Scottish Housing News that it he had become “increasingly concerned” at Kincardine’s governance while working with the organisation.

He said: “Osprey Housing was appointed to provide managing agent services to Kincardine Housing Co-operative in September 2016 for an interim period to July 2017.

“We agreed to continue on a restricted basis beyond that time as Kincardine had been unable to appoint a new agent following a procurement process. We stipulated at that time that we would review this arrangement after six months. That period is now almost over and we have given them the previously agreed 30 days notice of our intention to step down.

“During this arrangement we have become increasingly concerned at the governance of Kincardine Housing Co-operative, an issue also highlighted by the Scottish Housing Regulator in its Regulation Plan for the organisation published on its website last month.”

Scottish Housing News has contacted Kincardine Housing Co-operative for a response.

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