Regulator puts ‘weak governance’ at root of all statutory interventions
In a new report setting out the key lessons from its use of statutory intervention powers in 11 RSLs since 2014, the Regulator said it found that the root of the problems lay in weak governance in each of the cases.
In almost all of the RSLs there was a failure of leadership, and the cultures in some left them vulnerable to poor behaviours and incompetence. Some of those in leadership disregarded the controls that were there to protect the RSL, the report added.
Common characteristics discovered in the RSLs included:
- Governing body members did not know what they did not know – they were not provided with, did not ask for, or failed to understand the information needed to carry out their role
- The governing body did not seek or receive appropriate assurance and did not effectively challenging senior officers
- A poor understanding of conflicts of interest and how to manage them
- Little encouragement or value placed on feedback from customers or staff
- A disregard of whistleblowing
- No internal audit function or poorly directed internal audit activity
- Governing body members in post for more than nine years and the RSL had not assessed their continuing effectiveness
- The senior officer had been in post for a long time
- A lack of transparency, including in its relationship with its lenders
- An inadequate system of internal control or senior management had over-ridden the system of internal control
Of the 11 times the Regulator has used its statutory intervention powers, in four cases; Wellhouse (Dec 2014-Nov 2016), Muirhouse (Dec 2014-June 2016), Ferguslie Park (Feb 2016-Aug 2018) and Molendinar Park (Mar 2017-Oct 2017) the RSL had improved and now complies with regulatory requirements.
The intervention at Antonine (Aug 2016-Sept 2018) ended when the RSL transferred its homes to Caledonia, while interventions at Arklet (Feb 2017), Wishaw & District (Feb 2017), Kincardine (Nov 2017), Dalmuir Park (Dec 2017), Ruchazie (Mar 2018) and Thistle (Aug 2018) were ongoing at the time of the report.
George Walker, chair at the Scottish Housing Regulator, said: “Most social landlords in Scotland are well-run and deliver good quality homes and services for their tenants and other service users. But things can go wrong that put the interests of tenants and other service users at risk, and this is when we use our statutory intervention powers.
“In this report we set out the lessons from our statutory interventions, including things that we have learned as well as the things social landlord can learn from. It is clear from this report that good governance protects social landlords from the problems that mean the Regulator has to intervene.”