Regulator extends statutory appointments at Wishaw & District Housing Association
The statutory appointment of a manager and five governing body members at Wishaw & District Housing Association is to continue despite improvements being made to its governance, risk management and financial planning.
In an updated regulation plan for the Association, the Scottish Housing Regulator recognised that some progress has been made in delivering the remit of the manager and appointees but added that “further work is required”.
During 2016/17 the Regulator engaged with Wishaw & District about a site at Main Street in Wishaw which it had acquired in 2010. An independent financial assessment and subsequent investigation highlighted “a number of serious governance failures, significant weaknesses in risk management and serious financial risks arising from the purchase of, and failure to develop, the site”.
The investigation concluded that Wishaw & District had not complied with Regulatory Standards or the standards of conduct in place for governing body members. There was also potential for further loss and risk to tenants’ interests if the future of the site was not managed appropriately.
Wishaw & District needed to carry out a strategic review of its governance, risk management and financial planning. It also needed to undertake significant improvement work and make urgent decisions about the future of the site to protect the organisation’s financial position.
The Regulator used its statutory powers to make the appointments in February 2017 because it was not assured that Wishaw & District had the necessary governance and leadership capacity to undertake the scale of the work required and to manage the financial risks arising from the site without expert support.
The Regulator considered that Wishaw & District’s poor governance and the financial risks it faced posed “a significant risk to tenants’ interests, to public and private funders’ confidence and to the general reputation of registered social landlords”.
Since then, the governing body has recognised the serious nature of the issues and is working constructively with the manager to address the risks and weaknesses. It has begun a strategic review of governance and financial management and is implementing an improvement plan. It has completed a review of the governing body and has taken steps to increase the numbers, and strengthen its capacity, by recruiting new members.
The governing body also commissioned an independent financial options appraisal and an environmental due diligence report and used their findings to help it agree a strategy for the Main Street site. It is in the process of commissioning a feasibility study and is taking steps to ensure that it has expert, independent advice to support it to deliver the strategy. It has agreed a risk management strategy for the site.
Despite this, the Regulator said it considers that there are still areas of significant weakness which present a risk to its tenants’ interests.
It added: “There has been some progress in delivering the remit of the manager and appointees but further work is required and we therefore need to continue our appointment of a manager and five officers to the governing body.”
The manager’s appointment will be extended to February 2018 and the appointments to the governing body until August 2018.
Responding to the updated regulation plan, Wishaw and District Housing Association chair, Brenda Higgins, told Scottish Housing News: “We welcome the recognition from the Regulator of the good progress that has been made, while acknowledging that further work is needed to consolidate the improvements.
“As the report explains, we are all working together to address risks and past weaknesses. As we enter this new phase, we are confident that the association is now on the right path with a clear plan to address the outstanding issues.”