Regulator publishes updated engagement plan for Charing Cross

Regulator publishes updated engagement plan for Charing Cross

The Scottish Housing Regulator has published an updated engagement plan for Charing Cross Housing Association following the landlord’s appointment of West of Scotland Housing Association (WSHA) as its preferred transfer partner.

The Regulator is currently engaging with Charing Cross about its governance and financial management as well as its partnership proposals with WSHA.

In May 2021, Charing Cross concluded its strategic options appraisal and decided it wished to seek a partnership with another RSL. It advertised for partners and following an evaluation process has decided a transfer of engagements to West of Scotland is the best option. Charing Cross will now consult its tenants about a proposed transfer of engagements to West of Scotland.

The Regulator originally engaged with Charing Cross as its chair had been in post for 19 years. Nine out of twelve management committee members had also been in place for over nine years. Having identified this issue through its annual risk assessment, the Regulator engaged to seek assurance about the approach to governing body recruitment, skills assessment, performance evaluation and succession planning at Charing Cross.

An independent review in September 2019 of Charing Cross’ compliance with the Regulatory Standards of governance and financial management identified material non-compliance. The Regulator said Charing Cross did not take effective action to address its governance and financial management weaknesses which contributed to this non-compliance.

“We were not assured the management committee understood the seriousness of these weaknesses, and it failed to demonstrate a willingness and ability to take the actions needed to comply with Regulatory Standards,” it added.

The Regulator has also engaged with Charing Cross regarding allegations relating to breaches of its Code of Conduct.

In December 2020, Charing Cross decided to implement a number of actions to address its weaknesses. At the Regulator’s request, it co-opted four individuals to the management committee to improve its capacity and support it to make the necessary improvements. It agreed to develop its governance improvement plan to address the findings of the governance review and to carry out an independent investigation into the allegations regarding breaches of its Code of Conduct. It also agreed to take steps to address a number of other governance issues we raised with Charing Cross including its management of proxy voting at general meetings.

In the updated regulation plan, the Regulator stated: “Charing Cross is now engaging openly and constructively with us as it takes forward its agreed actions to address its weaknesses. It has made progress in identifying a wide range of historic governance, financial management and service issues and is taking appropriate action to try to address these, but the scale of the weaknesses being identified and Charing Cross’s capacity to address them continues to be a matter of concern.

“The investigation into alleged Code of Conduct breaches found evidence of serious breaches of the Charing Cross’s Code of Conduct.  Following consideration of the report two members of the Management Committee have resigned.  The findings of the report have raised further serious concerns about Charing Cross’s governance.

“Charing Cross has taken action to try to address serious weaknesses in its management of proxy voting at general meetings including amending its constitution to improve oversight of proxy votes.

“In addition to the work set out above Charing Cross has also commissioned an investigation into its handling of procurement issues following serious weaknesses which were identified during an internal audit.

“We are continuing to engage with Charing Cross as it undertakes a review of its compliance with its tenant and resident health and safety duties.  We are also seeking assurance about the outcome of its investigation into procurement issues.”

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