Reidvale given new compliance targets from Regulator

Reidvale given new compliance targets from Regulator

The Scottish Housing Regulator (SHR) has issued a new list of deadlines for Reidvale Housing Association as the two organisations continue to work towards the landlord returning to full compliance with the regulatory standards of governance and financial management.

Since the decision in January by shareholding members of Reidvale to reject a proposed transfer of engagements with Places for People Scotland, the landlord has had a duty to show how it would address its governance and financial management weaknesses and comply with all of its obligations.

A deadline of 24 February 2024 was set for the landlord to outline this plan and provide the Regulator with updated 30-year financial projections and assumptions. This deadline was then extended to March 4 following a request for more time.

In an updated engagement plan for Reidvale, the Regulator confirmed this deadline was met, but that further assurance is now required.

It said: “Reidvale provided its plan on 4 March and since then has provided an updated plan which includes the work it will do to improve its evidence base on compliance including a review of its compliance with the Standards and survey work to clarify the cost of stonework and component replacements in its homes. We are engaging with Reidvale to seek assurance that the plan will address its serious weaknesses, ensure compliance with its legislative and regulatory obligations and that it has the capacity to deliver on its plan.”

Since then, Reidvale has held a Special General Meeting (SGM) to remove some governing body members and replace them with five newly elected members. The management committee then co-opted a further four new members and put in place new interim senior officer arrangements.

Noting the appointments, the Regulator added: “We are engaging with Reidvale about the outcome of the SGM and its plans for induction and training of the management committee to seek assurance about the capacity of the management committee to address its significant weaknesses.

“We will continue to engage with Reidvale as it further develops these plans over the coming weeks to provide us with assurance that it will be able to comply with regulatory requirements including the standards.”

Reidvale chairperson, Denise Dempsey, told Scottish Housing News: “The management committee welcome the updated Engagement Plan. We have agreed detailed plans for returning Reidvale to full compliance with regulatory requirements and the development of a comprehensive new business plan. In the short term, we will soon be publishing an interim business plan for 2024/25.

“The Regulator’s expectations and requirements set out in the updated Engagement Plan very much reflect our own plans and we are working closely with SHR to monitor progress.”

Outlining some of the specific weaknesses needing to be addressed at Reidvale, the engagement plan added: “Reidvale commissioned a further review of its compliance with regulatory requirements in November 2020. The review identified some progress in relation to delivering improvements but found continued serious weaknesses in compliance with regulatory requirements. The review specifically raised matters relating to Reidvale’s Business Plan and rent affordability.

“It also became apparent that Reidvale’s expenditure in some areas such as staff salaries was high in comparison to similar RSLs. Reidvale commissioned an organisational review to consider this further. It highlighted serious weaknesses in Reidvale’s organisational structure and raised further additional concerns regarding Reidvale’s compliance with the Standards.

“Reidvale also carried out a stock condition survey in order to understand its future maintenance requirements and incorporate that information into its strategic and financial planning. The stock condition survey report was produced in January 2022 and highlighted significant investment requirements. Reidvale plans to carry out a further stock condition survey. Reidvale developed a one-year investment programme which prioritised failing stonework in its pre-1919 properties. It developed a pilot programme to establish the extent of the work required to its stonework and the likely costs involved. The programme found that these costs are far higher than it had estimated, and this has slowed the pace of the stonework repairs.

“There have also been a number of incidents of falling stonework which raise serious concerns regarding tenant and resident safety. As Reidvale has taken forward its programme of stonework repairs, it has found that the work required to address the failing stonework is significantly more extensive than originally anticipated and it is carrying out a further stonework survey to clarify the extent of the work required and the associated costs.

“The estimated maintenance costs from the stock condition survey, the stonework repairs, the higher than average operating expenditure and historically low rents put significant stress on Reidvale’s ongoing financial position and rent affordability.”

In its list of new requirements for Reidvale Housing Association, the Scottish Housing Regulator has said the landlord must:

  • provide information on its plan to address its serious weaknesses and ensure compliance with its legislative and regulatory obligations;
  • provide details of its management committee induction and training programme by end August 2024;
  • provide information on its stock condition and stonework surveys and how it will address the findings, particularly to ensure the safety of its stonework by end September 2024;
  • provide its new Asset Management Strategy and updated 30 stock investment plans when they are developed;
  • provide the report on its assessment of compliance with the Standards by end October 2024;
  • provide its revised governance and financial improvement plan to achieve compliance by end October 2024;
  • provide its interim business plan including 30 year financial projections by end July 2024 and keep SHR informed of timescales to develop its long term business strategy and plan; and
  • tell SHR about its plans to engage with its tenants by end June 2024.
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