The Regulator of Social Housing has deemed RCVDA Community Housing, based in Redcar and Cleveland, as non-compliant with the Governance and Financial Viability Standard.
Following an investigation, the regulator made three main conclusions.
It said RCVDA Community Housing had not managed its resources effectively to ensure its viability can be maintained and had not ensured its governance arrangements are effective.
It said RCVDA Community Housing had not been able to demonstrate that it has managed its affairs with an appropriate degree of skill, independence, diligence, effectiveness, prudence, and foresight.
And it said RCVDA Community Housing had failed to ensure that it has an appropriate, robust, and prudent business planning, risk, and control framework that ensures sufficient liquidity at all times.
Regulatory notices are issued in response to an event of regulatory importance, such as a breach of the Rent Standard or of a consumer standard that has or may cause serious harm.
The details
The regulator has found that RCVDA Community Housing has inadequate business planning and risk and control frameworks commensurate with the activities of the small eight-unit housing provider.
RCVDA Community Housing had received public funding from Homes England to undertake a development and it had failed to adequately manage the project.
RCVDA Community Housing engaged a developer to deliver its development activity, which subsequently entered liquidation.
The evidence available to the regulator led it to conclude that RCVDA Community Housing had a lack of effective oversight of its development activity.
This resulted in an acute financial position and it being unable to meet its contractual development obligations as and when they fell due – a fundamental failure of governance and operational control.
As a result of its financial position, RCVDA Community Housing entered into the regulator’s intensive engagement and insolvency processes, and a 28-day moratorium was triggered.
RCVDA Community Housing’s board subsequently agreed to transfer its assets and liabilities to another large registered provider (Home Group Limited), ensuring that, once the transfer is complete, the social housing assets and tenants remain in the sector and insolvency is averted.
The regulator says this informed its decision to cancel the moratorium and not to make formal proposals under section 145 of the Housing and Regeneration Act 2008 or to seek to apply for an Housing Administration Order.
RCVDA Community Housing is a not-for-profit provider that registered with the regulator in 2020; the provider currently manages eight units of supported housing in one owned property.
It is a subsidiary of RCVDA (Redcar & Cleveland Voluntary Development Agency).
Image credit: Stock-Asso/Shutterstock
Read next: [WATCH] RBH CEO issues statement on Awaab Ishak death, refuses to resign
Are you a social housing professional? Sign up for a FREE MEMBERSHIP to upload news stories, post job vacancies, and connect with colleagues on our secure social feed.
