Governance Grading Downgrade
The Regulator of Social Housing (RSH) carries out regular In-Depth Assessments (IDAs) of housing associations. The IDA aims to identify the financial strength, potential risks, approach to value for money and quality of governance of housing associations. Through conducting the IDA the regulator placed us on their Gradings Under Review (GUR) list. The purpose of this list is to inform stakeholders when risks of non-compliance to RSH standards, or not meeting the expected standards, are being looked into.
As of Wednesday 22nd June 2022, we have been downgraded by the RSH on our governance compliancy. We now hold a non-compliant grading, known as a G3 rating. Our financial viability grading remains compliant, at what is known as a V2 rating. This means we are meeting the expected standards on finance.
You can view our Press Release in response to this announcement, here.
What does this mean for our customers?
In reality, there will be no impact on our customers and our day-to-day services will remain unchanged. We have a robust plan to improve services over the next year to help make customers’ lives easier and our services more accessible. This includes:
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Investing over £5m in homes this year to improve the condition and quality of residents’ homes
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Spending £90m over the coming years sorting building safety issues – for example new fire safety measures
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Making our services more accessible for you to contact us and report a repair
We have put together a series of FAQs which will hopefully answer any questions you may have on this topic.
What was the regulator concerned about?
An area where the RSH thinks we need to improve is around our board governance, in effect how the board operates, and our approach to risk management. We have quickly acted to ensure these areas are improved immediately by strengthening our board with a new Chair and a new Chair of our Audit & Risk Committee. We have also put in place a Governance Improvement Plan which will address the RSH’s concerns.
Is there a risk of SBHA going into administration?
The simple answer is, no. The regulator has confirmed we maintain a compliant financial viability grading and they have the appropriate assurance that our financial plans are consistent with, and support, our financial strategy. Our approved business plan also includes paying for significantly increased building safety costs of £90m.
Am I at risk of losing my home?
No. No one will lose their home because of this announcement.
Is my rent or service charge going to increase because of this announcement?
No. Earlier this year we provided information around changes to your rent and service charges. This announcement will not cause any further changes to those charges.
Are you still eligible for government building safety funding?
We are talking to the Building Safety Fund to see if we can get access to funding. As a G3 rated organization, we are not eligible for government building safety funding.
If we can’t access the fund, this will not impact customers as we have a fully costed business plan that does not include any government funding. The Building Safety Act 2022 puts into law specific protections for leaseholders. Those protections mean we will not pass on to leaseholders the costs of:
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any cladding remediation works that relate to historic defects, as defined by the Building Safety Act 2022; and
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work carried out relating to interim measures – including temporary fire and smoke detection system installations as well as evacuation management costs (i.e. Waking Watch)
Any chargeable non-cladding fire safety work, where required, would be passed to leaseholders as a last resort and will be subject to future consultation and carried out in line with the government guidelines at the time of work.
I am about to exchange contracts with you, does this change anything?
No. This announcement will not impact your house purchase or tenancy agreement in any way.
How will you keep me informed about what you are doing?
On top of regularly updating our customer groups, Resident Voice and the Leasehold Forum, we will give regular updates to all customers via our website and customer newsletter. You can expect to hear from us every few months with an update on this topic. If the regulator makes any future announcements with regards to our gradings we will ensure we proactively communicate this to you.
About Shepherds Bush Housing Association
Part of The Guinness Partnership, we have more than 5000 homes, throughout nine boroughs in west London