Why we are engaging with Abronhill Housing Association Ltd (Abronhill)
We are engaging with Abronhill about its financial management, stock quality and planned organisational changes.
Abronhill has completed a stock condition survey and is planning what further investment is required in the medium term. We will engage with Abronhill to get assurance that the impact of its investment plans has been reflected in its long term financial projections.
Abronhill has one of the poorest compliance levels with the Scottish Housing Quality Standard. We have been engaging with Abronhill over its planned maintenance schedules and energy efficiency plans to bring its stock up to the required standards. It produced a new asset management strategy in 2023/24 which it is now implementing.
Following an independent strategic options appraisal, Abronhill has concluded that it is in the best interests of its tenants and other service users to transfer to another Registered Social Landlord (RSL). Abronhill is developing plans to identify a transfer partner including detailed partnership proposals. It will then finalise a business case for the transfer before developing and implementing plans for consulting its tenants and other service users.
What Abronhill must do
Abronhill must:
- send us by 30 June 2024:
- its approved business plan and updated risk register;
- 30 year financial projections consisting of statement of comprehensive income, statement of financial position and statement of cash flows complete with assumptions and explanatory narrative;
- a comparison of projected financial loan covenants against current covenant requirements;
- financial sensitivity analysis which considers the key risks, the mitigation strategies for these risks and a comparison of the resultant covenant calculations with the actual covenant requirements;
- report to the Board in respect of the approved 30 year projections, sensitivity analysis and covenant compliance; and
- evidence of how it demonstrates affordability for its tenants.
- send us quarterly reports on its progress in implementing its asset management strategy;
- keep us informed as it develops its detailed proposals for a transfer of engagements to another RSL; and
- send us the final business case for the transfer of engagements.
What we will do
We will:
- review the business plan and financial information;
- meet with Abronhill’s senior staff to discuss the business plan, the financial information and any risks to the organisation;
- monitor its progress in implementing its asset management strategy and engage as necessary;
- liaise with Abronhill as it develops its detailed proposals for the transfer of engagements and seek assurance that tenants’ interests are protected;
- review the business case for the transfer of engagements and engage as necessary; and
- update our published engagement plan in the light of any material change to our planned engagement with Abronhill.
Regulatory returns
Abronhill must provide us with the following annual regulatory returns and alert us to notifiable events as appropriate:
- Annual Assurance Statement;
- audited financial statements and external auditor’s management letter;
- loan portfolio return;
- five year financial projections; and
- Annual Return on the Charter.
It should also notify us of any material changes to its Annual Assurance Statement, and any tenant and resident safety matter which has been reported to or is being investigated by the Health and Safety Executive or reports from regulatory or statutory authorities or insurance providers, relating to safety concerns.