Why we are engaging with Blackwood Homes and Care (Blackwood)
We are engaging with Blackwood about its financial management, development plans and the transfer of engagements from Abbeyfield Scotland.
In July 2023 Blackwood told us that it was carrying out a strategic financial review. The review highlighted key financial risks for Blackwood relating to its financial planning and performance, including that it was at risk of breaching its loan covenants. Blackwood also told us that it would have to withdraw from its planned new build development programme due to being unable to access lending. We are engaging with Blackwood on the completion of its current new build development programme.
Blackwood’s Annual Assurance Statement, submitted in October 2023, added that the strategic financial review reported that Blackwood was at risk of non-compliance with Regulatory Standard three. We are therefore engaging with Blackwood to seek assurance about its compliance with regulatory requirements and the Standards of Governance and Financial Management (the Standards).
Blackwood has told us that it is taking action to address the immediate financial risks and to ensure its longer term financial health. Blackwood is currently carrying out a strategic options review to assist with developing its future plans.
Blackwood is working openly and constructively with us to address these issues.
Following a successful ballot of its tenants, Abbeyfield Scotland transferred its engagements to Blackwood on 31 August 2022 and was removed from the Register of Social Landlords on 28 January 2023. Since then we have monitored the progress of the integration of Abbeyfield Scotland into Blackwood and the delivery of the commitments Blackwood has made to Abbeyfield Scotland’s tenants.
What Blackwood must do:
In order to allow us to complete our review of its regulatory status Blackwood must:
- confirm the outcome of its plans to address the immediate financial risks;
- send us a monthly update of its cashflow projections for the coming financial year;
- notify us of any issues with the completion of its current new build development; and
- send us any additional financial information as required.
Blackwood must also:
- send us a copy of its updated business plan and financial projections;
- keep us updated on the proposed timeline for its strategic options review and confirm the outcome of this review; and
- send us quarterly updates on progress with the delivery of the commitments it made to former Abbeyfield Scotland tenants.
What we will do:
To allow us to complete our review of Blackwood’s regulatory status we will:
- review the information Blackwood provides regarding its plans to address the financial risks that it faces; and
- update Blackwood’s regulatory status when we have completed our enquiries.
We will also:
- review Blackwood’s updated business plan and financial projections, and engage as necessary;
- review the information Blackwood provides regarding the outcome of its strategic options review, and engage as necessary; and
- review the updates on the delivery of the commitments Blackwood has made to former Abbeyfield Scotland tenants and engage as necessary.
Regulatory returns
Blackwood 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.