Why we are engaging with Blackwood Homes and Care (Blackwood)
We are engaging with Blackwood about its governance, financial management, and the transfer of engagements from Abbeyfield Scotland.
We began engaging with Blackwood in July 2023 when it told us that it was carrying out a strategic financial review. This 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 told us that it was facing immediate financial risks, which it was working to address, and that it would have to withdraw from its planned new build development programme due to being unable to access lending. Blackwood also told us that it was taking action to ensure its longer-term financial health. This led us to put Blackwood’s regulatory status to under review and we asked Blackwood to provide us with information that would allow us to make an assessment of their compliance with the Regulatory Standards of Governance and Financial Management (the Standards), as well as to provide us with assurance that it had plans to address the immediate financial risks.
Blackwood has provided us with assurance that it has taken action to address the immediate financial risks. However, our review found that Blackwood has weaknesses in its approach to business planning, and Blackwood’s own assurance processes failed to identify this. Blackwood had also been slow to identify financial risks and had made errors in its financial assumptions. This increased the financial risks for Blackwood, and it has been required to dispose of a number of properties under development to address the material financial shortfall caused by these errors.
Our review also highlighted weaknesses in the quality of information that the governing body receives, including that relating to business planning, financial planning and changes to services received by some of Blackwood’s tenants.
We completed our review of Blackwood’s compliance with the Standards in October 2024 and concluded that Blackwood does not comply, or has only partial compliance with the Standards, specifically Standards one, three and four. This is due to material weaknesses in Blackwood’s approach to business planning, financial management and governance.
Blackwood completed an independent review to assess its compliance with the Standards in March 2025. We will engage with it as it implements the recommendations from this review.
Blackwood is implementing the recommendations of the strategic financial review through a restructure of the organisation and by remodelling how it delivers some of its services.
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. Blackwood has told us that due to continued low demand for some former Abbeyfield properties, and Blackwood’s changed financial position, it will remodel how it provides services to some former Abbeyfield tenants. It is currently consulting with tenants on these planned changes. We will engage with Blackwood to understand the impact of this.
Our current assessment is that Blackwood in non-compliant and is working towards compliance with the Regulatory Standards. We set out below the information that Blackwood must provide in order to assure us that it can achieve compliance.
What Blackwood must do
Blackwood must:
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put in place a comprehensive business plan that clearly sets out its strategic objectives and risk management plans;
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implement the recommendations of the independent review of its compliance with the Standards and provide us with monthly updates on progress with this;
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implement the recommendations of the strategic financial review and provide us with monthly updates on progress with this and the savings generated;
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send us management accounts quarterly;
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send us a quarterly update of its cashflow projections for the coming financial year;
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send us monthly updates on progress with remodelling services for former Abbeyfield tenants; and
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send us any additional financial information as required.
What we will do
We will:
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review Blackwood’s progress in developing and finalising a business plan and engage as necessary;
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review Blackwood’s progress with the implementation of the recommendations from the independent review of compliance with the Standards and engage as necessary;
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review Blackwood’s progress with the implementation of the recommendations from the strategic financial review, including plans to restructure its business, and engage as necessary;
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review the financial information that Blackwood provides and engage as necessary; and
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review the updates on progress with remodelling services for former Abbeyfield 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:
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Annual Assurance Statement;
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audited financial statements and external auditor’s management letter;
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loan portfolio return;
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five year financial projections; and
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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.