Why we are engaging with Blochairn Housing Association Ltd (Blochairn)
We are engaging with Blochairn about its governance, financial management, planned organisational changes and tenant and resident safety.
In September 2022, Blochairn identified a number of areas of non-compliance with regulatory requirements including the Standards of Governance and Financial Management (the Standards) following an independent governance review.
The areas of non-compliance included business planning, risk management, the governing body’s understanding of its role and its effective control of decision making within the organisation, the quality of the information provided to the governing body, tenant and resident safety, internal audit and internal processes and policies.
Our assessment was that Blochairn did not comply with Standards one, two, three, four, five and six. Blochairn developed an improvement plan in order to progress a significant programme of improvement to address the weaknesses in its governance and is working to deliver the necessary improvements to ensure compliance with the Standards.
During 2023/24 a stock condition survey was undertaken and identified the need for increased investment in Blochairn’s homes to continue to meet housing quality standards. We will engage with Blochairn to get assurance that the impact of its investment plans has been reflected in its long term financial projections which it has recently submitted.
Blochairn developed a business plan and submitted this to us. It also completed a strategic options appraisal and has obtained external advice and support on procurement and maintenance as well as restarting its internal audit programme. It is also looking to strengthen its governing body.
Following the strategic options appraisal, Blochairn has concluded that it is in the best interests of its tenants and other service users to transfer to another Registered Social Landlord (RSL). Blochairn now plans to identify a transfer partner and to develop 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.
Following an investigation in 2019, Blochairn was advised of a potentially serious tenant and resident safety issue affecting three of its buildings. The investigation’s recommendations were not taken forward at the time. Blochairn has commissioned a further independent assessment of the three buildings to better understand the issues and to identify any measures that may be required to address any risk.
Blochairn is working constructively and openly with us.
The Housing (Scotland) Act (2010) requires us to monitor and assess the financial well-being, governance and performance of each Registered Social Landlord (RSL).
Our current assessment is that Blochairn is non-compliant and is working towards compliance with the Regulatory Standards of Governance and Financial Management. We set out below the information that Blochairn must provide in order to assure us that it can achieve compliance.
What Blochairn must do
Blochairn must:
- send us monthly updates on its progress in implementing its improvement plan to address the weaknesses in its governance and to achieve compliance with the Standards;
- send us by 30 April 2024:
- its approved business plan and updated risk register; and
- evidence of how it demonstrates affordability for its tenants.
- keep us informed as it develops its detailed proposals for a transfer of engagements to another RSL and the outcomes of its consultation with tenants;
- send us the final business case for the transfer of engagements;
- keep us informed on progress and send us the report on the independent assessment of the potential tenant and resident safety issue and update us on its plans for any required remedial works; and
- keep us updated about its approach to mitigating any risks with the potential tenant and resident safety issues and its approach to communicating with tenants.
What we will do
We will:
- review the updates on progress in implementing its improvement plan to address the weaknesses in its governance and to achieve compliance with the Standards and engage as necessary;
- arrange to observe a governing body meeting and provide feedback;
- review the business plan and financial information;
- meet with Blochairn’s senior staff to discuss the business plan, the financial information and any risks to the organisation;
- liaise with Blochairn 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;
- review the outcomes of the independent assessment of the potential tenant and resident safety issue and Blochairn’s plans for any required remedial works and engage as necessary;
- review Blochairn’s approach to mitigate any risks with the potential tenant and resident safety issue and its approach to communicating with tenants and engage as necessary;
- review our engagement with Blochairn on an ongoing basis; and
- update our published engagement plan in the light of any material change to our planned engagement with Blochairn.
Regulatory returns
Blochairn 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.