Why we are engaging with Milnbank Housing Association Ltd (Milnbank)
We are engaging with Milnbank about its governance, financial management, stock quality and development plans.
In October 2024, we received information that suggested Milnbank had failed to notify us of stonework falls in accordance with our statutory guidance on notifiable events. We engaged with Milnbank and it confirmed that there had been some stonework falls dating back to as early as 2023. Milnbank has now submitted retrospective notifiable events about this.
Milnbank is carrying out a programme of interim repairs to address any immediate risks to tenant and resident safety and is also taking forward plans to permanently resolve the issue. This will require substantial remedial work and investment. We are engaging with Milnbank to get assurance about tenant and resident safety and the steps it is taking to ensure it understands the requirements in relation to notifiable events.
Milnbank has plans to grow through a programme of new homes for social rent and will receive significant public subsidy to help achieve this. It is in the process of arranging new private finance to support its development plans. We will engage with Milnbank to get assurance about how it is managing the risks to the organisation including its levels of debt and on-going development plans.
Milnbank’s external auditors made recommendations in their audit for the year ended 31 March 2024 including some that were carried forward from the previous year. The internal auditors also made a number of recommendations. We will engage with Milnbank to get assurance that the recommendations are being addressed.
What Milnbank must do
Milnbank must:
- by the end of July 2025, send us the information we require on its stock condition and stonework surveys and how it will address the findings, particularly to ensure the safety of its stonework;
- provide us with assurance about the steps it is taking to ensure it can comply with the statutory guidance on notifiable events;
- send us by 31 July 2025:
- 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;
- evidence of how it demonstrates affordability for its tenants; and
- an update on its progress in implementing the recommendations from the auditors, and relevant Board reports and minutes.
- send us an update on its development programme by 31 October 2025. This will include its latest report to the governing body/appropriate committee about development and details of the scale and tenure mix, timescales for delivery and any material delays or changes to the programme; and
- tell us if there are any material adverse changes to its development plans which might affect its financial position or reputation, in line with our notifiable events guidance.
What we will do
We will:
- review the information Milnbank sends us on its stock condition and stonework surveys and the steps it is taking to ensure tenant and resident safety, and engage as necessary;
- engage with Milnbank about how it will ensure future compliance with the statutory guidance on notifiable events;
- review the business plan and financial information including its progress in obtaining additional private finance and engage as necessary;
- meet with Milnbank’s senior staff to discuss the business plan, financial information and any risks to the organisation;
- review the development update and engage as necessary; and
- update our published engagement plan in the light of any material change to our planned engagement with Milnbank.
Regulatory Returns
Milnbank 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.