Why we are engaging with Reidvale Housing Association Ltd (Reidvale)
We are engaging with Reidvale about its governance, financial management and stock quality.
We initially engaged with Reidvale in March 2019 as our annual risk assessment had identified that a majority of board members had been in place for more than nine years. We were also aware that Reidvale had not recently assessed its compliance with the Regulatory Standards of Governance and Financial Management (the Standards).
Following our engagement, Reidvale commissioned an independent review of its compliance with the Standards. This review, completed in September 2019, found that there were a number of areas where Reidvale was non-compliant with the Standards. The areas of non-compliance included demonstrating strategic control, the development and monitoring of its Business Plan, risk management, the lack of appropriate processes to assess the skills and experience needed on the management committee, the appraisal processes for staff and board members and succession planning.
Reidvale developed a governance improvement plan. It co-opted three individuals on to its governing body to support it to take forward the necessary improvements.
Reidvale commissioned a further review of its compliance with the Standards in November 2020. The review identified some progress in relation to delivering improvements but found continued serious weaknesses in compliance with the Standards. The review specifically raised matters relating to Reidvale’s Business Plan and rent affordability.
It also became apparent that Reidvale’s expenditure in some areas such as staff salaries was high in comparison to similar Registered Social Landlords (RSLs). Reidvale commissioned an organisational review to consider this further. It highlighted serious weaknesses in Reidvale’s organisational structure and raised further concerns regarding Reidvale’s compliance with the Standards.
Reidvale also carried out a stock condition survey in order to understand its future maintenance requirements and incorporate that information into its strategic and financial planning. The stock condition survey report was produced in January 2022 and highlighted significant investment requirements. Reidvale developed a one-year investment programme which prioritised failing stonework in its pre-1919 properties.
In April 2022 Reidvale concluded that it was in the best interests of its tenants to seek a transfer of engagements to a Registered Social Landlord (RSL) which met regulatory requirements including the Standards. The majority of tenants who voted in a ballot of all Reidvale’s tenants in 2023 supported the proposed transfer to Places for People Scotland. However, Reidvale did not secure the two-thirds of voting shareholders that it requires to approve the outcome of the ballot of its tenants, and on that basis, could not proceed with the transfer of engagements to Places for People Scotland.
We asked Reidvale to provide us with a plan setting out how it will address its serious weaknesses and comply with all its legislative and regulatory obligations. We also asked Reidvale to provide us with updated 30 year financial projections and assumptions. Reidvale provided its plan setting out the work it will do to improve its evidence base on compliance including a review of its compliance with the Standards and survey work to clarify the cost of stonework and component replacements in its homes. We engaged with Reidvale to seek assurance that the plan will address its serious weaknesses, ensure compliance with its legislative and regulatory obligations and that it has the capacity to deliver on its plan. In February 2025 Reidvale provided us with its new Business Plan, Asset Management Strategy and set of 30 year financial projections.
Reidvale notified us that some of its shareholding members had requested a Special General Meeting (SGM) be held to remove some governing body members and replace them with new members. The SGM took place on 25 March 2024 and elected five new members to the governing body. The governing body then co-opted a further four new members and put in place new interim senior officer arrangements.
We have been engaging with Reidvale about the outcome of the SGM and its plans for induction and training of governing body members to seek assurance about the capacity of the governing body to address its significant weaknesses. Reidvale has since provided induction and training to all governing body members.
In its most recent Annual Assurance Statement submitted in October 2024, Reidvale confirmed its continued non-compliance with Standards one and three and that it was working to resolve these issues by developing a new Business Plan, Asset Management Strategy, a set of 30 year financial projections and by moving to full membership of EVH, including using its pay system, to ensure that staff remuneration packages are in line with sector norms.
Reidvale is engaging openly and constructively 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 Reidvale is non-compliant and is working towards compliance with the Regulatory Standards of Governance and Financial Management. We set out below the information that Reidvale must provide in order to assure us that it can achieve compliance.
What Reidvale must do
Reidvale must:
- provide us with the information we require on its plan to address its serious weaknesses and ensure compliance with its legislative and regulatory obligations;
- keep us informed about its progress in addressing the safety of its stonework; and
- provide us with monthly updates on progress with its revised governance and financial management improvement plan to achieve compliance with the Standards.
What we will do
We will:
- consider the Business Plan, investment plans and revised 30 year financial projections and engage as necessary;
- consider the updates on progress with the revised governance and financial management improvement plan and engage as necessary;
- consider the information Reidvale provides us about its progress in addressing the safety of its stonework and engage as necessary;
- review our regulatory strategy in the light of this; and
- update our published engagement plan in the light of any material change to our planned engagement with Reidvale.
Regulatory Returns
Reidvale must provide us with the following annual regulatory returns and alerts 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.