RSH issues regulatory judgment for East End Homes Limited

In a regulatory judgment published today (Thursday 25 May), the social housing regulator found East End Homes Limited (East End Homes) non-compliant with the governance element of economic standards and downgraded it to G3 status.

Following a thorough assessment and investigation, the regulator concluded that East End Homes did not have adequate governance, risk management or control frameworks in place. Further, the regulator lacks assurance that the providers’ board of directors has managed the organization with appropriate skill, independence or foresight.

East End Homes has failed to demonstrate that it properly identifies and manages its risks. Problems with supplier data have resulted in a misunderstanding of its tenants’ homes and it is unable to assure the regulator that they meet the Decent Homes standard.

Following the regulators’ investigation, East End Homes commissioned external consultants to develop an improvement plan and asset management strategy. The provider also conducts condition surveys of its tenants’ homes.

Harold Brown, HSRs Senior Deputy Director for Investigations and Enforcement, said:

Our investigation revealed problems in the management of East End Homes, including weaknesses in its board of directors, an inadequate approach to risk management and poor quality data on its tenants’ homes.

East End Homes is working to improve the way it is governed, and we will continue to monitor the provider as they work to return to compliance.

Notes to Editors

1. Registered social housing providers with more than 1,000 units are assigned both governance (G) and financial sustainability (V) ratings for meeting the governance and financial sustainability standard. G1 and G2 ratings indicate compliance with the governance element of the Governance and Financial Sustainability Standard, while G3 and G4 ratings indicate non-compliance. Similarly, scores V1 and V2 indicate compliance with the financial element and scores V3 and V4 indicate non-compliance.

2. East End Homes previous ratings were G1/V2. It is now downgraded to a non-compliant rating for governance (G3). Its viability rating remains at V2. However, there remains little wiggle room with respect to key covenants and he forecasts poor financial performance. Although it has the financial capacity to withstand a reasonable range of adverse scenarios, it has significant risks and must manage them to ensure continued compliance.

3. More information on howHSRregulates against its standards is available in Standards Regulation.

4. HSRpromotes a viable, efficient and well-governed social housing sector capable of providing and maintaining housing of appropriate quality that meets a range of needs. It does this by putting in place strong economic regulation focused on governance, financial sustainability and value for money that maintains lender confidence and protects the taxpayer. It also sets consumption standards and can intervene if these standards are violated and there is a significant risk of serious harm to tenants or potential tenants.

5. For press office contact details, see our Media Inquiries page. For general queries please email [email protected] or call 0300 124 5225.