Provider stripped of grant after downgrade
A housing association will have its affordable homes programme grant
reallocated to another provider and has agreed to halt development as a result
of cash flow problems.
Cottsway Housing Association, based in Oxfordshire, was heavily criticised in
a regulatory judgement published today. The 4,000-home landlord told the Homes
and Communities Agency in January that it had identified serious cash flow
problems in October 2012. It had failed to charge properties to support loans
for its affordable homes programmes, meaning it had not secured its loans
against the properties. It then found it did not have enough security to finance
the rest of its affordable homes programme.The HCA will now re-allocate uncommitted grant for 289 homes CHA was unable to deliver under the programme. Inside Housing understands the money, around £6.3 million, will go to Greensquare.
CHA’s viability rating was downgraded to the second highest possible and its governance rating to ‘G3’ meaning there are issues of regulatory concern.
‘The failure of the board and the executive team to identify the charging problem and its impact on the association’s cash flow has called into question the capability of the board and the executive team,’ the judgement said.
The HCA criticised CHA for failing to notify the regulator of the cash flow problems at the time and of also failing to report that its finance director had resigned in October. The judgement said this ‘represents failures to communicate with the regulator in a timely manner’.
The HCA did say however that CHA has now addressed short term solvency issues and has agreed not to go ahead with planned development which is not yet contracted.
It appointed a new interim chief executive Owen Ingram, at Easter. Mr Ingram said CHA has ‘clear plans’ to address the issues identified by the regulator. The HCA has issued its latest batch of regulatory judgements today.
Cottsway Housing Association in Oxfordshire has been downgraded, and has had grant removed, following problems with its affordable homes programme.
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| Vernon House being demolished |