Why we are engaging with BT Loch Aillse agus an Eilein Sgitheanaich Ltd - Lochalsh and Skye HA Ltd (Lochalsh and Skye)
We are engaging with Lochalsh & Skye about its financial management and development plans.
Lochalsh & Skye has plans to grow through a programme of new homes for social rent and mid-market rent and will receive significant public subsidy to achieve this. Lochalsh & Skye has told us it needs to obtain new private finance during 2026/27 to support its development plans. We will engage with Lochalsh & Skye to get assurance about how it is managing the risks to the organisation including its levels of debt and on-going development plans.
What Lochalsh and Skye must do
Lochalsh and Skye must:
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send us by 30 April 2026:
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its approved business plan and updated risk register;
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30 year financial projections comprising a statement of comprehensive income, a statement of financial position and a statement of cash flows complete with assumptions and explanatory narrative;
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a comparison of projected financial loan covenants against current covenant requirements;
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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;
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report to the Board in respect of the approved 30 year projections, sensitivity analysis and covenant compliance; and
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evidence of how it demonstrates affordability for its tenants.
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send us an update on its development programme by 31 October 2026. 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
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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:
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review the business plan, financial and supporting information;
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meet with Lochalsh and Skye’s senior staff to discuss the business plan, financial and supporting information and any risks to the organisation;
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review the development update and engage as necessary; and
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update our published engagement plan in the light of any material change to our planned engagement with Lochalsh and Skye.
Regulatory Returns
Lochalsh and Skye must provide us with the following annual regulatory returns and alerts us to notifiable events as appropriate:
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Annual Assurance Statement;
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audited financial statements and external auditor’s management letter;
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loan portfolio return;
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five year financial projections; and
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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.