Why we are engaging with BT Loch Aillse agus an Eilein Sgitheanaich Ltd (Lochalsh and Skye)
We are engaging with Lochalsh and Skye about its governance.
Following our engagement in 2023 Lochalsh and Skye commissioned an independent review of its compliance with regulatory requirements including the Standards of Governance and Financial Management (the Standards) and provided us with the results of this review in January 2024. We updated our assessment in March 2024 and concluded that Lochalsh and Skye did not comply with regulatory requirements including Standards one, four, five and six.
During 2024 Lochalsh and Skye developed a revised governance action plan to address the issues identified and to achieve compliance with regulatory requirements including the Standards. In October 2024 Lochalsh and Skye submitted its Annual Assurance Statement that identified that it had largely completed its governance action plan and was non-compliant only with Standard one.
We have reviewed monthly updates on Lochalsh and Skye’s progress in implementing the revised governance action plan and other information Lochalsh and Skye has provided regarding its governance improvements since October 2024. Our assessment is that Lochalsh and Skye has made significant progress in delivering the improvements in the governance action plan. Lochalsh and Skye is now compliant with Standards one, four and six but remains non-compliant with Standard 5 in relation to equalities requirements. Lochalsh and Skye does not yet have an effective approach to equalities data collection. We saw large proportions of missing data for some protected characteristics for its tenants. Lochalsh and Skye confirmed it had tried to collect this data but it will commission further work to ensure it has a more robust approach.
We are engaging with Lochalsh and Skye to seek further information and assurance about its plans to improve its approach and outcomes in equalities data collection.
Lochalsh and Skye is working openly and constructively with us.
Our current assessment is that Lochalsh and Skye is non-compliant and is working towards compliance with the Regulatory Standards of Governance and Financial Management. We set out below the information that Lochalsh and Skye must provide in order to assure us that it can achieve compliance.
What Lochalsh and Skye must do
Lochalsh and Skye must:
- send us updates on the progress on implementing the final elements of its governance action plan; and
- provide us with the further information and assurance we require on its governance improvements to achieve compliance with Standard 5.
What we will do
We will:
- review the updates and progress on implementing the final elements of its governance action plan;
- review the information Lochalsh and Skye provides regarding its governance improvements to achieve compliance with Standard 5; and
- 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 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.