Why we are engaging with Cadder Housing Association Ltd (Cadder)
We are engaging with Cadder about its governance and its financial management.
In 2019 Cadder identified governance weaknesses following an independent investigation. It developed an improvement plan to address the findings and is working to complete the remaining element of the improvement work, a culture change programme.
In May 2022, Cadder instructed a further independent investigation following receipt of potentially serious allegations about the association.
The independent investigation upheld some of the allegations, including that there was failure to operate within respective governance roles, a lack of transparent decision making, weaknesses in procurement and management of conflicts of interest. The report also noted the need for improvement in the strategic management of Cadder’s community centre to achieve its reopening and future viability.
Cadder’s 2022 Annual Assurance Statement identified areas of non-compliance with Regulatory Standard 6 and confirmed it will develop an action plan to address this.
Our assessment is that Cadder does not comply with Regulatory Standards 1 and 6 and we have concerns about its compliance with Regulatory Standard 3 in connection with the financial management of the Community Centre. We are engaging with Cadder to seek assurance about its compliance with regulatory requirements, including the Regulatory Standards, and its capacity and capability to deliver the improvements required.
Cadder has developed some proposals to address the issues, including the recruitment of new members of the Management Committee through an independently supported recruitment exercise. Cadder has commissioned an independent consultant to assist in the production and delivery of an action plan to address the findings of the independent investigation.
Cadder is in the process of preparing a Community Centre Business Plan, including an assessment of its viability in the short, medium, and long-term.
Cadder is working constructively and openly 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 Cadder is working towards compliance with the Regulatory Standards of Governance and Financial Management. We set out below the information that Cadder must provide in order to assure us that it can achieve compliance.
What Cadder must do
- provide us with an action plan to address the non-compliance with Regulatory Standards;
- provide us with monthly updates on progress in delivering the action plan; and
- provide us with the Community Centre Business Plan and projections, setting out the strategy to ensures its financial viability.
What we will do
- review the action plan setting out how Cadder intends to address the non-compliance with Regulatory Standards;
- monitor progress in delivering the action plan;
- review the Community Centre Business Plan and the strategy to ensure its financial viability;
- review our regulatory status in light of this; and
- update our published engagement plan in the light of any material change to our planned engagement with Cadder.
Cadder 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.