Engagement plan from 1 April 2024 to 31 March 2025

Landlord name

Caledonia Housing Association Ltd

Publication date

02 April 2024

Regulatory status


The RSL meets regulatory requirements, including the Standards of Governance and Financial Management.

Why we are engaging with Caledonia Housing Association Ltd (Caledonia) 

We are engaging with Caledonia about its financial management, development plans and because it is a systemically important landlord. 

Caledonia has one registered subsidiary, Cordale Housing Association Ltd.  

We refer to a small number of RSLs as systemically important because of their stock size, turnover or level of debt or because of their significance within their area of operation.  We need to maintain a comprehensive understanding of how their business models operate, and how they manage the risks they face and the impact these may have.  So we seek some additional assurance each year through our engagement plans.  Given a combination of Caledonia's size, turnover and level of debt we consider it to be systemically important.  

Caledonia is one of the largest developers of new affordable housing in Scotland and has plans to grow through a considerable programme of new homes for social rent and low cost home ownership. Caledonia will receive significant public subsidy and has recently arranged new private finance to help achieve this. We will engage with Caledonia to get assurance about how it is managing the risks to the organisation including its levels of debt and development plans. 

Caledonia has experienced issues with a new build development of 30 homes for social rent, resulting in significant development cost increases. Caledonia commissioned an independent investigation into the issues and is progressing the investigation recommendations. This includes establishing the overall financial implications for Caledonia, including the impact of any impairment charges on its loan covenants.    

What Caledonia must do 

Caledonia must:

  • send us copies of its Board and audit committee minutes as they become available; 
  • send us by 30 April 2024:
    • its approved business plan; 
    • its updated risk register including details of its approach to development risk management and mitigation;  
    • 30 year financial projections consisting of statement of comprehensive income, statement of financial position and statement of cash flow complete with assumptions and explanatory narrative;  
    • a comparison of projected financial loan covenants against current covenant requirements;   
    • financial sensitivity analysis which considers the key risks, the mitigation strategies for these risks and a comparison of the resulting covenant calculations with the actual current covenant requirements;  
    • the report to the Board in respect of the approved 30 year projections, sensitivity analysis and covenant compliance;  
    • the report to the Board/appropriate committee about its approach to risk management and mitigation;  
    • an update on the financial implications of the development issue, including an update on engagement with its funders about the impact of any impairment charges on its loan covenants; and  
    • evidence of how it demonstrates affordability for its tenants. 
  • send us the information we require about the new build development issues, including regular updates on its plans to address these; 
  • send us an update on its development programme by 31 October 2024. 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 
  • 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: 

  • review the minutes of the Board and audit committee meetings and liaise as necessary;  
  • observe Caledonia’s Board; 
  • review the business plan and financial information;  
  • meet with Caledonia’s senior staff to discuss the business plan, the financial information and any risks to the organisation; 
  • review the information about the new build development issues and engage as necessary; 
  • review the development update and engage as necessary; and 
  • update our published engagement plan in the light of any material change to our planned engagement with Caledonia. 

Regulatory returns  

Caledonia 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.  

Our lead officer for Caledonia Housing Association Ltd is:

Laura Gillespie

Regulation Manager