Why we are engaging with Charing Cross Housing Association Ltd (Charing Cross)
We are engaging with Charing Cross about its governance, financial management, tenant and resident safety and its planned transfer of engagements to West of Scotland Housing Association Ltd (West of Scotland).
Charing Cross carried out an independent review of its compliance with the Regulatory Standards of Governance and Financial Management (the Regulatory Standards). This was completed in September 2019. The review identified material non-compliance with the Regulatory Standards. Charing Cross did not take effective action to address its governance and financial management weaknesses which contributed to this non-compliance. We were not assured the governing body understood the seriousness of these weaknesses, and it failed to demonstrate a willingness and ability to take the actions needed to comply with Regulatory Standards.
We also engaged with Charing Cross regarding allegations relating to breaches of its Code of Conduct.
In December 2020 Charing Cross decided to implement a number of actions to address its weaknesses. At our request it co-opted four individuals to the governing body to improve its capacity and support it to make the necessary improvements. It agreed to develop its governance improvement plan to address the findings of the governance review and to carry out an independent investigation into the allegations regarding breaches of its Code of Conduct. It also agreed to take steps to address a number of other governance issues we raised with Charing Cross including its management of proxy voting at general meetings.
In May 2021 Charing Cross concluded a strategic options appraisal and decided it wished to seek a partnership with another RSL. It advertised for partners and following an evaluation process it decided a transfer of engagements to West of Scotland would be the best option to ensure it meets Regulatory Standards and to protect the interests of tenants and other service users. Charing Cross consulted its tenants about a proposed transfer of engagements to West of Scotland. In June 2022, in an independent ballot, 72.4% Charing Cross’s tenants voted on the proposals with 96.1% voting in favour of a transfer of engagements. Charing Cross will continue to work with West of Scotland as it prepares for a transfer of engagements in summer 2022.
Charing Cross undertook a review of its compliance with its tenant and resident health and safety duties. This found non-compliance with its tenant and resident health and safety duties. Charing Cross developed an improvement plan to address the findings and with the support of its transfer partner is making good progress in addressing the weaknesses.
Charing Cross is now engaging openly and constructively with us as it takes forward action to address its weaknesses, including progressing its transfer proposals. It has made progress in identifying a wide range of historic governance, financial management and service issues and is taking appropriate action to try to address these, but the scale of the weaknesses identified is a matter of concern for 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 Charing Cross is working towards compliance with the Regulatory Standards of Governance and Financial Management. We set out below the information that Charing Cross must provide in order to assure us that it can achieve compliance.
What Charing Cross must do
Charing Cross must:
- keep us informed as it works through its proposals for a transfer of engagements to West of Scotland including the outcome of the Special General Meetings;
- implement its revised governance improvement plan;
- work openly and co-operatively with the co-opted governing body members;
- keep us informed about its progress in addressing the weaknesses in its management of its tenant and resident safety duties; and
- send us papers and minutes for its governing body meetings.
What we will do
- engage with Charing Cross as required as it progresses the transfer of engagements to West of Scotland;
- liaise as necessary to ensure it meets Regulatory Standards and tenants interests are protected;
- review Charing Cross’s progress in addressing the weaknesses in its management of its tenant and resident health and safety duties;
- keep our regulatory strategy under review and adjust it in response to emerging risks and issues; and
- update our published engagement plan in light of any material change to our planned engagement with Charing Cross.
Charing Cross 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.