Engagement plan from 22 October 2021 to 31 March 2022

Landlord name

Charing Cross Housing Association Ltd

Publication date

22 October 2021

Regulatory status

Working towards compliance

The RSL does not meet regulatory requirements, including the Standards of Governance and Financial Management, and it is working to achieve compliance.

Why we are engaging with Charing Cross

We are engaging with Charing Cross about its governance and financial management and its partnership proposals with West of Scotland Housing Association (West of Scotland).

COVID-19 has significantly impacted the services provided by social landlords.  We will continue to monitor, assess and report upon how each landlord is responding and we will keep our regulatory engagement under review so that we can continue to respond to the challenges of COVID-19.

In May 2021 Charing Cross concluded its strategic options appraisal and decided it wished to seek a partnership with another RSL.  It advertised for partners and following an evaluation process has decided a transfer of engagements to West of Scotland is the best option to ensure it meets Regulatory Standards and to protect the interests of tenants and other service users. Charing Cross will now consult its tenants about a proposed transfer of engagements to West of Scotland. 

We originally engaged with Charing Cross as the Chair had been in post for 19 years. Nine out of twelve Management Committee members had also been on the Management Committee for over nine years. We identified this issue through our annual risk assessment. We engaged to seek assurance about its approach to governing body recruitment, skills assessment, performance evaluation and succession planning.

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 Management Committee 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 have 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 Management Committee 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 January 2021 we decided to monitor Charing Cross’s progress in taking forward a number of agreed actions. These were to:  

  • develop and start to implement a governance improvement plan to address its non-compliance with the Regulatory Standards of Governance and Financial Management;
  • carry out an independent and robust investigation into the allegations regarding breaches of its Code of Conduct and act on the findings;
  • work openly and co-operatively with the co-opted Management Committee members and take action to further improve the capacity of the Management Committee;
  • provide us with assurance it fully complies with its obligations in relation to tenant and resident safety;
  • act on the findings of its internal audit investigation into the management of proxy voting at general meetings;
  • send us papers and minutes for its Management Committee meetings;
  • keep us informed about progress with its strategic options appraisal and share the outcome of the options appraisal with us;
  • take action to address the additional governance concerns we have raised with it; and
  • send us by 30 April 2021:
    • an update on the borrowing requirement for 2021/22; and
    • if additional borrowing is still required its latest projected monthly cash flows for the 12 months to 31 March 2022.

We planned to review our regulatory strategy in May 2021 but delayed this to allow Charing Cross further time to assess compliance with its health and safety duties and to complete the investigation into alleged Code of Conduct breaches.

Charing Cross is now engaging openly and constructively with us as it takes forward its agreed actions to address its weaknesses. 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 being identified and Charing Cross’s capacity to address them continues to be a matter of concern.

The investigation into alleged Code of Conduct breaches found evidence of serious breaches of the Charing Cross’s Code of Conduct.  Following consideration of the report two members of the Management Committee have resigned.  The findings of the report have raised further serious concerns about Charing Cross’s governance.

Charing Cross has taken action to try to address serious weaknesses in its management of proxy voting at general meetings including amending its constitution to improve oversight of proxy votes.

In addition to the work set out above Charing Cross has also commissioned an investigation into its handling of procurement issues following serious weaknesses which were identified during an internal audit.

We are continuing to engage with Charing Cross as it undertakes a review of its compliance with its tenant and resident health and safety duties.  We are also seeking assurance about the outcome of its investigation into procurement issues.

The Housing (Scotland) Act (2010) requires us to monitor and assess the financial well-being, governance and performance of each Registered Social Landlord.

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 about progress with its proposed transfer to West of Scotland and the outcome of its consultation with tenants;
  • send us its final business case in support of its proposals for a transfer of engagements to West of Scotland;
  • ensure that it meets statutory and regulatory requirements in relation to the proposed transfer of engagements particularly in relation to tenant consultation;
  • implement its governance improvement plan to address its non-compliance with the Regulatory Standards of Governance and Financial Management;
  • work openly and co-operatively with the co-opted Management Committee members and take action to further improve the capacity of the Management Committee;
  • keep us informed about its review of compliance with its tenant and resident safety duties;
  • keep us informed about the outcome of its investigation into procurement issues; and
  • send us papers and minutes for its Management Committee meetings.

What we will do

We will:

  • engage with Charing Cross about its plans to transfer its homes to West of Scotland to seek assurance tenants interests are protected;
  • monitor the progress Charing Cross makes with its agreed actions and liaise as necessary to ensure it meets Regulatory Standards and tenants interests are protected;
  • 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.

Regulatory returns

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.

The lead officer for Charing Cross Housing Association Ltd is:

Paul Milligan

Regulation Manager

Scottish Housing Regulator
Buchanan House
58 Port Dundas Road
Glasgow G4 0HF

0141 242 5869