Engagement plan from 31 March 2022 to 30 March 2023

Landlord name

Forth Housing Association Ltd

Publication date

31 March 2022

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 Forth Housing Association Ltd (Forth)

We are engaging with Forth about its governance and development plans.

In September 2021 we received information that led us to review Forth’s regulatory status. The information related to potential failures of governance and internal financial control that were subject to two independent investigations. We required Forth to provide us with the investigation reports as well as information about its leadership capacity, risk management, management of conflicts of interest and compliance with regulatory requirements.

The investigation reports and a finance review (September 2021) and Forth’s full response (October 2021) identified evidence of serious failings in Forth’s control of payments and benefits, ethical standards, management of conflicts of interest, allocations practices and concerns regarding the culture of the organisation.

Forth appointed an interim senior officer in July 2021. Forth’s senior officer left the organisation in October 2021.

Forth’s Annual Assurance Statement (AAS, November 2021) identified material failures in Forth’s compliance with the Regulatory Standards of Governance and Financial Management (the Regulatory Standards). This included failures in relation to delays in giving information to SHR, holding the senior officer to account, managing conflicts of interest and ensuring the senior officer has the necessary skills.  

Forth provided its one year business plan to us in November 2021. There were gaps in the business plan including in the areas of risk management, prioritising tenants and service users and stock information. Forth does not have an asset management strategy and there are weaknesses in the reliability of Forth’s stock condition information. 

We are engaging with Forth to establish the full extent of the compliance failures and to seek assurance about its capacity and capability to deliver the improvements required. We are also engaging with Forth regarding allegations relating to breaches of its Code of Conduct.

Forth plans to carry out an independent governing body skills assessment, governance review, evidence review of its AAS and a lessons learned exercise following the findings of the independent investigations. It has commissioned additional expert assurance, culture change and improvement support. Some of this work has started. Forth is also seeking additional members for its governing body to support its improvement activities.

Forth plans to commission a stock condition survey, carry out an options appraisal and will review its business plan. Forth has commissioned an allocations audit and an audit of its Annual Return on the Charter (ARC).

Forth is working constructively and transparently with us. Forth provided its improvement plan to us in March 2022 setting out how it intends to address all of the improvement areas identified and achieve compliance with the Regulatory Standards and requirements.

Forth has plans to grow through a programme of new homes for social rent, and will receive significant public subsidy to help achieve this. The number of affordable homes provided by Forth will increase by around one fifth over the next five years. We are now seeking assurance that Forth remains a suitable recipient of public and private funds.

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 Forth is working towards compliance with the Regulatory Standards of Governance and Financial Management. We set out below the information that Forth must provide in order to assure us that it can achieve compliance.

What Forth must do

Forth must:

  • provide us with regular updates on progress towards the delivery of its improvement plan;
  • update its knowledge of its stock condition information and develop an asset management strategy;
  • provide us with assurance around the measures it is taking to strengthen its governing body;
  • share with us the outcomes of its options appraisal, independent assurance work and audits;
  • send us by 30 June 2022:
    • its approved business plan and report to the governing body about the plan; and 
    • its updated risk register.
  • send us an update on its development programme by 31 October 2022. This will include 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:

  • engage with Forth’s interim senior officer and governing body to seek assurance about its governance;
  • assess Forth’s improvement progress;
  • meet with Forth’s senior staff to discuss the business plan and other information;
  • review the development update and liaise as necessary;
  • review our regulatory strategy in light of this; and
  • update our published engagement plan in light of any material change to our planned engagement with Forth.

Regulatory returns

Forth 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 Forth Housing Association Ltd is:

Eleanor Sneddon

Regulation Manager