Why we are engaging with Govan Housing Association (Govan)
We are engaging with Govan about its governance and financial management.
In July 2024, Govan notified us of potentially serious internal concerns that had been raised with it including matters related to its governance and strategic leadership. Govan commissioned independent investigations into these matters. We continued to engage with Govan to seek assurance on its approach to handling these matters and on its governance arrangements to ensure compliance with regulatory requirements including the Standards of Governance and Financial Management (the Standards).
In January 2025, Govan notified us of further potentially serious internal concerns. We engaged with Govan to seek assurance on its response to these matters and its capacity to manage them. Govan took steps to strengthen its governing body with the appointment of three co-optees. Following this engagement, we are seeking assurance that Govan is meeting our Standards, in particular Standards one, four, five and six.
Govan will consider how it will address the findings and recommendations of the investigation reports including a recommendation to urgently complete an independent governance review. Govan is also continuing to consider and progress its response in relation to the governance issues.
In the light of these matters, we decided to update Govan’s regulatory status to under review as we seek assurance about its compliance with our Standards. We and Govan will fully consider the findings and recommendations of the investigation reports, as well as Govan’s response to these outcomes, and seek assurance from Govan about its plans and timescales to address the governance issues it is responding to. This includes seeking assurance from Govan on its plans to commission an independent governance review, the outcome of which will help inform our assessment of whether Govan is meeting the Standards.
Govan has told us it needs to obtain new private finance during 2025/26 to finalise the financial arrangements for its Water Row development. Govan also intends to complete a post-project evaluation to understand any lessons it has learned from the Water Row development.
Govan is engaging openly and constructively with us.
What Govan must do
In order to allow us to complete our review of its regulatory status Govan must:
- send us regular updates on the governance issues;
- tell us when it has fully considered the findings and recommendations of the investigation reports and send us its plans to address these including the timescales for completion;
- tell us its plans to commission an independent governance review along with the timescales for this and share the remit with us;
- tell us when it has completed the independent governance review and share the outcome report(s) with us; and
- send us the information and assurance we require for us to consider whether Govan is meeting the Standards in its handling of these matters.
Govan must also:
- send us by 30 April 2025:
- an update on the borrowing requirement for 2025/26; and
- its latest projected monthly cash flows for the 12 months to 31 March 2026.
- tell us its plans to complete a post-project evaluation of the Water Row development and share the outcome report(s) with us.
What we will do
We will:
- review the regular updates relating to the governance issues and engage as necessary;
- review Govan’s plans to address the findings and recommendations of the investigation reports along with the timescales for completion and engage as necessary;
- review Govan’s plans to commission an independent governance review along with the timescales and consider the remit for this and engage as necessary;
- review the information Govan sends us to consider whether it is meeting the Standards and engage as necessary;
- review the cash flow projections and engage as necessary;
- consider Govan’s plans to complete a post-project evaluation of the Water Row development and review the outcome report(s) and engage as necessary;
- review our regulatory strategy in the light of this; and
- update Govan’s regulatory status when we have completed our inquiries.
Regulatory Returns
Govan must provide us with the following annual regulatory returns and alerts 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.