Why we are engaging with Linstone Housing Association Ltd (Linstone)
We are engaging with Linstone about its governance, financial management and tenant and resident safety.
Linstone notified us about an employment matter in February 2021. It commissioned an independent review of this matter and the circumstances leading up to it, which identified some weaknesses in Linstone’s governance in June 2021. We engaged with Linstone about the findings of the review, and Linstone’s board has decided to commission a comprehensive independent review of its governance to ensure compliance with the Regulatory Standards of Governance and Financial Management (the Regulatory Standards).
Linstone has told us that it has one active member of Strathclyde Pension Fund. We require additional assurance on the current position and further understanding of its pension arrangements.
In January 2022, as part of our annual risk assessment, we issued a short tenant health and safety survey to all social landlords. The purpose of the survey was to provide us with more information about how landlords gain assurance that they comply with all their legal duties and responsibilities in relation to health and safety.
In its survey response, Linstone told us that it has been addressing weaknesses in its approach to tenant and resident safety since summer 2021. Our review of the information provided by Linstone has identified areas of non-compliance with its tenant and resident safety duties. Specifically, this is in relation to the management and control of asbestos and legionella. Linstone has put temporary measures in place to mitigate any risks it considers there to be to tenants and others, and has developed a plan to address the non-compliance. Linstone’s plan also includes implementing a number of new health and safety policies, and it has made good progress implementing this plan.
However, Linstone did not notify us of the non-compliance when this became known. We will engage with Linstone to seek assurance about how it will ensure compliance with regulatory guidance on Notifiable Events, which will be assessed by the upcoming independent governance review. Linstone has worked openly and constructively with us about this.
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 Linstone is working towards compliance with the Regulatory Standards of Governance and Financial Management. We set out below the information that Linstone must provide in order to assure us that it can achieve compliance.
What Linstone must do
Linstone must:
- provide regular updates on progress with the independent review of its governance and compliance with the Regulatory Standards;
- send us by 31 May 2022:
- the latest professional advice received in respect of their pension arrangements;
- an update on what provision has been made for the possible cessation costs;
- an update on what plans, if any, are proposed to consider changes to pension fund membership; and
- details of any agreements in place to transfer pension liabilities back to a former employer;
- provide monthly updates on progress with implementing its tenant and resident safety plan; and
- provide us with assurance about how it will ensure compliance with our regulatory guidance on Notifiable Events.
What we will do
We will:
- review progress with the independent review of its governance and compliance with the Regulatory Standards and engage as necessary;
- review Linstone’s pension arrangements and engage as necessary;
- review the information Linstone provides regarding its tenant and resident safety plan and engage as necessary;
- consider the action Linstone will take to ensure compliance with regulatory guidance on Notifiable Events; and
- update our published engagement plan in light of any material change to our planned engagement with Linstone.
Regulatory returns
Linstone 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.