In a regulatory judgement published today (18 January 2023), the Regulator of Social Housing has concluded that ForHousing Limited is non-compliant with the governance element of the economic standards and downgraded it to G3 status.
The regulator previously identified issues with ForHousing’s internal controls, decision making and organisational structure. ForHousing agreed to address these issues, but the regulator has concluded that the provider has not delivered the expected improvements.
Insufficient oversight in ForHousing’s governance arrangements, as well as a lack of accountability in the group structure, have allowed a number of potential and ongoing financial, reputational and organisational risks to crystalise. This includes the agreement of executive contracts, incentive schemes and severance arrangements that were not aligned with the provider’s codes of governance, or the standards RSH expects from registered providers.
In response to the regulator’s investigation, ForHousing has started to strengthen its independence within the group by introducing new governance arrangements and making new board appointments.
Harold Brown, RSH’s Senior Assistant Director for Investigations and Enforcement, said:
Our investigation has found issues with the way ForHousing is run, including a lack of independence in its decision making and a lack of accountability in the group structure.
ForHousing has started to improve its governance arrangements and we will continue to monitor the provider as it works to return to compliance”.
Notes to editors
Registered providers of social housing with more than 1,000 units are awarded both governance (G) and financial viability (V) grades for their compliance with the Governance and Financial Viability Standard. Grades of G1 and G2 indicate compliance with the governance element of the Governance and Financial Viability Standard, while grades of G3 and G4 indicate non-compliance. Similarly, V1 and V2 grades indicate compliance with the financial element and V3 and V4 grades indicate non-compliance.
RSH published a previous regulatory judgement for ForHousing Limited on 28 October 2020, in which the regulator identified issues with ForHousing’s governance, which the provider agreed to address. However, as a result of an In Depth Assessment and subsequent investigation, the regulator has concluded that the expected improvements and outcomes have not been delivered. As a result, ForHousing has been downgraded from G2 to G3.
ForHousing remains compliant with the financial viability element of the economic standards and retains its V1 status. The regulator has assurance that ForHousing’s financial plans are consistent with, and support, its financial strategy. The provider has an adequately funded business plan, sufficient security in place, and is forecast to continue to meet its financial covenants under a wide range of adverse scenarios.
RSH promotes a viable, efficient and well-governed social housing sector able to deliver and maintain homes of appropriate quality that meet a range of needs. It does this by undertaking robust economic regulation focusing on governance, financial viability and value for money that maintains lender confidence and protects the taxpayer. It also sets consumer standards and may take action if these standards are breached and there is a significant risk of serious detriment to tenants or potential tenants.