In a regulatory judgement published today (Wednesday 6 September 2023), the Regulator of Social Housing concluded that Octavia Housing (Octavia) has breached the economic standards and, as a result, it has been downgraded to V3 / G3 status.
RSH lacks assurance that Octavia's financial resources and systems are adequate. These issues have led to the provider producing poor-quality and untimely financial data and setting unrealistic budgets.
RSH also lacks assurance that Octavia has a robust financial plan that it is capable of delivering. Its financial performance has been weaker than budgeted and this has impacted its performance against its loan covenants.
Octavia is working to address the governance and financial viability issues identified by RSH's investigation, in order to ensure its long-term financial viability.
Harold Brown, Senior Assistant Director for Investigations and Enforcement, said:
We found significant issues with Octavia's financial planning, as well as a failure by its Board to have appropriate oversight of the organisation. We expect Octavia to address these issues promptly and return to compliance with our standards.
Notes
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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.
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RSH placed Octavia Housing on the gradings under review list on 31 March 2023 to indicate that it was investigating the provider's compliance with the Governance and Financial Viability Standard.
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Octavia Housing's previous grades were G1/V2. They are now G3/V3.
