In a regulatory judgement published today (23 March 2023), the Regulator of Social Housing concluded that Tower Hamlets Community Housing has breached the economic standards and, as a result, it has been downgraded to V3 / G3 status.
Following an investigation, the regulator found weaknesses in Tower Hamlets Community Housing’s governance and financial position. Its board failed to show that it is managing these risks appropriately, or that it has mitigations in place to ensure the provider’s long-term viability.
Tower Hamlets Community Housing’s financial weakness means that it is unable to meet the costs of its day-to-day operating activities and repair liabilities. In addition, it has relied on poor-quality data when forecasting investment spend for its existing homes.
In agreement with the regulator, Tower Hamlets Community Housing has put a plan in place to improve its governance and address its long-term viability.
Harold Brown, Senior Assistant Director for Investigations and Enforcement, said:
Our investigation found significant issues in the way Tower Hamlets Community Housing is run, including a failure to manage financial risks and reliance on poor-quality data, leaving it with financial weaknesses. It needs to tackle these issues promptly and return to compliance with our standards.
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 placed Tower Hamlets Community Housing on the gradings under review list on 20 December 2022 to indicate that it was investigating the provider’s compliance with the Governance and Financial Viability Standard.
Tower Hamlets Community Housing’s previous grades were G1/V2. They are now G3/V3.