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London landlord rated non-compliant for governance
Following an investigation, the English regulator has downgraded a G15 member to a non-compliant grade for governance.
In a regulatory judgement published today, the Regulator of Social Housing (RSH) has found that A2Dominion has not met the required governance outcomes of the Governance and Financial Viability Standard.
As a result, the landlord has been handed a G3 governance grade, downgraded from G1, after an investigation that was announced in September 2023.
Non-compliant grades are when a provider falls to either a G3 or G4 for governance or a V3 or V4 for financial viability.
A2Dominion’s current V2 grade for financial viability is unchanged.
In September, the 38,000-home landlord revealed that it had fallen to an annual deficit of £12.8m.
On governance, the RSH said it lacks assurance that the association has a robust risk management, internal control and assurance framework that enables it to manage and mitigate risks.
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A2Dominion failed to manage key risks effectively, which has led to some poor outcomes for tenants.
The regulator also lacks assurance that A2Dominion’s data and systems are adequate. These issues have led to the provider producing poor-quality data and hindering the board’s oversight of the organisation.
Harold Brown, senior assistant director for investigations and enforcement at the RSH, said: “We found significant issues with A2Dominion’s data and its business planning, risk and control framework, leading to a failure by the provider to manage key risks effectively.
“A2Dominion are working with us to address these issues and we will continue to monitor the provider as it works to return to compliance.”
In an attempt to grapple with some of these issues, the landlord went on a hiring spree towards the end of last year. This included the appointment of a chief finance officer, a new role at the association as its executive shake-up gathered pace.
Tracey Barnes took on the position after joining the G15 landlord earlier in 2023, initially in one of two top finance jobs at the company that are now being merged.
The changes to its executive team are part of a new corporate strategy under chief executive Ian Wardle designed to tackle the problem.
The plan includes splitting its executive director of operations role to include a chief property officer and a chief customer officer, to “fast-track” its turnaround plans.
Michael Reece, previously operations director, has taken the role of chief property officer under the new structure.
Commenting on the non-compliant grade today, Mr Wardle said: “Over the past few months, we’ve been in positive and constructive discussions with the Regulator following our self-referrals.
“We’ve welcomed the opportunity to identify further steps that we can take to make improvements for our customers and the communities we serve.
“The regulator has confirmed that it has assurance that we have an adequately funded business plan in the short term, sufficient security in place and is forecast to continue to meet its financial covenants.
“Since I joined in September 2022, working with the then recently appointed new chair, we have appointed many new board members, and have made changes to our management team. All our colleagues are passionate about what we do.
“However, in far too many instances, colleagues haven’t had the resources and processes to fully deliver outstanding customer service.
“It is my job to fix this, and we’ve made improvements throughout 2023, with more planned in 2024.”
Mr Wardle also pointed to the impact of historic decisions on development schemes, tougher trading conditions and rising costs on the landlord’s finances but pledged to “weather the storm”.
He added: “We also remain financially strong, with an A credit rating from Fitch, £3.6bn of assets and over £300m of undrawn available facilities. I look forward to continuing to work closely with the regulator following their decision and will collaborate on the steps we need to take to return to our previous rating.”
Last month, A2Dominion set out why it was moving away from providing care services to focus solely on housing “amid the growing challenges faced by the wider care sector”.
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