Regulator to rap Gallions over ‘serious detriment’

Gallions Housing Association’s board is understood to have signed off the lump sum for chief Tony Cotter, who was made redundant last month ahead of the landlord’s planned merger with Peabody.

Several sources confirmed the payment was around £400,000. The serious detriment finding relates to an alleged failure to comply with gas safety regulations in a single property, which put the tenant at risk of harm.

The Homes and Communities Agency regulation committee this week agreed that this alleged failure would amount to a breach of its ‘serious detriment’ test. This finding was due to be published as Inside Housing went to press.

As a result, the south London association will be placed on the HCA’s new ‘watchlist’ – a roll call of organisations causing concern, Inside Housing understands.

The news marks an ignominious curtain call for the 6,500-home landlord which is due to merge with Peabody next year.

The finding of serious detriment would be the first since the HCA took on the new and slimmed down ‘consumer regulation’ role from its predecessor, the Tenant Services Authority last April.

At least 130 complaints in this category have been considered by the HCA’s consumer regulation panel since then, according to figures obtained by Inside Housing in June.

HCA concerns about Mr Cotter’s payoff are understood to have delayed its decision to sign off what Peabody describes as its ‘grouping’ of Gallions.

The HCA is also unnerved by Gallions’ decision to make Mr Cotter redundant before the grouping had been finally agreed. The merger is still set to go ahead, Inside Housing understands.

A formal HCA report on Gallions is due to be released within weeks. The regulator is considering downgrading the association’s governance rating - the only way it can express its displeasure at how large pay awards
are agreed.

Sector figures were divided about the developments at Gallions. Several were shocked at the scale of the payoff; others described the serious detriment finding as ‘harsh’ and ‘unfair’, given that it relates to a single property.

Mr Cotter’s last published salary of £185,000 would push him to the top of Inside Housing’s ‘pay-per-home’ ranking of England’s largest 100 housing associations. According to Gallions’ 2011/12 annual report, he was paid £28.46 for each of the 6,500 homes owned or managed.

This compares with £19.51 for John Synnuck of Swan Housing Group, who was the highest paid in this category according to our annual salary survey. Gallions was not included in the survey due to its relatively small size.

The HCA agreed to publish a ‘watchlist’ of associations which caused it concern as part of its response to a highly critical report by the Communities and Local Government select committee.

A spokesperson for Gallions said: ‘Tony Cotter left Gallions on 30 September after 17 years of service.’ The association could not comment on his settlement due to a standard confidentiality agreement and said it would comment on the serious detriment allegation once the HCA’s judgement had been published.