Troubled lease-based provider owed more than £13m by local authorities

My Space’s accounts, published at the end of January, show more than £13m outstanding from local authorities for more than one year, but it notes “100% success rate when cases are eventually taken to a tribunal”.

More than £9m was expected to be recovered between March and the end of the year, but the outstanding figure is part of the reason why its liabilities exceeded assets by £7.8m at the time the accounts were published.

The charity enters into long-term lease agreements with real estate investment trusts in exchange for inflation-linked payments.

It then rents homes out to residents who can claim higher rates of benefit from local authorities because they have supported-housing needs. The authorities are then supposed to pay benefits to cover the rent. 

Elsewhere, its accounts show the provider spent just over £1.2m on repairs and maintenance in 2021 to meet the requirements set out under the Decent Homes Standard.

The provider’s earnings before interest, taxes, depreciation and amortisation (EBITDA) rate fell from 481.8% to 15.4% year on year.

At the same time, its operating margin fell from 21.7% to 4.7%.

The accounts also show that two executive officers, a company secretary and eight of 11 directors have resigned since July last year. 

In October, the charity watchdog opened a statutory inquiry into My Space after it found that payments of more than £1m were made to nine of its trustees over seven years.

In response, My Space said: “The charity, through the use of sound financial controls, has implemented a robust financial plan, and the deficit relates to a doubtful debt provision as outlined within the accounts. 

“The current liabilities exceed the charity’s current assets by £7.8m after adjusting for trade and other debtors not received within one year of the balance sheet date. Without this adjustment, the liabilities do not exceed the current assets and the charity continues to confirm the collectability of these debtors post one year.”

The charity said it continued to work with the RSH and the Charity Commission on all aspects of its compliance and is recruiting new trustees alongside its “discussions with Enabling Homes, who have indicated continued support pending a reconciliation of the balances”. 

My Space told Inside Housing that, in line with the English regulator’s enforcement notice, it has written to all local authorities where it has concluded that not all of its stock may meet the definition of specialised supported housing, however, all of its stock does meet the definition of supported accommodation and continues to fulfil the criteria for exempt accommodation.