On 18 May 2020, the Ministry of Housing Communities and Local Government (MHCLG) wrote to all social housing residents in England (residents).
A sizeable North Lincolnshire social housing provider has learnt the hard way that, whilst honesty is the best policy, it does not mean you’ll evade the consequences of your actions.
Part of a group structure under an unregistered parent company, Ongo Partnership Limited, Ongo Homes has around 10,000 homes and participates in the Local Government Pension Scheme (LGPS). Ongo Homes self-referred to the Regulator for Social Housing (the Regulator) in 2018 after a departing executive was granted early access to their pension, resulting in a significant cost to Ongo Homes.
The Regulator investigated the matter and found evidence of weaknesses in Ongo Homes’ governance, and particularly in the oversight and risk management of their Board. Whilst the decision to grant early access to the pension did not sit with Ongo Homes, the cost incurred did – Ongo Homes is the participating body in the pension scheme, not Ongo Partnership who made the decision. The Regulator found that there were sufficient links with the parent company’s board for Ongo Homes to be aware of what was going on and to trigger the controls and mechanisms in place to manage these types of risks. Their failure to do so has resulted in the downgrading of Ongo Homes to a non-compliant G3 grade. In the words of the Regulator, this means “the provider does not meet our governance requirements. There are some issues of serious regulatory concern and in agreement with us the provider is working to improve its position”.
These are damning words indeed, and we wait to see how this downgrading will affect Ongo Homes’ fortunes in the coming months. Regulatory downgrades can have an impact on financial covenants, making borrowing more expensive.
The following learnings can be taken from Ongo Homes’ misfortune:
- Do not assume that decisions made by a parent company or other member of a group structure will not affect your business;
- Take particular care where both a parent and a subsidiary employ staff and consider the implications for both entities;
- Substantial pension costs are likely to attract the eye of the regulator and take care when making decisions involving granting extra pension benefits, and after taking relevant advice;
- Stay interested and involved in a group structure and be prepared to speak up and trigger necessary mechanisms if concerned; and
- Despite Ongo Homes carrying the can for this, always be prepared to self-refer to the regulator; pro-active notification is always preferable to reactive response.
For more information, please contact Doug Mullen.
For anyone who is currently restrained from holding their General Meeting or have held such in breach of their governing documents, help is on the way!
Social landlords may be surprised to learn that “landlords should be able to carry out routine as well as essential repairs for most households”.
Many housing providers are now re-thinking about gathering information to complete their data return to the Regulator of Social Housing, with the initial exercise having been delayed by Covid-19.
With many premises being left unoccupied (or minimally occupied) during the lockdown, both Public Health England and the Health and Safety Executive have warned of the increased risks of Legionella.
The Court of Appeal judgement in Booth and another v R  EWCA Crim 575 will be welcome news for local authority prosecutors and their investigation teams.
The Local Authorities and Police and Crime Panels (Coronavirus) (Flexibility of Local Authority and Police and Crime Panel Meetings) (England and Wales) Regulations 2020 came into force on 4 April.
The purpose of this 30-minute free webinar is to address how employers navigate homeworking; supporting employees whilst also ensuring that their organisation stays financially viable.
As we make our first tentative steps out of strict lockdown, many of us have been thinking about what the future will look like for charities, both in the short and long term.
The UK Government has, in the last few weeks, introduced a multi-billion-pound package of measures and financial support for businesses and institutions that experience issues with their cash flow.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.