The Regulator of Social Housing has published judgements finding serious failings with Two London housing providers, Aves Housing (Aves) and YMCA Thames Gateway (YMCA TG).
Following an investigation, RSH found that Aves is not meeting the Governance and Financial Viability Standard or the Rent Standard. Aves claims to provide supported social housing in London. It leases the homes and provides tenant services alongside a third party that owns many of them. RSH’s findings follow a First Tier Tribunal judgement about benefit appeals and action taken by eight London boroughs to stop almost all payments – due to concerns that the housing is not exempt accommodation and there was no entitlement to housing benefit.
The Tribunal found that Aves made substantial profits for a third party that had control over its operations and overcharged for services. The Tribunal also found that the tenants did not need support or were not provided with support as claimed. In addition, licence agreements had taken advantage of housing benefit rules that allow for enhanced payments. Aves failed to self-refer to RSH following the Tribunal judgement.
RSH has found fundamental failings in the way Aves is run, and has concerns that it has given up control of its business and is not operating as a genuine not-for-profit. Aves has not shown that the board has enough skill, capacity and independence to manage its affairs. RSH expects Aves to get independent assurance to show that it is keeping tenants safe in their homes and mitigating potential risks.
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Aves has not shown that it can manage material financial risks. It relied on housing benefits and higher rates of rent as its main income. This has now reduced significantly following action taken by local authorities to stop payments. Aves has also failed to show that its rents are set in a way that meets RSH’s Rent Standard and that they are below market rate.
Although the regulator wishes to continue working intensively with Alves, the information provided so far has been inconsistent and contradictory, and RSH is reviewing all options, including the use of enforcement powers.
Jonathan Walters, Chief Executive of RSH, said:
“Supported accommodation is vital to serve some of the most vulnerable people in society. We will absolutely not tolerate cases where social landlords misrepresent their status as not for profit to take advantage of enhanced housing benefit payments, or charge higher rents when they are not justified.
“We have serious concerns about Aves’s ability to solve these issues. Our scrutiny will remain intensive and, if Aves cannot or will not put things right, we will consider using our regulatory and enforcement powers. We continue to work with local authorities and other public bodies to ensure that social landlords meet their responsibilities.”
RSH also published a regulatory judgement for YMCA Thames Gateway (YMCA TG) following an investigation.
YMCA TG does not have an up to date understanding of the condition of tenants’ homes. The landlord also cannot show that it meets all legal health and safety requirements, or that it is providing an effective repairs service.
YMCA TG has not effectively managed its risks, which has led to a significant deterioration in liquidity and a failure to ensure covenant compliance. While YMCA TG has managed its position with funders, it has placed its social homes at risk.
YMCA TG’s board has been taking steps to address its acute viability position and ensure that its social homes are protected, and it is working positively with RSH.
