The Regulator of Social Housing (RSH) has published a non-compliant Regulatory Judgement (RJ) for Swan Housing Association Limited. The RSH has assessed Swan as G3 for Governance and V3 for Viability. In its financial statements for the year ended 31 March 2021, Swan disclosed that it owned 10,171 units and managed a further 1,484 units. The RSH had placed Swan on its Gradings Under Review (GUR) list last month because it was investigating matters which may have impacted on Swan’s compliance with the Governance and Financial Viability Standard.
In its previous RJ published in January 2021, Swan was graded G2 for Governance and V2 for Viability. Since the publication of that RJ, Swan’s financial position has deteriorated materially due to significant adverse variance in its future development costs, arising from the ineffective management of its development programme and its development subsidiary. The increased development costs and delays in property sales have increased pressure on covenant compliance, which is now reliant on the continued co-operation and agreement of third parties, representing a fundamental loss of control on the part of Swan’s Board and Executive. The RSH has also lost confidence in the accuracy and reliability of information provided by Swan. Consequently the RSH lacks assurance on the robustness and quality of the data being used by Swan to inform its financial planning and reporting. Furthermore the RSH is not assured that Swan has the capacity to manage its financial exposures or that its mitigation strategies will be effective in practice.
All of the RJs, RNs and GUR listings published by the RSH can be viewed on the RSH’s website here.