HCA downgrades Plus Dane Group
Published by Max Salsbury for 24dash.com in Central Government and also in Finance, Housing
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The Homes and Communities Agency has downgraded the Plus Dane Group, dropping it one notch on the governance scale to G3.
However, the housing association's financial viablity rating, currently set at V2 on the scale, remained untouched.
The HCA explained that the downgrade was given because of significant weaknesses in Plus Dane's strategic planning and control framework, its financial management and its management of risk.
Additionally, the Agency has said that Plus Dane’s governance arrangements have not been adequate to ensure sufficient control of the organisation.
In its regulatory judgement, the HCA said: "The group has experienced a number of challenges over a short period of time. These include weak performance in its unregistered subsidiaries and the identification of risks to the group arising from its pricing of the Ellesmere Port and Neston housing management contract.
"In addition, some recent decisions on growth opportunities have not been considered within an appropriate strategic framework or demonstrated adequate attention to the protection of social housing assets. The group has been slow to strengthen governance and to ensure the board has the expertise it requires to control the organisation effectively."
The Group runs over 18,000 homes across Merseyside and Cheshire and is made up of three separate entities: Plus Dane, Plus Dane (Merseyside) Housing Association Ltd and Plus Dane (Cheshire) Housing Association Ltd.
Despite the downgrade, the HCA has recognised the Group's efforts to turn things around by starting a full strategic review of governance, strengthening its board with new appointments and preparing a full succession planning strategy to establish compliance with the provisions of its code of governance by September 2014.
The Group's chairman, Linda Minnis, said: “As the new chair I have responded swiftly to this decision, and we already have new board members in place and are refreshing our approach to governance, risk and strategic finance.
"Plus Dane has a reputation for delivering excellent services for our residents and their communities and we are working constructively with the HCA to address concerns that we share. We are confident that Plus Dane will grow in strength as a result.”
Chief Executive, Ken Perry said: “After a long period of sustained growth and organisational success, this regulatory decision is disappointing, however Plus Dane will continue to work with the HCA to demonstrate the assurances it seeks. Along with our supportive partners, local authorities and residents we remain focussed on the neighbourhoods we serve."
Both the HCA's goverance and viability scores are set on a 1-4 scale, with 1 being top.