Report shows association was so badly governed regulator had to take over control to protect tenants
A catalogue of “fundamental failings” stemming from systemic weaknesses led to Scotland’s housing regulator taking control of a troubled housing association, a report published today reveals.
The Scottish Housing Regulator (SHR) said it took statutory intervention to protect tenants’ interests at Glasgow’s Wellhouse Housing Association.
Wellhouse suffered from systemic weaknesses and so failed to meet regulatory standards. It suffered fundamental failings in internal systems, management over-ride of internal controls and poor decision-making, the report shows.
The association also submitted inaccurate and misleading regulatory returns and misled its tenants about its performance.
Some decisions resulted in poor outcomes for tenants, said the regulator, including financial loss.
Christine Macleod, director of governance and erformance at the SHR, said: "We intervened at Wellhouse as the serious failures presented an immediate risk to tenants’ interests. There was bad practice, bad governance and inappropriate behaviour at Wellhouse.
"Those in leadership in the organisation let down tenants, and they lost sight of its purpose to be a good landlord.
"Wellhouse presented itself as an organisation that performed well but it misled its tenants and others. We needed to intervene to prevent further financial losses and further risk to the interests of the association’s tenants.”
Maureen Morris, chair at Wellhouse, said the last few years had been the most trying times in its history but said the issues highlighted in the intervention report were firmly in the past.
"We have worked openly and constructively with the SHR throughout this period and, indeed, continue to do so whilst we move to a refreshed and renewed organisation,” she said.
"We have a strong management committee and a new management team who will make us fit for the future across all governance, strategic and operational areas and truly make Wellhouse the place to be. I look forward to a bright future."
In response to the report, Glasgow and West of Scotland Forum of Housing Associations (GWSF) chair Peter Howden said: “What happened at Wellhouse was deeply disturbing and we must all learn from it.
"But we know that the vast majority of community based housing associations are very well run and provide really good services and support to the communities they serve.
“GWSF is committed to working with members, SHR and our partner organisations to promote high standards of governance and financial management to ensure that our sector is vibrant and resilient well into the future.
“In the meantime, it has been heartening to see the management committee and new staff team lead the recovery at Wellhouse, which is now forging ahead with an exciting new future as an independent housing association.”
Christine Macleod of SHR went on to say: “With the support of independent co-optees on the management committee and our appointed manager, Wellhouse recognised the scale of its failures, addressed its weaknesses and is now committed to becoming a good landlord.”
The regulator ended the appointment of the statutory manager in December 2016 after the association delivered improvements to strengthen its governance and financial controls.
SHR said it will continue to have high engagement with the association as it continues to improve.
