A small London housing co-op is to be wound up after repeated failures to meet the Regulator of Social Housing’s (RSH) governance and financial viability standards.
Brent Community Housing (BCH), a housing co-op which operates property administration and tenancy management services, and owns 19 units of social housing, has passed a resolution for voluntary winding-up.
BCH, a member of the Confederation of Co-operative Housing, first registered in January 2013 and is a fully mutual co-operative, owned by its members and is directed by a management committee drawn from its membership.
The decision was revealed in a regulatory judgement from the RSH on 4 June, which said: “At a General Meeting of the Members of the above-named company, duly convened, and held on 4 June 2021 the following Resolutions were duly passed, as a Special Resolution and as an Ordinary Resolution:
1. “That the Company be wound up voluntarily” and
2. “That Colin Nicholls and Andrew Shackleton of Smart Insolvency Solutions Ltd, 1, Castle Street, Worcester, WR1 3AA, be appointed Joint Liquidators of the Company and that they be authorised to act either jointly or separately.”
The regulator’s insolvency process was triggered by the notice, and the RSH says it will work closely with BCH and its advisors and take into account the needs of its residents.
The co-op ran into trouble with the regulator in July 2019 when it was deemed non-compliant for failing to submit its annual accounts and assurance of its financial viability.
It was put on the RSH’s gradings under review list in December 2020.
In its most recent judgment, on 18 June, the regulator concluded that “BCH remains non-compliant with the Governance and Financial Viability Standard. It has not managed its resources effectively to ensure its viability can be maintained and has not ensured its governance arrangements are effective.”
RSH also found that “BCH has not been able to demonstrate that it has managed its affairs with an appropriate degree of skill, independence, diligence, effectiveness, prudence, and foresight”, and that it “has failed to ensure that it has an appropriate, robust, and prudent business planning, risk and control framework that ensures sufficient liquidity at all times”.
The regulator added: “BCH had been operating with a lack of effective board oversight in a range of areas. This is a fundamental failure of governance and operational control. The impact of this failure is that BCH did not have appropriate probity arrangements in place, and as a result, a material sum of money is unaccounted for. While BCH does now have arrangements in place to allow it to take decisions about its future, this was a serious failure in governance.
“The evidence now available to the regulator demonstrates that BCH is unable to meet its obligations under its lease arrangements as and when they fall due and its financial position is acute. BCH has taken advice on its financial position and following permission by the court, has passed a resolution for a voluntary winding up of the organisation.”
Nic Bliss, head of policy at the Confederation of Co-operative Housing, said: “It is of course sad to hear about the loss of a community organisation. But Brent Community Housing was set up as a short-life housing co-operative to manage homes that were unfit for use through other housing providers.
“Housing associations and local authorities that owned such housing have now largely addressed that problem and have not subsequently had an appetite for enabling community organisations to manage their homes.
“ However, on the other hand, the last few years have seen a substantial growth in other forms of co-operative and community-led housing – and many local authorities and housing associations are embracing community-led housing in other ways.”
He added: “It’s disappointing that such a solution was not available for Brent Community Housing and that the local authorities and housing associations involved were not inclined to support a local community organisation, but the general current trend is towards enabling local people and communities to shape their own housing solutions to deliver fantastic community outcomes.“
BCH has been contacted for comment.