Housing association says it is working with the RSH to restore rating

The Regulator of Social Housing has downgraded A2Dominion’s governance status due to concerns about the company’s data management and business planning.

Ian Wardle

Ian Wardle, chief executive of A2Dominion, says he will continue to work closely with the regulator to return to the previous governance rating

In a regulatory judgment published today, the RSH has downgraded A2Dominion’s governance grading to G3, indicating non-compliance with the regulator’s governance standard. The housing association has maintained its V2 financial viability grading.

The 38,000-home association previously held G1 status for governance and V2 status for financial viability when its grading was placed under review by the regulator in September 2023, following some self-referrals.

>> See also: Troubled A2 Dominion posts deficit following write-downs and aborted schemes

>> See also: A2 Dominion confident of increasing development in 2023/24 despite half-year drop

The downgrade of the previous assessment from G1 to G3 “means that there are issues of serious regulatory concern that the provider is working with us to address”, the RSH said.

Grades G1 and G2 indicate compliance with the governance element of the governance and financial viability standard, while grades of G3 and G4 indicate non-compliance.

Similarly, V1 and V2 grades indicate compliance with the financial element and V3 and V4 grades indicate non-compliance.

In its statement regarding the downgrade, the regulator expressed its concerns regarding A2Dominion’s risk management, internal control and assurance framework.

It said it lacks confidence in the effectiveness of A2Dominion’s risk management practices, and that it has failed to manage key risks effectively, which has resulted in some poor outcomes for tenants.

Additionally, the regulator said it was not satisfied with the adequacy of A2Dominion’s data and systems, which had led to poor-quality data and hindered the board’s oversight of the organisation.

In September 2023, A2Dominion posted a £12.8m deficit for the 2022/23 financial year, following write-downs and losses due to aborted developments. 

Harold Brown, RSH’s senior assistant director for investigations and enforcement, said: “We found significant issues with A2Dominion’s data and its business planning, risk and control framework, leading to a failure by the provider to manage key risks effectively. A2Dominion are working with us to address these issues and we will continue to monitor the provider as it works to return to compliance.”

The regulator said that Ian Wardle, A2Dominion’s chief executive, and its chair, Alan Collett, have been proactive in identifying weaknesses and communicating these with the regulator.

Wardle said: “Over the past few months, we’ve been in positive and constructive discussions with the regulator following our self-referrals. We’ve welcomed the opportunity to identify further steps that we can take to make improvements for our customers and the communities we serve.  

“The regulator has confirmed that it has assurance that we have an adequately funded business plan in the short term, sufficient security in place and is forecast to continue to meet its financial covenants. 

“Since I joined in September 2022, working with the then recently appointed new chair, we have appointed many new board members, and have made changes to our management team.  All our colleagues are passionate about what we do. 

“However, in far too many instances, colleagues haven’t had the resources and processes to fully deliver outstanding customer service. It is my job to fix this, and we’ve made improvements throughout 2023, with more planned in 2024.

“At the same time historic decisions on development schemes, tougher trading conditions and rising costs have affected our finances, but we will weather the storm.   

“We’ve already made a number of significant improvements in relation to customer complaints and have prioritised our commitment to social housing as the core of our business, including our exit from care services and fine tuning our development strategy so we can focus on getting things right first time for our customers.

“We also remain financially strong, with an A credit rating from Fitch, £3.6bn of assets, and over £300m of undrawn available facilities.

“I look forward to continuing to work closely with the regulator following their decision, and will collaborate on the steps we need to take to return to our previous rating.”