Phoenix found non-compliant over management of payments, skills gaps and board changes

Phoenix Community Housing has been found non-compliant with the Regulator of Social Housing’s governance and financial viability standard.

The provider, which manages 7,700 homes in Lewisham, south-east London, has been downgraded to G3 for governance which means there are issues of serious concern and it must improve.

In its judgement today, RSH pointed to a lack of sufficient improvement since it told Phoenix in August 2024 that it needed to increase the effectiveness of its internal controls.

It said: “Although Phoenix took steps to develop a governance improvement plan, it failed to ensure that systems and controls around payments were sufficiently robust to ensure covenant compliance.

“While it has managed its position with funders to avoid default, the failings were so serious that we have concluded Phoenix does not meet our governance requirements”.

RSH also said its investigation found Phoenix failed to address skills gaps and “make material decisions relating to board changes in a timely manner”.

It said a combination of “vacant board positions [and] gaps in resourcing and oversight” have resulted in Phoenix not being able to adequately assure RSH of the effectiveness of its governance arrangements.

RSH said: “While steps have now been taken to recruit new, suitably skilled and experienced board members and a permanent chair, we will need further assurance to demonstrate that governance changes are effective particularly in relation to board oversight, challenge and scrutiny to ensure Phoenix’s affairs are managed appropriately”.

Under Phoenix’s tenant-led rules, its board must consist of up to six residents, up to two Lewisham Council representatives and at least four independent members. Its chair must be a tenant.

Resident Gavin Wallen was appointed chair of Phoenix earlier this month as part of its governance shake-up, succeeding Eileen Davies as permanent chair. Phoenix has also appointed two residents to the board with experience of banking or finance in Henrietta Webb and Denise Brown.

RSH awarded Phoenix, whose chief executive is former housing ombudsman Denise Fowler, a C2 consumer grading, the second highest, while it was handed a compliant V2 for viability.

Fowler and Wallen said: “We recognise that there is a lot of work for our board and our organisation to do.

“With a new chair, strengthened board, our excellent staff team and our exceptionally high resident satisfaction and engagement, we can address the issues identified in this judgement. Our financial position also remains strong.”

In other judgements today, RSH downgraded Greensquare Accord from G1 to a compliant G2. RSH found the 25,000-home west Midlands landlord needs to improve its board’s oversight of operational delivery and risk and strengthen internal control arrangements. It received V2 and C2.

Barnet Council, Sutton Council and North East Derbyshire District Council all received the top C1 grade for consumer regulation. Hounslow Council received C2.

Giant London housing association Clarion received the top gradings for governance and viability and a C2 consumer grade.

Latest regulatory judgements