Sustain UK handed V3 grading
The Regulator of Social Housing has downgraded a supported housing provider in Birmingham and placed Phoenix Community Housing on its review list.
Sustain UK, which was founded in 2009 and provides supported housing through short term leases, has been handed a V3 rating, meaning it does not meet the regulator’s financial viability requirements.
The Regulator of Social Housing (RSH) said the provider had “not demonstrated it is able to manage its financial risk and that its business planning is sufficiently robust to ensure its long-term viability”.
It identified “poor accounting and lack of clarity over its management fee and service charges” and said it had not provided adequate assurance that its financial forecasts are “based on appropriate and reasonable assumptions”.
“It appears Sustain is not ensuring its claims for service charges are accurate, which leaves it exposed to financial risks,” it added.
The regulator’s previous G3 governance grading remained unchanged, with arrangements deemed not effective to ensure adequate oversight of the third parties it relies on to deliver services.
The previous judgement that Sustain is not delivering the outcomes of the Rent Standard also remained unchanged.
Sustain operates 1,684 units of supported housing, with services to tenants delivered by approximately 88 management agents, typically under three-year lease agreements.
It employs the full-time equivalent of 28 staff members and reported income of £19.6m in the year ended 31 March 2024.
According to the non-profit company’s LinkedIn page, many of its residents have mental health issues, learning difficulties, or are recovering from drug and alcohol dependency.
Jonathan Walters, deputy chief executive of RSH, said: “It is disappointing that Sustain has not made the necessary improvements in its governance since the last judgement.
“Failing to meet the requirements of the rent standard in this case has given rise to serious financial risks.
“It must now take effective action to demonstrate a financial plan that is based on appropriate and reasonable assumptions that protects its homes and delivers quality services for its tenants.”
Ian MacGregor, chief executive of Sustain, told Housing Today: “I’m disappointed to learn that Sustain UK has been downgraded by the Regulator of Social Housing.
“Sustain UK acknowledges that it has been noncompliant with the Regulator’s Rent Standard for a number of years, and that our approach to achieving compliance must now change.
“We will now take this opportunity to consider the Regulator’s feedback, before setting out our measures for ongoing change and improvement.
“I’d like to reassure our residents, and local stakeholders, that Sustain UK remains firmly committed to maintaining and raising standards across supported accommodation in the Midlands.”
>>See also: RSH data reveals half of tenants unhappy with landlord complaint handling
The RSH has also announced that Phoenix Community Housing Association was on its gradings under review list, meaning it is aunder investigation and could breach standards.
It said it was “investigating matters which may indicate serious failings in the landlord delivering the outcomes of the Governance and Financial Viability Standard and the Consumer Standards”.
The housing association, which owns and manages around 7,600 homes in Lewisham, south London, currently has regulatory grades of G2/V2/C1.
Phoenix’s acting chair Michael Tisdell and chief executive Denise Fowler said: “The regulator has raised a number of issues with us which we acknowledge.
”Our Board and our Executive Team take these issues extremely seriously and are working to address them as a matter of priority, while ensuring we continue to deliver homes and services that meet our residents’ needs.”
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