Withdrawn Regulatory Notice: RCVDA Community Housing C.I.C (18 November 2022)
Updated 20 December 2022
Applies to England
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This publication is available at https://www.gov.uk/government/publications/rcvda-community-housing-cic/regulatory-notice-rcvda-community-housing-cic-18-november-2022
Withdrawn on 20 December 2022: RCVDA Community Housing C.I.C de-registered on 15 December 2022.
RSH Regulatory Notice
- Provider: RCVDA Community Housing C.I.C
- Regulatory code: 5108
- Publication date: 18 November 2022
- Reason for publication: Economic Standards
- Regulatory route: Reactive Engagement
Other providers included in the judgement
None
Regulatory Finding
The regulator has concluded that:
a) RCVDA Community Housing C.I.C (RCVDA HCIC) is 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.
b) RCVDA HCIC has not been able to demonstrate that it has managed its affairs with an appropriate degree of skill, independence, diligence, effectiveness, prudence and foresight.
c) RCVDA HCIC 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 Case
The regulator has concluded that it lacks assurance and evidence that RCVDA HCIC is compliant with the governance and viability elements of the Governance and Financial Viability Standard. Specifically, the regulator has found that RCVDA HCIC has inadequate business planning, and risk and control frameworks commensurate for the activities of this small eight unit housing provider. RCVDA HCIC had received public funding from Homes England to undertake a development and it had failed to adequately manage the project.
RCVDA HCIC engaged a developer to deliver its development activity which subsequently entered liquidation. The evidence available to the regulator demonstrated that RCVDA HCIC had a lack of effective oversight of its development activity. This resulted in an acute financial position and it being unable to meet its contractual development obligations as and when they fell due. This is a fundamental failure of governance and operational control.
As a result of its financial position, RCVDA HCIC entered into the regulator’s intensive engagement and insolvency processes and a 28-day moratorium was triggered. RCVDA HCIC’s board subsequently agreed to transfer its assets and liabilities to another large registered provider (Home Group Limited), ensuring that once the transfer is complete, the social housing assets and tenants remain in the sector and insolvency is averted. This informed the regulator’s decision to cancel the moratorium and not to make formal proposals under section 145 of the Housing and Regeneration Act 2008 or to seek to apply for an Housing Administration Order.
About the provider
RCVDA HCIC is a not-for-profit provider that registered with the regulator in 2020. It is a private company limited by guarantee without share capital and is non-charitable. RCVDA HCIC currently manages eight units of supported housing in one owned property.
About our Regulatory Notices
Regulatory notices are issued in response to an event of regulatory importance (for example, a finding of a breach of the Rent Standard or of a consumer standard that has or may cause serious harm) that, in accordance with its obligation to be transparent, the regulator wishes to make public. More detail about Regulatory notices is set out in Regulating the Standards.