The Regulator of Social Housing has announced that Cheshire-based Auxesia Homes has become the first ‘for profit’ affordable homes provider to breach the regulatory standard.
RSH found that the company was “non-compliant with the Governance and Financial Viability Standard” and “failed to demonstrate that it has an appropriate, robust and prudent risk and control framework in place which requires that there is access to sufficient liquidity at all times.”
The Knutsford-based company was initially set up to provide housing for former armed forces, NHS and emergency services staff, and last year outlined a growth plan to expand its portfolio to 1,300 properties by 2026.
Last year, the business reported a pre-tax loss of £511,000 on turnover of £3.6million, and the judgement found that it had become dependent on selling rental assets with “no contingency plans in place to identify alternative sources of funding should the asset sales be delayed or fail to materialise”.
The RSH said Auxesia “failed to assess, manage, and address risks to ensure the long-term viability of the registered provider”. As a result, the landlord has agreed to implement a plan to improve its business, appointing a full-time finance director, engaging with external consultants and committing to a list of proposed improvements which the RSH will monitor.
Harold Brown, the RSH’s senior assistant director for investigations and enforcement, said: “Our investigation found significant weaknesses in Auxesia’s governance which it needs to address. This includes failing to manage its key risks appropriately, and not having effective financial monitoring processes in place.
“We will continue to monitor Auxesia as it works to resolve its failings and return to compliance with our standards.”
