Mayor freezes funding to three social housing providers after failures to maintain acceptable standards

The Mayor of London, Sadiq Khan, has frozen funding to three social housing providers in London in a crackdown on poor performing landlords in the capital.

Following a review by the Mayor’s Housing and Land team, ChristianActionEnfield, Industrial Dwellings Society and Swan will receive no funding for additional Affordable Housing Programme (AHP) projects and City Hall has restricted their formal ‘Investment Partner’ (IP) status until further notice.

The Mayor has led the way on taking tough action to raise standards in social housing to ensure that all Londoners have good quality homes and an acceptable level of service provided by their landlord.

In September, Sadiq’s Deputy Mayor for Housing and Residential Development, Tom Copley, wrote to investment partners to set out the actions City Hall will take if the Regulator of Social Housing issues either a non-compliant grade or a Regulatory Notice against a housing provider. Both notices indicate that a provider has breached a consumer or economic regulatory standard.

This action was subsequently echoed nationally, with the Levelling Up Secretary, Michael Gove, introducing similar measures in the rest of the country following the tragic death of toddler, Awaab Ishak. Awaab died in December 2020 from a respiratory condition caused by mould at his home in Rochdale.

If providers are not compliant with regulatory standards (including non-compliant grades for governance and viability) or have an active Regulatory Notice, the new City Hall rules mean that the Mayor can withdraw or restrict Investment Partner status. This will then restrict the amount of capital that the provider can access.

ChristianActionEnfield was downgraded for weaknesses in financial governance, including inadequate financial monitoring and board reporting and a lack of effective board oversight and scrutiny. Industrial Dwellings Society self-referred to the Regulator and were downgraded because of mould and damp issues at Evelyn House. Swan breached the Home Standard which sets expectations for registered providers of social housing to provide tenants with quality accommodation and a cost-effective repairs and maintenance service.

Although most of the Mayor’s devolved housing funding is used for new-build homes, he is determined to use his powers to drive up standards in existing housing stock - whether or not it was funded by City Hall - and to champion tenants’ concerns over poor standards and services. 

Mayor of London, Sadiq Khan, said: “I am doing everything in my power to drive up the quality of housing in the London, which is why I’ve put in place these funding restrictions for three social housing providers who have failed to meet both the standards that City Hall expects and that Londoners deserve. 

 

“London is building some of the most impressive new affordable homes in the country, but it is vital that existing residents experience high standards too.

 

"The tragic death of the toddler, Awaab Ishak, shined a light on the appalling conditions many people are living in and I simply will not tolerate any more needless deaths because of poor housing. That’s why I will not only continue to take action in London, but put pressure on the Government to also take responsibility for pushing for higher standards and to provide additional funding.

 

“We owe it to all Londoners to provide better, safer and fairer housing in the capital.”

 

Darren Hartley, Chief Executive of TAROE Trust, said: “The freezing of grant for Investment Partners sends a clear message to landlords that the Mayor is taking seriously the needs to drive up minimum housing standards for tenants across the sector. Poor housing conditions can no longer be tolerated. It seems wrong to be funding landlords to develop new properties when they need to get their existing homes in order. We are also reassured that funding will be diverted to ensure there is no reduction in supply, so the position should be positive all round for tenants.

 

Notes to editors:

• The letter Deputy Mayor for Housing and Residential Development wrote to investment partners in September can be read here
• In December 2022, the Regulator for Social Housing downgraded nine organisations with whom the Greater London Authority has live contracts. In accordance with our framework for managing performance, these providers were reviewed in the context of their London provision. 

• The GLA has a Memorandum of Understanding with the Regulator, with the purpose of the two organisations consulting and co-operating with each other.
• The Mayor’s Affordable Homes Programme funds genuinely affordable homes for Londoners delivered by councils and housing associations

• Organisations delivering housing through the Mayor’s Affordable Homes Programme must be qualified as an investment partner. 

• Under the current regulatory regime, the Regulator of Social Housing may issue non-compliant grades only for housing associations; Regulatory Notices may be issued to both housing associations and councils.
• The restrictions which may be imposed on investment partners include a pause on the following: 

Entering new GLA capital funding contracts for affordable housing;  

Accessing grant for additional projects under existing funding agreements; 

Drawing down grant for projects under agreed (‘indicative’) funding arrangements 

Claiming grant on any project which has yet to have an initial grant claim accepted; 

All AHP funding.