Richard Hill became One Housing Group’s (OHG) new chief executive in 2017. Steve Douglas was appointed as Chair of the Board a year later.
It took the pair just a couple of years to turn a pre-tax surplus of £82 million as at March 2017 into a deficit of £8.6 million in 2020.
This shocking result is a substantial drop on the previous year’s surplus of over £12 million.
Douglas (left) departed suddenly after just two years to take on a similar role at St Mungos. For the sake of its service users and staff, we can only hope for better results. He was replaced by Caroline Corby. Hill remains in post but for how long?
OHG’s organisational values (right) promise, among other things, that the landlord will keep its promises, communicate openly and honestly, do the right thing not the easy thing, do a great job, go the extra mile, not pass the buck, take ownership, look for ways to improve, take a positive approach, and embrace change that benefits our customers.
So how does an organisation aspring to such a framework end up taking a financial nosedive?
OHG’s board may have promised not to pass the buck, but its members appear to have taken the phrase to mean its precise opposite. In the Financial Statement 2019/20, the executive offer plenty of excuses for the financial decline, but apparently foresaw none of the risks, nor do they accept responsibility for them. Ultimately however, all point firmly to poor governance within the organisation.
Care Services Unprofitable
“Our Seasons Senior Living Care Homes suffered reduced occupancy and increased costs in the fourth quarter of the year as Covid-19 started to impact.”
The organisation points to losses made by its care and support arm due to low occupancy and higher costs. It is worth noting however that the accounts only reach to March 2020, and the deepest effects of the pandemic have not yet played out. Worse can only be expected in the coming year.
“Over the last two years we have exited from seven contracts worth £5m in revenue terms which were uneconomic. In the year ahead, we will continue to critically scrutinise all contracts / activity as these come up for renewal / renegotiation.”
By way of a solution OHG intends a ruthless ditching of services for older and vulnerable people if they fail to generate a profit. This approach stands in stark contrast to valuing a positive approach and embracing change that benefits customers.
The clients of these services may now expect a period of unsettling upheaval and uncertainty as contracts are bartered.
Service Charges Not Recovered
“this was partly attributable to costs being identified after service charges were levied”
In blaming a failure to recover service charge costs from tenants and residents, the executive overlooks the misery that the undeniably poor service delivery has caused to residents.
“service levels for some tenants and leaseholder fell short of the levels to which we aspire, in some cases we felt that to attempt to recover additional sums from tenants and leaseholders would not be appropriate or offer good value for money.”
In reality, an attempt to increase service charges when the standard of work was shoddy and unacceptable would have caused uproar amongst tenants and residents. But the report doesn’t provide reassurance that a repairs and maintainance review will be carried out.
Further, residents whose service charges are not covered by Housing Benefit must now brace themselves for higher bills next year, even if their income has dropped as a result of the pandemic.
Self-Imposed Fire Hazards
“in 2020 there were additional costs relating to fire safety works, where it is uncertain whether these can be recovered.”
This statement is a veiled reference to the fact that prior to Grenfell, OHG clad a substantial number of its buildings in flammable materials. The full number put at risk is unknown as some assessments have not yet been carried out.
That it was OHG board’s decision to use flammable materials is skipped over in their report. And the financial consequences to the landlord are tiny compared to the anguish of the residents living in constant terror of fire breaking out, fear of bankruptcy if they are charged for remedial works, and unsaleable, flammable flats. Instead, the executive sees the problem in purely financial terms, and only as far as it affects them.
Having read the list of excuses, one worker said:
“Currently we are in a standoff with One Housing. They want to push the cost of making buildings safe after the negligent decision to clad them in flammable materials on to leaseholders or staff. Workers will be expected to pay the price in the form of redundancies and wage restraint.”
A leaseholder concurred, adding: “They want the leaseholders to cover the cost and will no doubt increase service charges as well. We must resist this. Government must pick up the tab but in doing so they should be forced to ensure greater accountability over these giants and prevent them from being able to leverage the future of its tenants and workers.”
Tenants and residents have not stayed silent however. The cladding scandal has been reported by SHAC in previous posts, and the group became part of a high profile campaign to #EndTheCladdingScandal involving many OHG residents. Another leaseholder summed up saying:
“It’s their mess, their problem! Social Housing should remain just that and not a vehicle for spivs to use for speculative gain. We are here to fight for decent affordable social housing and secure jobs with decent wages.“
Too Many Repairs
The final flimsy excuse offered by the executive for poor financial performance is that they have paid too much for responsive repairs.
“Responsive repairs tend to be more expensive than planned works and … too high a proportion of overall maintenance cost has related to responsive repairs.”
Many residents strongly disagree, and argue that the landlord has invested too little. As previous SHAC posts testify, residents find no sign of OHG living up to its promise to do a great job and maintain high standards, nor going the extra mile to make sure that they deliver for residents.
Trying to get repairs carried out to a decent standard is a constant source of attrition. Most chillingly, the executive say that they are taking steps to address this, and the only conclusion that can be reached is that service standards will decline further, with directly employed operatives being ejected in favour of the cheapest sub-contractors.
Responsive repairs are needed to address urgent problems: a leaking roof, a faulty boiler, a broken front door lock. So when these occur in the future, residents will face longer delays, greater stress, and even bigger obstacles to get them put right.
An Incompetent Board and Executive
The failure of OHG’s board to acknowledge the role of its own failed governance structures in turning a £12 million surplus into an £8.6 million deficit means that further decline is almost inevitable.
The real tragedy is that if OHG had listened to its tenants, almost all these problems could have been avoided. But there is still no sign of the executive fulfilling their promises to communicate openly and honestly with residents, and to do the right thing not the easy thing.
SHAC has repeatedly tried to establish a dialogue with the executive about the systemic problems within the organisation, but to no avail, mirroring the experiences of tenants when they attempt to engage, either individually or collectively. Unless the speaker is telling the executive what they want to hear, its ears are firmly shut.
A serious, independent review of governance is needed as a matter of urgency.
Tenants and Residents Not Powerless
It has taken high profile public campaigning by SHAC to successfully affect positive change. If you are a One Housing Group tenant or resident, please join us. Register here to join SHAC@OHG.
13 January 2021