Housing 21 looks to the future after resolving dispute in Oldham PFI contract
Housing 21 has agreed new contractual arrangements with Oldham Council that will secure the private finance initiative (PFI) contract to build, refurbish and service more than 1400 homes for older people.
The agreement means that Housing 21 and its 100% owned subsidiary, Oldham Retirement Housing Partnership, will complete the rebuilding and refurbishment work over the next 3 years and manage the improved housing stock up to 2036, as agreed in the original contract signed in 2006.
Housing 21 has agreed with Oldham Council a programme of works to rectify problems with earlier building and refurbishment work. Housing 21 has also set aside £12.3m in its accounts published today to cover those one-off costs and deductions related to the project.
Those costs mean the RSL made an operating loss of £4.2m in 2012/13 but Housing 21’s underlying profitability remains positive.
Since the Oldham agreement, it has also agreed the extension of its existing bank funding facilities to ensure the organisation can complete the development programme contracted with Homes and Communities Agency due for completion by March 2015.
Ben Stoneham, chair of Housing 21, said: “We recognise that although this project has already improved the housing conditions and lives of hundreds of older people in Oldham, the original building contract created challenges which have been very difficult. This agreement represents a new start and a change in approach on the building contract work. We can now build on the good relationship already in place with Oldham Council in the operational and housing management elements of the scheme.”
Lord Stoneham also announced that, after helping secure the future of the PFI contract and future development funding, chief executive Pushpa Raguvaran has decided to step down from her role and leave Housing 21.
He paid tribute to Ms Raguvaran’s 17 year career with Housing 21, including four years as chief executive.
“Pushpa has helped transform Housing 21 into one of the leading housing and care providers for retired people in England. Her commitment and sense of duty towards those we serve has been remarkable. That same commitment has led her to accept responsibility for the difficulties experienced in Oldham and her decision to leave Housing 21.”
Ms Raguvaran said: “It has been a privilege to be part of Housing 21 over the last 17 years. I have been inspired by the people and the vision of the organisation and I wish the organisation, its staff and its residents and service users all the best for the future.”
Housing 21 has appointed Bruce Moore as interim chief executive. His appointment will begin on Monday 9 September.
Commenting on the regulatory judgement published by the Homes and Communities Agency (HCA) today, Lord Stoneham acknowledged that the governance and viability showed that improvement is needed.
“It is important to note that these ratings mean we do meet the requirements of the governance and viability standards but we accept the HCA’s warning that we need to act now to address challenges they identified. The judgement noted that we have improved our internal controls over the past year but we are developing a strategy to strengthen them further and improve governance arrangements.”
Alongside the appointment of Bruce Moore as interim chief executive, these measures include appointing three new board members who will begin work in the autumn.
Lord Stoneham said: “Now that our financial position has been stabilised we can concentrate on working with our partners – including our residents and other service users – to provide high quality and innovative retirement housing and care services.”