Bob McDougall

The Regulator appointed a manager and seven members to the governing body in December 2018 after it identified serious weaknesses in the Co-operative’s governance and financial management and failures to comply with regulatory standards.

After a review of the engagement strategy in May this year, the Regulator said it was satisfied that the remit of the statutory manager had been met and it ended the appointment of the statutory manager. The seven appointments to the board were extended until September 2020 to assist Fairfield in implementing its improvement plan and to fully address the areas where it was not compliant with regulatory requirements.

In an updated engagement plan for Fairfield, the Regulator said it has since “continued to engage intensively with Fairfield about the implementation of its governance and financial management improvement plan and the outcome of its strategic options review”.

The report added: “Fairfield continues to make good progress. One of the key elements of its recovery strategy was the delivery of a shared services arrangement with Kingdom Housing Association which will provide chief executive services, governance and organisational support, financial and payroll services and a strategic asset management service. The shared services arrangement came into effect on 1 May 2020. A Joint Project Board involving Kingdom and Fairfield representatives has been established and will monitor and maintain oversight of the agreements.”

In September 2020, Fairfield’s members agreed proposed changes to its constitution which will mean that Fairfield will convert from a fully mutual Co-operative into a registered charitable housing association.

In light of the progress of the shared service arrangements with Kingdom, the Regulator has now decided to reduce the number of statutory appointees on the board from seven appointees to four. The four appointments will continue until March 2021 when the engagement strategy will be reviewed once more.

Fairfield is now working with Kingdom to embed the shared service arrangements and deliver the remaining actions from its improvement action plan to ensure that it is able to comply with the regulatory standards of governance and financial management. This will include a review of its constitutional options and a more formal partnership arrangement with Kingdom. It is developing a timeline for this but COVID-19 will impact on the timescales for this.

Helen Shaw, assistant director of regulation, said: “We have seen positive action and progress by Fairfield in addressing its serious weaknesses. We have reduced the number of appointees to reflect the progress which has been made. The four continuing appointments will support Fairfield as it continues to deliver the further necessary improvements needed to secure a good future for the Co-operative’s tenants and service users.”

Fairfield chair Bob McDougall told Scottish Housing News: “Fairfield HC and Kingdom HA have a long history of positive collaborative working and decided to build on this relationship with Kingdom providing shared services consisting of chief executive and governance support as well as finance and administrative assistance.

“This arrangement was agreed as a precursor to moving towards a more formal constitutional tie-up between the two organisations, assuming the shared service arrangement worked well.

“six months in, things are going very well and the joint project board agreed to oversee the partnership working has been delighted with progress thus far which offers further improvements, potential and possibilities in future. Staff and tenants alike, report improving working practices and services which can only suggest better things to come.”