In a revised engagement plan, the Regulator said the decision has been taken following “significant improvements” to the governance and financial health at the Co-operative.

The Regulator first used its statutory powers to appoint a manager and seven members to the Co-operative’s governing body in December 2018 after it identified “serious weakness in governance and financial health”.

Since then, Fairfield has worked closely with the Regulator to make progress and has entered into a Collaborative Working Agreement with Kingdom Housing Association for the provision of shared services.

Bob McDougall, chair of Fairfield, said: “This is a significant milestone for Fairfield. I feel the decision of the SHR confirms the confidence they have that we will address and implement the required improvements. The primary aim for us is to improve the governance arrangements to ensure the Fairfield tenants receive the best possible services and value for money and I feel we are delivering on this objective. I’d like to thank all the appointees and my fellow Committee members for their hard work which has got us to this stage.”

Bob added: ”We do however realise that a fair bit of work still remains to be done and a comprehensive programme has been developed to address the remaining actions. Part of this is considering a constitutional change for Fairfield, which if approved, would see the organisation change from a fully mutual co-operative to a charitable housing association.”

From May 1, Fairfield and Kingdom Housing Association entered into a shared services agreement, for the provision of chief executive, governance, finance and strategic asset management services. The potential benefits associated with this arrangement are recognised in Fairfields recently published Engagement Plan, where it states that one of the key elements of Fairfield’s recovery strategy was the delivery of a shared services arrangement with Kingdom.

Helen Shaw, assistant director of regulation at the Scottish Housing Regulator, said: “Fairfield has worked co-operatively with us to deliver significant improvements in its governance and financial management.

“The Co-operative has also set up a collaborative working agreement with Kingdom Housing Association to ensure it has the support it needs to comply with Regulatory Standards. 

“We’ve continued our appointments of the seven members to its governing body to ensure it has the support it needs to provide effective leadership and strategic direction and ensure it sustains the improvements it has made.”

The Regulator will review its appointments to the governing body in September this year.