Housing Governance

Peabody & Catalyst 

We advised Peabody Trust and Catalyst Housing Limited on their merger. This created one of the largest registered providers of social housing in the country. Our involvement included advice on, but not limited to:

• due diligence
• consumer credit registration requirements
• HR and pensions
• reformulation of the group’s governance framework
• regulatory notifications
• applications to the registrar
• post-completion restructuring and governance arrangements.

Catalyst Housing Group

Over the last three years we have supported Catalyst on the re-structure of its group, including its merger with Aldwyck and subsequent consolidation, and its most recent merger with Rosebery. This has included:

• Participation in working group meetings and advising the boards throughout the process
• Advising on regulatory considerations. For example, we advised on the Regulator’s expectations in relation to the role of the boards and working groups during the merger, business case requirements, resident consultation, best practice in structuring commercial and development activities, delegations frameworks and various governance matters (such as terms of office, decision mapping, allocation of responsibilities)
• Direct liaison with the Regulator and Homes England as required
• Advising on and implementing the transfer of engagements from Aldwyck to Catalyst, and consequential issues relating to staffing and pensions (including managing the admission of Catalyst to SHPS)
• Harmonising constitutions across the group
• Re-structure of subsidiaries, including the dissolution of a historic charity within the group, and the re-structure/re-purpose of duplicate commercial subsidiaries
• Implementing contractual arrangements including intra-group agreement, back office service provision, development services and repairs and maintenance services
• Support with joint venture arrangements.

ForHousing

We undertook a comprehensive review of ForHousing group’s corporate structure and associated legal arrangements to reflect its new strategic objectives and commercial strategy. Specific areas of focus included:

• ring-fencing social housing assets from the group’s commercial activities as far as possible
• increasing the effectiveness and agility associated with the group’s funding arrangements
• reviewing the current loan structures and providing a full options appraisal for the board to determine which is the most suitable route to achieve its strategic objectives, including providing advice around the vires position relating to exercise of investment powers
• advising on pensions and employment matters.

Our recommendations were accepted by the Board in June 2021 and we have since implemented the changes, with the re-structure completing on 31 March 2022. This matter was strategically important to ForHousing to ensure that its structure is fit for purpose, reflects its values and to ensure that the commercial and social aspects of the business are ring-fenced as far as possible in line with ForHousing’s charitable and regulatory obligations.

Together Housing Group

We advised Together Housing Group on its group re-structure and consolidation. This included:

• Undertaking an options appraisal relating to the various methods to consolidate five housing associations into one, and devising a recommendation based on the group’s strategic objectives and the various business constraints. This included consideration of restrictions in loan agreements, pensions and HR arrangements, and relationships with stakeholders.
• Advising on associated regulatory issues, including undertaking an activities assessments to inform the re-structure (some of the consolidating entities were non-charitable) and associated consent and notification requirements. This included direct liaison with the Regulator at various points
• Ultimate merger of five housing associations into a single entity and the conversion of the parent company into a charitable community benefit society
• Liaising with lenders to obtain their consent
• Employment and pensions issues, including ensuring no exit debts were triggered by the merger and obtaining required lenders’ consent to the changes to pension arrangements
• Advising on the various board and membership consents
• Local authority consents, as several members of the group were stock transfer associations
• Advising on and drafting new group constitutions
• Contracts with third parties.

We continue to advise the group on all aspects of its business, including continued assessment of its corporate structure. This has led to subsequent instructions to convert one of the group’s dormant community benefit societies into a company, so that it can be re-purposed (thereby avoiding the need to obtain consent from funders to set up a new subsidiary).

Governance Helpline

We run a governance helpline and offer packages of training sessions for governance teams. Most recently we ran this for a large association whose governance manager was on maternity leave to help with capacity and upskilling within the team. This included training on:

• Community benefit societies - key differences with companies
• Charity law requirements relating to the group’s activities and structure – and key risks to look out for
• Regulatory requirements and internal processes to demonstrate compliance.

We have supported many housing associations to devise (and collapse) corporate structures to deliver their activities in the most risk and tax efficient way possible. For example, we supported a medium sized association on the formation of two new subsidiaries to support its development and trading activity. The development vehicle would enable the association to claim back VAT on its development costs, and the trading vehicle enabled it to undertake non-charitable activity in a tax efficient way through gift aiding profits back into the charitable parent.