LETTER TO ALL BOARD MEMBERS 2021

TO: ACCENT BOARD MEMBERS

Safeguarding Concerns

Please find attached a letter sent to Mr David Royston, Director of Finance which I believe raises material safeguarding issues at Accent Housing. The type of abuse of an adult at risk can take many forms. It can be physical (violence), discriminatory (race, gender, age, disability, or financial abuse). The one I wish to bring to the Board’s attention is financial abuse.

Financial and material abuse is a crime. It is the use of a person’s property, assets, income, funds or any resources without their informed consent or authorisation. This abuse can take many forms. It includes theft; fraud; coercion in relation to an adult’s financial affairs or arrangements, such as wills, property, or financial transactions; exploitation or the misuse or misappropriation of property, possessions, or benefits. It would include the presentation of accounts for expenses not incurred, asymmetrical information regarding contractual obligations and denial of information from a position of power to make an informed decision. The neglect and acts of omission can be intentional or unintentional.

Using this perspective, I would like the Board of Accent to review the attached letter and ask themselves does Accent Housing have adequate systems of governance and oversight to ensure, that what has happened to myself and the residents on my estate is not being repeated across its wider portfolio?” My situation is not unusual, and the practices employed by Accent shown in the attached letter, I believe are widespread across Accent’s portfolio.

There are instances of where pensioners are charged for audited accounts by Accent in the Accountant’s name, yet the document they receive are not even accounts, and when they write to the accountant for clarity, the same accountant then refuses to even certify them.

There are other instances where residents have managed to secure the Right to Manage away from Accent and the new the managing agents have clawed back 10’s of thousands in service charge costs which were not valid.

When Accent’s senior management are approached for answers, they get others to reply on their behalf who are not qualified to answer the questions raised. For instance Robert Bloom is a recent appointment to the Head of Home Ownership despite previously being a sales person for their shared ownership division. He is now tasked with replying to letters addressed to David Royston (Finance Director) on financial irregularities. He is neither qualified nor has the information to answer the questions raised. I believe this allows him to make statements without recourse to a professional body.

• I am a leaseholder of a flat in Hemlington, near Middlesbrough. The Freeholder is Accent Housing, who is a registered social housing provider which 20,000 houses nationally. Accent recently attempted a merger with PA Housing in March 2021, which would have created a super-sized housing association with 40,000 homes nationally. This merger was abandoned in May 2021.

• In 2005 and 2007 there were two separate FTT cases concerning my estate. The FTT ruled in favour of the leaseholder on both occasions. The issues related to both fictitious service charge costs and inflated management fees. The crux of the case is that the FTT ruled that Accent could not charge 6x the management fee to Leaseholders versus tenants on the same estate for the provision of identical services, as it was not allowed under the lease agreements.

Despite these two rulings by the FTT Accent continued to charge the elevated charges for the next 15 years. This continued until 2019 when out of frustration I wrote an open letter to the entire Accent Board when I became aware of the financial irregularities, on the Yarm estate 8 miles away, who were also paying management fees in excess of 100% of service charge costs. The industry standard is a management fee of 15% of service charge costs. 15% is what Accent’s rental tenants on the same estates pay for the provision of identical services. 15% is the industry standard both for profit and ‘non for profits’. Accent is a majority outlier – despite being a ‘not for profit’ and benefiting from being a charitable status – which allows it to pay no tax on any income derived from social housing.

• In 2018, a sister estate to ours in Yarm (8 miles away) requested a Section 21 under the Landlord and Tenant Act due to the condition of the estate and the increasing service charges. A Section 21 is were the summary has be certified by an independent auditor. You can only request this if you are aware of the law and if you know that the internal documents being presented by Accent as accounts are not. This is unlikely for most of Accents homeowners and I only found out because someone explained it to me in layman terms. I find it incredible that a firm registered under the FCA (which Accent are) are allowed to do this.

• The result of Section 21 request by the Yarm estate, were that the service charges for their estate were significantly reduced for the proceeding two years (the only years examined), one year by 42% another by 25% despite there being only effectively 2 services performed on the estate, one of whom was caretaker a direct employee of Accent. The caretaker on both estates was billed out 60% more than his wages.

• However, despite Grant Thornton identifying material misstatements in July 2018, Accent still billed all other North East estates the elevated costs (including my own) – despite knowing them to be significantly inflated when they sent them.

• It is worth noting that the majority of Accent’s contracts and invoices are at a regional level, and there are no estate level invoices. Zero. Therefore, if the invoices for 1 estate are incorrect, they will be a high likelihood of them being incorrect for all estates under the contract.

• After discovering these facts relating to 2016/17 and 2017/2018, I requested the same information but I was told, I was timed out as there is a 6 month limit after the summary has been sent.

• During this time – I was being chased for service charge arrears, despite the fact a court had ruled a significant part of them invalid 15 years earlier.

• My concerns re inflated charges across the entire North East proved to be correct. In October 2019 I requested a Section 21 certificate for my estate for the 2018/19 year, this time within the time limit. It would appear that despite Accent knowing the service charge costs were incorrect 2 months before they issued their internal summary of costs in September 2018 – they did not correct them in 2018 (for the previous 2 years) or in the following year 2019 for any my estate or any other estate in the North East, apart from the Yarm estate who had identified the issues initially and could afford a solicitor. The Yarm estate did the heavy lifting as initially Accent denied there was any contractual obligation to provide anything. Yarm’s solicitor argued it was not a contractual obligation but a statutory one, so Accent relented. They also got contracts and invoices which have been withheld to everyone else, who cannot afford a solicitor.

• The reluctance to hand over the contracts for our estate is now obvious, as our estate does not form part of the OJEC contract which covers the region. However using the information the Yarm estate obtained, none of the estates match the contract despite the contract supposedly being a priced at a fixed price contract for the services provided. The contract itself merely contains a list of possible services you could get and none is customised to an estate level. Given this, it is therefore unclear, how our estate costs are being calculated, instead they just appear to arrive at a similar price using Accent old costs (which have now been proved to be fictious and severely inflated), despite the estate receiving less services under this contract and no longer having a caretaker who was a major cost in the previous year’s charges. It appears Accent are keeping the charges similar, yet stripping the estates of actual services and keeping the remaining underspends. This conduct was masked by the production of internal service charge statements. This was conduct was only discovered when Section 21 requests were made.

• I sent a letter to Grant Thornton on these issues in 2020. I have enclosed a copy of the letter and their reply. More concerning however is following the issues identified on the Yarm and Hemlington estates it appears Grant Thornton no longer does any certified summaries for any of Accent’s estates. This work is now undertaken by smaller auditing firms – who appear to have even less information given to them. It would appear either Grant Thornton have not been asked or have declined this work. I find this highly unusual and suspicious in the absence of any further information.

• As stated previously, in October 2019, I requested a Section 21 under the Landlord and Tenant Act following the production of the 2019 internal annual statement by Accent. I received a certified summary from Grant Thornton in November 2019. Through this mechanism I received significant refunds for my entire estate - not just for 2019 but also for the previous 3 years (despite these not being requested). I believe this is because Grant Thornton had done the initial work in July 2018 for the Yarm estate and assumed Accent had refunded the estates. Grant Thornton also applied the FTT decisions to the remaining 88 leaseholders from 15 years earlier.

• When the refunds began, no explanation was provided by Accent – they simply credited the homeowners service charge accounts. This was the same at Yarm. Residents were left to themselves to work it out. Given there was only one service charge account for their entire portfolio – any refunds would not be picked up by an auditor because they were simply re credits. However, because I was supposedly in arrears - I fought for not 3 year of refunds but 6 years (the maximum allowed by the FTT). I won and then everyone got refunded an 3 extra years from what they were intending to refund. Not one tenant got an explanation as to why they were receiving the refunds – many of the residents who are elderly don’t have access to their digital system (apparently only 25% of tenants use it). As a result – they would have continued paying, I am unsure to this day if everyone is aware of the refunds. The amount was approximately £2,000 per leaseholder, I received less because I supposedly had arrears – which they deducted from this amount. Accent simply ignored the fact they had been misbilling me and others for many years. It took me a further two months of intensive correspondence to get the cash out of the service charge account back into my own bank account.

• Unfortunately, despite 40% of the refunds being due to inflated service charge costs – which are also paid by their tenants – none of their tenants on the estate received a refund for any of the years. This also occurred in the Yarm estate where 70% of the estate are Accent’s rental tenants. It would appear Accent can bill estimates to everyone, which are lacking in any scrutiny or supporting documentation and keep the majority of the underspends, even where leaseholders clearly identify them. 85% of Accent’s tenants rent directly from them. I view this as financial abuse.

Table 1: Homeowners Refunds following Section 21 Request in November 2019 for 2016/17 and 2017/18. Tenants received none of the service charge cost refunds. 2016/17 2017/18 Service Charge Costs Accent issued Certificate of Expenditure following internal reconciliation at the end of the financial years 2016/17 and 2017/18. 351.19 335.00 Total service charge costs following Section 21 Request – November 2019 209.39 136.09 Overstated by 40% 59% Administrative & Management Total Administrative & Management Fees costs following internal reconciliation at the end of the years 2016/17 and 2017/18. 351.19 335.00 Total service charge costs following Section 21 Request – November 2019 79.36 70.66 Overstated by 77.4%* 78.9%* REFUND - January 2020 415.32 405.91 % of previously issued Certificate of Expenditure refunded. 60.2% 59.1%

• It is interesting to note that whilst Grant Thornton remains their corporate auditor, it no longer provides the Certified summaries at estate level when they are requested. This work is now undertaken by other auditors - often at short notice. There is one estate where Grant Thornton declined to provide a certify summary, so Accent sent it to Beever and Struthers and they certified it within 24 hours when Accent’s corporate auditor could not. This year was 2018/19.

• The Landlord and Tenant also allows for a Section 22 to be requested following the production of the Section 21. A Section 22 is the process where you can request the underlying invoices/documents used by the auditor. This is proving very difficult for Accent because they do not exist at estate level. I raised this issue with Grant Thornton as Accent ignored my request to see the invoices used in the 2018/19 year. To date, I have not receive any invoices which allow me to calculate my charges for any of the years. To date - I have only received regional and sometimes national invoices which are heavily redacted, with no methodology , making it impossible for me to check their validity.

• I repeated the same exercise in October 2020 again after requesting a Section 21 for the 2019/20 year. Again Section 22 information was not provided. Out of frustration, I contacted the auditor Beever and Struthers who certified the summary for the year. It would appear they never got estate level invoices for my estate either and they appear not to have even read the lease which is the minimum standard required – as they applied an additional garden charge solely to flats on the estate, when the estate only has a communal garden.

• When Beever and Struthers were asked if they could help in providing the supporting documents since they had just signed the certified summary and would have had them - they stated that they were sorry but they were bound by client confidentially rules but hoped that their client (Accent) would provide them. Needless to say Accent have not provided them, despite over 10 written requests. Accent are legally bound to provide these documents within 1 calendar month of request.

• Whilst it may look like there are protections under the Landlord and Tenant Act 1985 (S. 21 & 22) there are not. The 1987 recommendations for audited accounts for over 4 dwellings were watered down to a certified summary - which any auditor will tell you is worthless, as they do not examine year over year changes. In addition, there is no legal remedy to enforce Sections 21 & 22 of the Act, as the only entity who can bring a prosecution is the local authority. As a result Landlord’s such as Accent are not held to account and there is no legal enforcement to make them.

If you would like further information on these issues or supporting documentation. Please drop me a line.

Your sincerely

Amiya Goswami