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Cloch ready to stand on own feet

Cloch ready to stand on own feet

 

In 2012 Oak Tree H.A. were invited by the Scottish Housing Regulator to take on Cloch H.A. as a subsidiary, to resolve a number of Financial and Governance Issues Cloch were facing at that time.

Oak Tree’s aims in agreeing to take this step were to keep decision-making for Cloch local and to stabilise areas of the Cloch business to safeguard services to their tenants. Like many Associations Oak Tree saw neighbouring associations as partners and were keen to do everything possible to safeguard the long-term future of a sister organisation.

Our support included; a short term Loan of £2M (at a market interest rate), the co-option of experienced Board members onto the Cloch Board, support in appointing a new lead officer, and the provision of Oak Tree’s experienced Finance team, to undertake Cloch’s financial accounting and support their financial decision-making.

The process leading to Cloch members voting to become a subsidiary was supported with senior staff from Oak Tree attending a number of Cloch tenant meetings, to ensure as much transparency as possible.

Over the last seven years, with the Cloch position initially stabilised and then strengthened and recently both Boards deciding to review our relationship, several options were considered, from merging the two organisations into one, to separating and becoming stand alone and several options in between.

Utilising an independent specialist consultant the two Boards examined these options in detail, considering the benefits and risks and over a number of meetings concluded that both organisations would be best served by separating.

This will allow each organisation to fully focus on the needs of their own tenants to face the future with their destiny in their own hands.

From Oak Tree’s position, there will be no difference going forward in terms of decision –making or services to our tenants. The separation removes any risk to Oak Tree by taking away our legal responsibilities to step in and support Cloch in the event of future problems.

In discussions between Oak Tree, Cloch and the Scottish Housing Regulator, Cloch have decided to ballot their tenants on this decision.

The Oak Tree Board and staff team wish Cloch a bright future and consider our work with them, a job well done by all involved with Oak Tree.