MANAGERS at West Oxfordshire’s largest housing association were criticised in a report that raises questions over the company’s future.

The Homes and Communities Agency (HCA) said it had discovered financial problems at Cottsway Housing Association in October.

Cottsway was unable to obtain money from loans to build nearly 300 new houses after failing to secure the debts against the buildings.

The HCA has downgraded the company’s governance and viability ratings and Cottsway has had to hand over £6.3m of grants for new building projects to another housing association.

A spokesman for the HCA said: “Cottsway has successfully addressed short-term solvency issues.

“However, there remains an element of uncertainty around longer term viability until issues relating to internal controls and financial management are resolved.”

Tenant Valerie Ward, 68, of Fieldmere Close in Witney, said: “They need to reassure us about what is happening down there. I’m concerned about keeping a roof over my head.”

The housing association formed in 2001 to manage 3,600 homes from West Oxfordshire District Council. It now owns and runs about 4,000 houses and had a turnover of £19.8m in 2012.

The association has commissioned an independent governance review, reviewed its securities and brought in a 12-month overdraft facility as a contingency.

Cottsway interim chief executive Owen Ingram said: “There is no detriment to residents, no change in their rents, no risk on their tenancy. Present services will continue.

“We could continue forever and a day just being a management association. What the question mark is around is whether we can develop more homes.”

He said the management of residents’ homes was financially covered by rents, the completed new homes had “sufficient” loan facilities and the company had “sufficient” cash in the bank to top up these loans if necessary.

Cottsway staff were told by managers that there are no plans to make redundancies during a meeting at Langdale Hall in Witney on Wednesday.

District councillor Colin Dingwall, who sits on Cottsway’s board on behalf of the council, said: “It is our tenants who are our highest priority and they should rest assured there will be no ramifications for present or future tenants while these internal issues are being resolved.”

The association’s former finance director, David Barnett, resigned in October and chief executive David Waters took early retirement at the beginning of April.

WHAT HAPPENS IF IT FOLDS?

THE Homes and Communities Agency (HCA) said no housing association had ever been declared insolvent.

But it said regulator powers would be triggered if one ever did, giving the HCA 28 days to protect any social housing affected.

During this period creditors cannot collect money owed.

The HCA said, mostly likely, social housing assets – people’s homes – would then be transferred to another housing association. Tenancy agreements would give residents security over the tenure of their home and, if another housing association was brought in, the level of rents charged would also be protected.