Cost of cyber attack hits London housing association’s numbers

The cost of having to fix a cyber attack and the impact of late rent collections as a result meant London housing association Clarion saw a drop in surplus in the first of the year.

The 109,000-home housing association saw turnover slip 6% to £481m for the six months to 30 September, while its operating surplus, excluding one-off items, fell 10% to £149m.

Clarion blamed the attack for the fall and said not all its services were back to normal, more than four months after the original hit.

In a trading update, Clarion said: “The lower operating surplus reflects the higher levels of cost inflation, increased expenditure on repairs and maintenance and additional provisions against rent arrears linked to the recent cyber attack.”

Clarion said it took its IT network offline after a “serious cyber incident” in the middle of June which affected systems, including rent payment services.

It added: “Following the cyber security incident which disrupted our services, we have been working urgently to restore our systems and services. Doing this in a safe and secure way takes time but we are pleased to report many of our services have now returned to normal.”

Earlier this week, it emerged Interserve had been hit with a £4.4m fine after weak security measures allowed hackers to steal the personal data of up to 113,000 current and former employees in May 2020.

And offsite specialist Caledonian Modular was hit by a cyber attack two weeks before it sank into administration with an administrator’s report saying it “infected its servers and encrypted its data. This reduced the company’s operating capability and would have required significant cost to remedy.”

In its update, Clarion also said that due to “challenging market conditions”, including materials shortages and increased costs, it has taken a more cautious approach to development.

It invested £247m in new homes in the first half of the year, a 16% drop on the £296m reported last year. It completed 785 homes, compared to 892 in the same period in 2021/22.