Decision

Current regulatory judgement: GreenSquareAccord Limited (29 November 2023)

Updated 29 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: GreenSquareAccord Limited
• Regulatory code: LH3902
• Publication date: 29 November 2023
• Governance grade: G1
• Viability grade: V2
• Reason for publication: Governance upgrade and changed basis for viability grade
• Regulatory route: In Depth Assessment

Regulatory judgement

This regulatory judgement upgrades our assessment of GreenSquareAccord Limited’s governance from G2 to G1 and confirms its existing V2 grade for financial viability.

Our previous narrative regulatory judgement for GreenSquareAccord Limited (GSA) was published in October 2021 following the merger that formed the group, and a self-referral related to health and safety performance. The judgement noted that neither of the pre-merger providers had responded appropriately to health and safety concerns raised by due diligence, and that GSA needed to strengthen its governance arrangements in relation to this area. The regulator also published a Regulatory Notice in October 2021 regarding failure to meet statutory health and safety requirements in relation to fire, electrical and asbestos safety in legacy Accord stock.

GSA has strengthened its governance and compliance frameworks and actioned all material due diligence findings. A refreshed board and executive team have set a revised strategy that simplifies the organisation’s activities and structure, prioritising investment in existing stock. GSA has accelerated its programmes of fire risk assessments, asbestos and electrical safety testing, and stock condition surveys, and now has robust, reliable and up-to-date data on which it has based its compliance and reinvestment programmes.

There is robust monitoring of progress in delivering the significant volume of work identified from updated assessments and surveys. The Regulatory Notice will be retained while GSA continues to deliver the work programmes and ensures that its positive progress is sustained, and outstanding repair numbers are reduced.

Based on evidence gained from an In Depth Assessment, the regulator has assurance that GSA’s financial plans are consistent with, and support, its financial strategy. It has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance.

GSA is undertaking a development and sales programme and forecast earnings from its core social housing lettings business are not sufficient on their own to cover interest payments over the long term. In addition, increased expenditure on major repairs negatively impacts forecast performance. These factors, set in the context of economic pressures including inflation and interest rates, impact on GSA’s capacity to respond to adverse events.

Other providers included in the judgement

None

About the provider

Origins

GSA formed in April 2021 following a merger of GreenSquare Group Limited and Accord Housing Association Limited.

GSA is a registered society providing social housing. Its refreshed business strategy is ‘simpler, stronger and better’ which seeks to improve its current homes and establish itself as a great social landlord. Its strategy is also to divest from non-core activities.

Registered Entities

GSA is the only registered entity in the group and the stock holding parent.

Unregistered Entities

There are seven unregistered entities, four of which are dormant.

The active entities are LowCarbonLiving Homes Limited, GreenSquare Homes Limited and GreenSquare Estates Limited. GreenSquare Homes has a joint venture, Sharpness Development LLP.

Geographic Spread and Scale

GSA owns and manages around 26,600 homes across the West Midlands to the South West of England, with concentrations of stock in the Midlands, Gloucestershire, Oxfordshire and Wiltshire.

Staffing and Turnover

The group employs 2,319 full-time equivalent staff. Group turnover for the year ended 31 March 2023 was £214m.

Development

GSA has a new corporate strategy which includes a significant reduction in its development programme, with a focus on completing committed development of around 1,300 homes between 2024 to 2026, and then around 300 homes each year for 2027 and 2028.

About our judgements

Key to Grades

Governance:

	Compliant
G1	The provider meets our governance requirements.
G2	The provider meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance.

	Non-compliant
G3	The provider does not meet our governance requirements. There are issues of serious regulatory concern and in agreement with us the provider is working to improve its position.
G4	The provider does not meet our governance requirements. There are issues of serious regulatory concern, and the provider is subject to regulatory intervention or enforcement action.

Viability:

	Compliant
V1	The provider meets our viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.
V2	The provider meets our viability requirements. It has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance.

	Non-compliant
V3	The provider does not meet our viability requirements. There are issues of serious regulatory concern and, in agreement with us, the provider is working to improve its position.
V4	The provider does not meet our viability requirements. There are issues of serious regulatory concern, and the provider is subject to regulatory intervention or enforcement action.

Note: The use of an asterisk (*) against a grade indicates that the assessment refers to a provider that is designated as being for-profit.

Definitions of Regulatory Routes

In Depth Assessment (IDA): An IDA is a bespoke assessment of a provider’s viability and governance, including its approach to value for money. It involves on-site work and considers in detail a provider’s ability to meet its financial obligations and the effectiveness of its governance structures and processes.

Stability Checks: Based primarily on information supplied through regulatory returns, a Stability Check is an annual review of a provider’s financial position and its latest business plan. The review is focused on determining if there is evidence to indicate a provider’s current judgements merit reconsideration.

Reactive Engagement: Reactive engagement is unplanned work which is triggered by new information or a developing situation which may have implications for a provider’s current regulatory judgement.

Stability Checks and Reactive Engagement: In some cases, we will publish narrative regulatory judgements which combine evidence gained from both Stability Checks and Reactive Engagement.

For further details about these processes, please see Regulating the Standards.