Decision

Previous regulatory judgement: Aspire Housing Limited (11 January 2023)

Updated 25 October 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Aspire Housing Limited
• Regulatory code: L4238
• Publication date: 11 January 2023
• Governance grade: G2
• Viability grade: V2
• Reason for publication: Governance downgrade and viability regrade
• Regulatory route: Stability Check and Reactive Engagement

Regulatory judgement

This regulatory judgement downgrades our assessment of Aspire Housing Limited’s governance grading from G1 to G2 and regrades its financial viability grading from V1 to V2.

Aspire Housing Limited (Aspire) continues to meet the requirements on governance set out in the Governance and Financial Viability Standard. However, weaknesses in financial planning and risk control meant that the board was not fully sighted on the financial exposures associated with a loss-making subsidiary. This has now been closed at a cost to Aspire. Aspire has also committed to additional expenditure on net zero carbon works that were outside its business plan in order to access grant funding. The additional costs arising from these decisions meant that Aspire needed to secure the agreement of its funders to maintain covenant compliance.

The regulator has assurance that Aspire continues to comply with the financial viability elements of the Governance and Financial Viability Standard. It has an adequately funded business plan and sufficient security in place, however Aspire’s interest cover position is reduced as it is investing in its stock, and funding the closedown of a subsidiary. Delivery of these two factors, in conjunction with economic uncertainty in relation to inflation and interest rates, means that Aspire’s capacity to respond to adverse events is reduced.

Other providers included in the judgement

None

About the provider

Origins

Aspire is a charitable community benefit society and asset-owning group parent. Its activities relate to the provision of social housing, including low cost home ownership.

Registered Entities

Aspire is the only registered entity.

Unregistered Entities

There are three unregistered entities in the group:

• Durata Development Limited, a development company

• Incana Sales Limited, is currently dormant

• Achieve Training, a training subsidiary that is being wound down

Geographic Spread and Scale

Aspire operates across the north west of England in eight local authorities. It owns and manages around 9,000 homes.

Staffing and Turnover

For the year ended 31 March 2022, Aspire reported a turnover of £54m and employed 479 full-time equivalent staff.

Development

Aspire aims to deliver around 970 new homes between 2022 and 2027. The new homes will be a mixture of social and affordable rent, shared ownership and market sale units.

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.

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.