Current regulatory judgement: Black Country Housing Group Limited (13 December 2023)
Updated 13 December 2023
Applies to England
© Crown copyright 2023
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RSH Narrative Regulatory Judgement
- Provider: Black Country Housing Group Limited
- Regulatory code: L1668
- Publication date: 13 December 2023
- Governance grade: G1
- Viability grade: V1
- Reason for publication: Viability regrade
- Regulatory route: Stability Check and Reactive Engagement
Regulatory judgement
This regulatory judgement regrades our previous published assessment of Black Country Housing Group Limited’s financial viability from V2 to V1 and confirms its existing G1 grade for governance.
Our previous judgement noted that development plans and additional costs relating to investment in existing homes would reduce headroom against lender covenant requirements. Delivery of this investment, alongside economic uncertainty in relation to wider inflation and interest rate risks, reduced the capacity of Black Country Housing Group Limited (BCHG) to deal with adverse events.
BCHG’s board has taken the decision to reprofile its development programme which has reduced future debt requirement. Together with changes to bring assumptions in line with agreed rent increases this means that there is additional capacity in BCHG’s financial plan and increased headroom against lender covenant requirements.
The regulator’s assessment of BCHG’s compliance with the governance elements of the Governance and Financial Viability standard remains unchanged. On the basis of the Stability Check, the regulator has concluded that there is no evidence to indicate a change to BCHG’s current governance grading.
Other providers included in the judgement
None
About the provider
Origins
BCHG is a charitable community benefit society.
Registered Entities
BCHG is the only registered entity.
Unregistered Entities
There are two dormant subsidiaries, BCS Associates Limited and Black Country Care Services Limited.
Geographic Spread and Scale
BCHG owns and manages around 2,200 homes, with around 90% located in Sandwell and Dudley.
Staffing and Turnover
At 31 March 2023, BCHG employed 213 full-time equivalent staff and its turnover was £17.5m.
Development
BCHG has a ten year plan to 2033 to develop around 415 homes, with the majority being affordable rent.
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.