Previous regulatory judgement: Black Country Housing Group Limited (29 March 2023)
Updated 13 December 2023
Applies to England
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RSH Narrative Regulatory Judgement
- Provider: Black Country Housing Group Limited
- Regulatory code: L1668
- Publication date: 29 March 2023
- Governance grade: G1
- Viability grade: V2
- Reason for publication: Viability regrade
- Regulatory route: In Depth Assessment
Regulatory judgement
This regulatory judgement regrades Black Country Housing Group Limited’s financial viability from V1 to V2 and confirms its existing G1 grade for governance.
Based on evidence gained from an In Depth Assessment (IDA), the regulator has assurance that Black Country Housing Group Limited (BCHG) continues to comply with the financial viability elements of the Governance and Financial Viability Standard. BCHG’s financial plans are consistent with, and support, its financial strategy. The provider has an adequately funded business plan, with sufficient asset security and liquidity, and is forecast to continue to meet its financial covenants.
BCHG is increasing investment in its existing homes and developing new homes, and as a result is forecasting reduced headroom against lender covenant requirements. Delivering this investment, coupled with the current economic uncertainty in relation to inflation and interest rates, reduces BCHG’s capacity to respond to adverse events.
The regulator’s assessment of BCHG’s compliance with the governance elements of the Governance and Financial Viability Standard remains unchanged. Based on evidence gained from the IDA, the regulator has assurance that BCHG’s governance arrangements enable it to adequately control the organisation and to continue meeting its objectives.
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 Ltd and Black Country Care Services Ltd.
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 2022, BCHG employed 256 full-time equivalent staff. BCHG’s turnover for the year ended 31 March 2022 was £18.7m.
Development
BCHG has a 10-year development plan to 2032 to develop around 430 units, with the majority being affordable rent homes.
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.