Decision

Current regulatory judgement: Citizen Housing Group Limited (25 October 2023)

Updated 25 October 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Citizen Housing Group Limited
• Regulatory code: 5075
• Publication date: 25 October 2023
• Governance grade: G1
• Viability grade: V2
• Reason for publication: Viability regrade
• Regulatory route: Stability Check and Reactive Engagement

Regulatory judgement

This regulatory judgement regrades our previous published assessment of Citizen Housing Group Limited’s financial viability from V1 to V2 and confirms its G1 grade for governance.

The regulator has assurance that Citizen Housing Group Limited (Citizen) continues to comply with the financial viability elements of the Governance and Financial Viability Standard and that its financial plans are consistent with, and support, its financial strategy. Citizen has an adequately funded business plan, sufficient security and is forecast to continue to meet its financial covenants.

Citizen has significantly accelerated the delivery of its energy efficiency programme, leading to increased investment in its existing homes. Delivering this alongside its ongoing development programme means that the business plan is funded by an increased level of indebtedness. When set in the context of economic pressures including inflation and interest rates, this impacts on Citizen’s capacity to respond to adverse events.

The regulator’s assessment of Citizen’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 Citizen’s current governance grading.

Other providers included in the judgement

None

About the provider

Origins

Citizen is a charitable community benefit society that is focused on the provision of new homes and the delivery of core landlord services. Citizen was created in 2019 when WM Housing Group and its registered subsidiaries were amalgamated.

Registered Entities

Citizen is the only registered entity.

Unregistered Entities

The group contains the following unregistered subsidiaries:

• Citizen New Homes Limited is a development company limited by shares that builds and develops homes for market sale;
• Citizen Treasury plc (capital market debt) and Citizen Treasury Vehicle Ltd (bank/building society debt) are the provider’s treasury vehicles;
• Attwood Green Estates Services Limited was established for the provision of services to the Attwood Green Estate; and
• Citizen Business Services (dormant).

Geographic Spread and Scale

At 31 March 2023, the group owned and managed around 29,300 units of social housing across the West Midlands.

Staffing and Turnover

Citizen reported a turnover of £185m for the year ended 31 March 2023 and employs the full-time equivalent of 1,010 staff.

Development

Citizen plans to develop around 2,850 units of affordable housing between 2023 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.