Decision

Previous regulatory judgement: Clarion Housing Group Limited (31 May 2023)

Updated 28 February 2024

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Clarion Housing Group Limited

• Regulatory code: LH4087

• Publication date: 31 May 2023

• Governance grade: G1

• Viability grade: V2

• Reason for publication: Changed basis for viability grade

• Regulatory route: In Depth Assessment

Regulatory judgement

This regulatory judgement confirms Clarion Housing Group Limited’s existing governance and financial viability grades (G1/V2) following completion of an In Depth Assessment (IDA).

Based on evidence gained from the IDA, the regulator has assurance that Clarion Housing Group Limited (Clarion) complies 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. Clarion has an adequately funded business plan, sufficient security and is forecast to continue to meet its financial covenants.

Clarion continues to invest in existing homes while delivering a significant development programme. Delivering this investment, coupled with the current economic uncertainty in relation to inflation and interest rates, reduces Clarion’s capacity to respond to adverse events.

The regulator’s assessment of Clarion’s compliance with the governance elements of the Governance and Financial Viability Standard is unchanged. The IDA considered Clarion’s management of key risks including those relating to services to tenants and maintenance of homes. Based on its scrutiny of the evidence gained from the IDA, the regulator has assurance that Clarion’s governance arrangements enable it to adequately control the organisation and to continue meeting its objectives.

Other providers included in the judgement

Clarion Housing Association Limited

About the provider

Origins

Clarion is a charitable community benefit society, created by a merger between Affinity Sutton Group Limited and Circle Anglia Limited in December 2016.

Clarion is the strategic parent of the group under which are three key business streams: the landlord, Clarion Housing Association Limited; the development company, Latimer Developments; and the charitable foundation, Clarion Futures.

Registered Entities

There are two registered entities in the group: Clarion and Clarion Housing Association Limited.

Unregistered Entities

Within the group there are 76 unregistered legal entities, including two registered charities, six treasury vehicles and 36 property maintenance and management service companies. Clarion also has membership of 27 jointly controlled entities, owning at least 50% of each.

Geographic Spread and Scale

Clarion owns and manages around 135,000 homes, working in over 170 local authority areas.

Staffing and Turnover

Clarion employs the full-time equivalent of 3,902 staff. Its turnover for the year ended 31 March 2023 is projected to be £1,008m.^{[footnote 1]}

Development

Clarion plans to develop around 10,500 homes between 2023-24 and 2026-27. Its programme includes homes for social and affordable rent, shared ownership and outright market sale.

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.

1. Based on unaudited accounts for 2022/23. ↩