Current regulatory judgement: Gloucester City Homes Limited (27 March 2024)
Updated 27 March 2024
Applies to England
© Crown copyright 2024
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RSH Narrative Regulatory Judgement
- Provider: Gloucester City Homes Limited
- Regulatory code: 4584
- Publication date: 27 March 2024
- Governance grade: G1
- Viability grade: V2
- Reason for publication: Changed basis for viability grade
- Regulatory route: In Depth Assessment
Regulatory judgement
This judgement confirms the regulator’s existing assessment of Gloucester City Homes Limited’s governance and viability (G1/V2), following completion of an In Depth Assessment (IDA).
Based on evidence gained from the IDA, the regulator has assurance that Gloucester City Homes Limited (GCH) continues to meet the financial viability elements of the Governance and Financial Viability Standard and that its financial plans are consistent with, and support, its financial strategy. GCH has an adequately funded business plan, sufficient security in place, and is forecast to continue to meet its financial covenants but has significant risks to manage.
GCH has an inherently weak financial position and interest cover, alongside a tight covenant position. Loan covenants continue to be set annually and require agreement by the lender, with little or no tolerance permitted. These limit GCH’s capacity to respond to adverse events.
The regulator’s assessment of GCH’s compliance with the governance elements of the Governance and Financial Viability Standard remains unchanged. Based on the evidence gained from the IDA, the regulator has assurance that GCH’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
GCH is a community benefit society. It took ownership of 4,488 rented homes through a large scale voluntary transfer of stock from Gloucester City Council in 2015.
Registered Entities
GCH is the only registered entity.
Unregistered Entities
GCH has one unregistered subsidiary, Nerva Homes Limited, which delivers design and build activity for GCH.
Geographic Spread and Scale
GCH operates primarily within Gloucester and manages around 5,000 homes.
Staffing and Turnover
GCH reported a turnover of £26.6m for the year ended 31 March 2023 and employs the full-time equivalent of 151 staff.
Development
GCH’s business plan includes development of around 400 homes for social rent, affordable rent, supported social rent and low-cost home ownership between April 2024 and March 2031.
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.