Decision

Current regulatory judgement: Honeycomb Group Limited (31 January 2024)

Updated 31 January 2024

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Honeycomb Group Limited
• Regulatory code: LH2162
• Publication date: 31 January 2024
• Governance grade: G2
• Viability grade: V2
• Reason for publication: Changed basis for viability grade
• Regulatory route: Stability Check and Reactive Engagement

Regulatory judgement

This regulatory judgement confirms the regulator’s existing published assessment of Honeycomb Group Limited’s governance and financial viability grades (G2/V2).

On the basis of the Stability Check and Reactive Engagement, the regulator has assurance that Honeycomb Group Limited (Honeycomb) 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. Honeycomb has an adequately funded business plan, sufficient security and is forecast to continue to meet its financial covenants.

Honeycomb is increasing investment in its existing homes, including additional health and safety compliance related work, and continues to improve its stock condition data. Delivering this investment, set in the context of current economic pressures including inflation and interest rates, impacts on Honeycomb’s capacity to respond to adverse events. Honeycomb has taken measures to increase future financial capacity.

The regulator’s assessment of Honeycomb’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 Honeycomb’s current governance grading. Following changes in leadership, Honeycomb continues its work to strengthen aspects of risk management and internal control.

Other providers included in the judgement

None

About the provider

Origins

Honeycomb is a charitable community benefit society. It provides mostly general needs homes, with a small number of supported and shared ownership properties.

Registered Entities

Honeycomb is the only registered entity in the group.

Unregistered Entities

There are two active unregistered entities. Stillness (924) Limited provides photovoltaic solar panels to Honeycomb’s homes and receives an annual income on the panels from the Government’s Green Energy feed in tariffs. Honeycomb Charitable Services Limited works to end relationship abuse and tackle homelessness in Staffordshire and surrounding areas.

Geographic Spread and Scale

Honeycomb owns and manages around 3,300 homes, with the majority located in Staffordshire.

Staffing and Turnover

Honeycomb employs the full-time equivalent of 261 staff. Its turnover for the year ended 31 March 2023 was £26.8m.

Development

Honeycomb intends to deliver around 280 units between 2023 and 2029. Its programme comprises of homes for 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.