The Industrial Dwellings Society (1885) Limited (L0266) - Regulatory Judgement: 30 October 2024
Updated 30 October 2024
Applies to England
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Our Judgement
| Grade /Judgement | Change | Date of assessment | |
|---|---|---|---|
| Consumer | C2 Our judgement is that there are some weaknesses in the landlord delivering the outcomes of the consumer standards and improvement is needed. |
First grading | October 2024 |
| Governance | G2 Our judgement is that the landlord meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance. |
Assessed and unchanged | October 2024 |
| Viability | V2 Our judgement is that the landlord 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. |
Assessed and unchanged | October 2024 |
Reason for publication
We are publishing a regulatory judgement for The Industrial Dwellings Society (1885) Limited (Industrial Dwellings Society) following responsive engagement and an inspection completed in October 2024.
This regulatory judgement confirms a consumer grade of C2, a governance grade of G2 and a financial viability grade of V2.
Prior to this regulatory judgement, the governance and financial viability grades for Industrial Dwellings Society were last updated in December 2023 following a stability check, to confirm grades of G2 and V2.
This is the first time we have issued a consumer grade in relation to this landlord. However, a regulatory notice was published in June 2022 as a result of Industrial Dwellings Society not meeting the intended outcomes of the Home Standard in place at the time. The regulatory notice concluded that Industrial Dwellings Society did not have a cost-effective repairs and maintenance service for homes and communal areas that responded to the needs of tenants and had the objective of completing repairs and improvements right first time, which had the potential for serious detriment to Industrial Dwellings Society tenants. The matters raised in this regulatory notice have been considered as part of our responsive engagement following the publication of the regulatory notice and the inspection.
Summary of the decision
From the evidence and assurance gained during our responsive engagement and the inspection, our judgement is that there are some weaknesses in Industrial Dwellings Society delivering the outcomes of the consumer standards and further improvement is needed, specifically in relation to outcomes in our Safety and Quality Standard and Transparency, Influence and Accountability Standard. Based on this assessment, we have concluded a C2 grade for Industrial Dwellings Society. The regulatory notice of June 2022 has been removed and any remaining matters are now reflected within the consumer grading of C2.
Our judgement is that Industrial Dwellings Society meets our governance requirements, but needs to improve some aspects of its governance arrangements to support continued compliance, specifically in relation to the effectiveness of its risk management and internal controls assurance framework and strategic oversight of the efficient use of its resources. Based on this assessment we have concluded a G2 grade for Industrial Dwellings Society.
Our judgement is that Industrial Dwellings Society meets our financial viability requirements, has access to sufficient liquidity and continues to forecast funder covenant compliance with reasonable headroom. Industrial Dwellings Society’s financial profile reflects the additional investment it is making in tenants’ homes and the need to manage material risks to ensure continued compliance. Based on this assessment, we have concluded a V2 grade for Industrial Dwellings Society.
How we reached our judgement
Following the publication of the regulatory notice in June 2022 we carried out responsive engagement with Industrial Dwellings Society that focussed on how Industrial Dwellings Society was addressing the issues that led to the regulatory notice.
In October 2024 we carried out an inspection of Industrial Dwellings Society to assess how well it is delivering the outcomes of the consumer standards and meeting our governance and financial viability requirements as part of our planned regulatory inspection programme. During the inspection we considered all four of the consumer standards: Neighbourhood and Community Standard, Safety and Quality Standard, Tenancy Standard, and the Transparency, Influence and Accountability Standard.
During the inspection we observed a board meeting and an operations committee meeting, spoke to tenants, held meetings with Industrial Dwellings Society and its non-executive directors, and reviewed a wide range of documents provided by Industrial Dwellings Society.
Our regulatory judgement is based on all the relevant information we obtained during the responsive engagement and inspection as well as analysis of information supplied by Industrial Dwellings Society in its regulatory returns and other regulatory engagement activity.
Summary of findings
Consumer – C2 – October 2024
A regulatory notice was published in June 2022 as a result of Industrial Dwellings Society not meeting the intended outcomes of the Home Standard in place at the time.
The regulatory notice concluded that Industrial Dwellings Society did not have a cost-effective repairs and maintenance service for homes and communal areas that responded to the needs of tenants and had the objective of completing repairs and improvements right first time, which had the potential for serious detriment to Industrial Dwellings Society tenants.
Concerns around property conditions at one scheme, Evelyn Court, included mould, damp, condensation, drainage, and flooding issues. Industrial Dwellings Society tenants at this, and other schemes, complained of a poor repairs and maintenance service and a lack of responsiveness from Industrial Dwellings Society. With no cohesive remediation plan, a repairs process that was difficult to navigate, and poor tenant engagement, Industrial Dwellings Society acknowledged at the time of the regulatory notice that these failings extended beyond Evelyn Court and to its wider properties.
During our inspection Industrial Dwellings Society provided evidence-based assurance that progress has been made in addressing the issues identified as part of the regulatory notice published in June 2022. However, our inspection confirmed that there is still further work to do that Industrial Dwellings Society has already identified and has plans in place to address.
Our inspection confirmed that Industrial Dwellings Society has improved its understanding of the current condition of its homes, through a range of processes including stock condition surveys, damp and mould surveys and annual visits to tenants’ homes. Further work is now needed to translate the information gained from its recent stock condition surveys into a clear asset management strategy and for delivery of that to result in clearly improved outcomes for tenants.
Industrial Dwellings Society has taken action to improve delivery of its repairs and maintenance services, although further work is necessary to ensure this is available to all tenants and can be evidenced through improved outcomes. Through closer working with its contractors and the introduction of a new piloted repairs service, we saw evidence of improvement. Plans are now in place to roll out this approach across its remaining estates.
The Safety and Quality Standard requires landlords to ensure that their tenants’ homes meet the requirements of the Decent Homes Standard. Industrial Dwellings Society is working to reduce the number of its homes that do not meet the requirements of the Decent Homes Standard and has identified that windows are a key driver for its homes not meeting this requirement. Industrial Dwellings Society has replaced windows, with more to be replaced, at a number of its estates.
The Safety and Quality Standard requires landlords to identify and meet all legal requirements that relate to the health and safety of tenants in their homes and communal areas, and to ensure that all required actions arising from legally required health and safety assessments are carried out within appropriate timescales. Industrial Dwellings Society reports close to full compliance for the majority of Landlord Health and Safety areas, with further work ongoing in relation to damp and mould and overdue fire remedial actions. Industrial Dwellings Society is focused on managing the risks to tenants, with outstanding action prioritised according to risk.
In relation to the Neighbourhood and Community Standard, we gained assurance that Industrial Dwellings Society works in partnership with relevant organisations to deter and tackle anti-social behaviour, including hate incidents, in neighbourhoods where it provides housing. Further work is continuing to strengthen this through formalising its partnerships with key local authorities.
In relation to the Tenancy Standard, our inspection found evidence that Industrial Dwellings Society’s approach to lettings and allocations is transparent, and that measures are in place to ensure terms of tenancy are appropriate and meet the needs of tenants. There is a range of initiatives in place to support tenancy sustainment including helping tenants to access support.
In relation to the Transparency, Influence and Accountability Standard, we gained assurance that Industrial Dwellings Society treats its tenants with fairness and respect, and that it has a range of processes in place to support this. Industrial Dwellings Society has restructured its estates and housing team, improving the availability of staff to act as points of contact for tenants. This is improving Industrial Dwellings Society’s understanding of individual household needs and allows services to be tailored as appropriate. Industrial Dwellings Society also builds upon the information it collects at tenancy sign ups through a rolling annual visit programme.
We saw evidence that tenants have a range of opportunities to influence and scrutinise Industrial Dwellings Society strategies, policies and services. However, Industrial Dwellings Society recognises that the scrutiny mechanisms need to be developed further and formalised. While there remains areas for improvement, during the inspection we found evidence of progress in establishing positive tenant engagement that both informs and influences Industrial Dwellings Society’s policies and service delivery.
Finally, we have assurance that Industrial Dwellings Society is making improvements to ensure complaints are addressed fairly, effectively and promptly, and that it is taking a tenant focussed approach to improving satisfaction levels. We saw evidence that Industrial Dwellings Society regularly reviews performance information, complaints and wider customer feedback and uses this to improve the experience and outcomes for tenants.
Governance – G2 – October 2024
Based on the evidence gained from the inspection, there is assurance that Industrial Dwellings Society’s governance arrangements are meeting the requirements of the Governance and Financial Viability Standard.
Industrial Dwellings Society was downgraded to G2 in August 2022. Linked to the issues raised in the regulatory notice published in June 2022, weaknesses were identified in Industrial Dwelling Society’s risk management and board skills, which included its oversight of the condition of its homes and failure to ensure an effective repairs service.
Through the inspection we were able to see evidence of improvement across these areas. While this has been over a relatively lengthy period, Industrial Dwellings Society has increased its capacity and continues to work towards improved outcomes for tenants.
Industrial Dwellings Society has undergone a number of changes to its governance structure, including the appointment of new board and executive members that has strengthened its skills, along with renewing its housing management, repairs and estate services models, to respond to resident feedback.
Our inspection confirmed that Industrial Dwellings Society now has a good oversight of its homes. Industrial Dwellings Society are starting to see some improvements in outcomes for tenants, however it is important that Industrial Dwellings Society’s governance continues to develop and functions effectively to drive through all remaining improvements.
We saw evidence that decision making is largely evidence based and considers level of risk, financial implications, value for money and delivery of outcomes for tenants, particularly in relation to their approach to repairs services. Industrial Dwellings Society’s Headline Social Housing Cost per unit is increasing and above that of its peers, reflecting its increased investment in its existing stock. Board will need to ensure a robust approach to decision making and rigorous appraisal of options for improving performance with clear targets set allowing stakeholders to hold them to account.
Our inspection confirmed that improvements have been made to Industrial Dwellings Society’s management of risk, but further work is necessary to ensure that the board is effectively managing all its risks, in particular those around financial viability and safety and quality of tenants’ homes. Industrial Dwellings Society needs to continue the process it has started to strengthen internal controls and the assurance framework, including the quality of external assurance around key areas such as landlord health and safety. Industrial Dwellings Society also needs to strengthen its stress testing by extending the severity of the scenarios tested and by showing the impact of stresses on cash and security.
While Industrial Dwellings Society current strategic focus is on improving the quality of its homes, Industrial Dwellings Society’s current published corporate strategy has expired and included a limited range of targets, which restricted the ability of stakeholders to assess strategic performance. The board’s role is crucial in ensuring a positive direction of travel continues to ensure a sustainable organisation that is able to deliver its objectives within its available resources. Industrial Dwelling Society’s longer term viability position continues to be weak. The implications of this will need to be explicit in the board’s rigorous consideration of strategic options for the future and we will engage on this through our landlord improvement work.
Viability – V2 – October 2024
Based on the evidence gained through the inspection, we have concluded that there is appropriate assurance that Industrial Dwellings Society’s financial plans are consistent with, and support, its financial strategy. Industrial Dwellings Society has an adequately funded business plan, with access to sufficient liquidity and security.
Industrial Dwellings Society’s financial performance has deteriorated as a result of high levels of investment in existing homes. Industrial Dwellings Society has taken the decision to remove all future development from its current business plan in order to focus on increasing its levels of investment in existing homes.
Although Industrial Dwellings Society has the capacity to respond to a reasonable range of adverse scenarios it needs to manage material risks in order to deliver its objectives while continuing to meet the requirements of the financial viability standard over the medium to long term.
Background to the judgement
About the landlord
Industrial Dwellings Society is a charitable registered provider of social housing. It is the RSH registered parent and majority stock holding entity within the group. It has one registered provider subsidiary, Otto Schiff Housing Association, a charitable company, which owns 11 units of social housing.
Industrial Dwellings Society is a specialist housing provider for Jewish communities and owns around 1,400 homes in nine local authority areas across London.
Industrial Dwellings Society employs the full-time equivalent of 39 staff and its turnover for the year ended 31 March 2024 was £14.96m.
Our role and regulatory approach
We regulate for a viable, efficient, and well governed social housing sector able to deliver quality homes and services for current and future tenants.
We regulate at the landlord level to drive improvement in how landlords operate. By landlord we mean a registered provider of social housing. These can either be local authorities, or private registered providers (other organisations registered with us such as non-profit housing associations, co-operatives, or profit-making organisations).
We set standards which state outcomes that landlords must deliver. The outcomes of our standards include both the required outcomes and specific expectations we set. Where we find there are significant failures in landlords which we consider to be material to the landlord’s delivery of those outcomes, we hold them to account. Ultimately this provides protection for tenants’ homes and services and achieves better outcomes for current and future tenants. It also contributes to a sustainable sector which can attract strong investment.
We have a different role for regulating local authorities than for other landlords. This is because we have a narrower role for local authorities and the Governance and Financial Viability Standard, and Value for Money Standard do not apply. Further detail on which standards apply to different landlords can be found on our standards page.
We assess the performance of landlords through inspections and by reviewing data that landlords are required to submit to us. In Depth Assessments (IDAs) were one of our previous assessment processes, which are now replaced by our new inspections programme from 1 April 2024. We also respond where there is an issue or a potential issue that may be material to a landlord’s delivery of the outcomes of our standards. We publish regulatory judgements that describe our view of landlords’ performance with our standards. We also publish grades for landlords with more than 1,000 social housing homes.
The Housing Ombudsman deals with individual complaints. When individual complaints are referred to us, we investigate if we consider that the issue may be material to a landlord’s delivery of the outcomes of our standards.
For more information about our approach to regulation, please see Regulating the standards.