Decision

Joseph Rowntree Housing Trust (5079) - Regulatory Judgement: 30 October 2024

Updated 30 October 2024

Applies to England

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	G1 Our judgement is that the landlord meets our governance requirements	Assessed and Unchanged	October 2024
Rent	Our judgement is that the landlord has not yet addressed the issues in the Regulatory Notice dated October 2023 relating to rent setting	Based on previous assessment	October 2023
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 Joseph Rowntree Housing Trust Limited (JRHT) following an inspection completed in October 2024.

This regulatory judgement confirms a consumer grading of C2, a governance grading of G1 and a financial viability grading of V2.

Prior to this regulatory judgement, the governance and financial viability grades for JRHT were last updated in November 2023 following a stability check, to confirm grades of G1 and V2. This is the first time we have issued a consumer grade in relation to this landlord.

In October 2023, following responsive engagement, we concluded that JRHT did not meet the requirements of the rent standard and published a regulatory notice. This regulatory judgement confirms that the regulatory notice published on 25 October 2023 remains in place until those issues are resolved and provides an update on JRHT’s response to the findings in the regulatory notice. 

Summary of the decision

From the evidence and assurance gained during the inspection it is our judgement that there are some weaknesses in how JRHT is delivering the outcomes of the consumer standards and improvement is needed, specifically in relation to outcomes in the Transparency, Influence and Accountability Standard. Based on this assessment, we have concluded a C2 grade for JRHT.

Our judgement is that JRHT meets our governance requirements. JRHT has provided evidence to demonstrate the effectiveness of its governance arrangements and that it continues to effectively manage the risks of its activities, allowing it to deliver its strategic and charitable objectives. Based on this assessment, we have concluded a G1 grade for JRHT.

Our judgement is that JRHT meets our financial viability requirements and has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance. JRHT is reliant on ongoing financial support from its parent to maintain covenant compliance. Based on this assessment, we have concluded a V2 grade for JRHT.

How we reached our judgement

We carried out an inspection of JRHT to assess how well JRHT 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, spoke to tenants, held meetings with JRHT including with its non-executive directors and reviewed a wide range of documents provided by JRHT.

Our regulatory judgement is based on all the relevant information we obtained during the inspection as well as analysis of information supplied by JRHT through its regulatory returns and other regulatory engagement activity.  

Summary of findings 

Consumer – C2 – October 2024

During the inspection, JRHT provided evidence-based assurance that it has appropriate systems in place to ensure the health and safety of its tenants in their homes and associated communal areas. There is evidence that JRHT keeps an accurate record of the condition of its homes at an individual property level through physical surveys of all homes and has a process for keeping this information up to date. JRHT has increased its capacity to deliver its programme of stock condition surveys and has demonstrated that it uses its understanding of the quality and safety of its tenants’ homes to make decisions on future investment to maintain and improve homes.   

JRHT has demonstrated that it provides an effective, efficient and timely repairs service to tenants and takes action to improve the service and outcomes for tenants when issues occur. There is evidence that the views of tenants have influenced improvements made to the accessibility of JRHT’s repairs service and that there are opportunities for tenants to carry out scrutiny of the repairs process.

JRHT demonstrated that it is working in partnership with appropriate partners to deter and tackle anti-social behaviour and hate incidents in the neighbourhoods where it provides homes. However, JRHT recognises that continued improvements are required in the reporting mechanisms of anti-social behaviour cases for it to better understand tenants’ views of how it is managing anti-social behaviour in its neighbourhoods. We saw evidence that JRHT is addressing this matter.

In relation to the Tenancy Standard, JRHT provided evidence that it seeks to offer tenures that are appropriate for the homes it lets, considering the purpose of the accommodation, the needs of individual households, the sustainability of the community and the efficient use of social housing. There are a range of measures in place to support tenancy sustainment including successfully helping tenants to access financial support. JRHT provided evidence that it is making improvements to its policy framework to continue meeting the outcomes of the Tenancy Standard. 

There are some weaknesses in JRHT’s approach in delivering the outcomes of the Transparency, Influence and Accountability Standard which require improvement. We gained assurance that JRHT treats its tenants with fairness and respect. However, JRHT is working to improve the information it holds about the diverse needs of its tenants to better adapt and tailor its services to their individual needs to ensure its housing and landlord services deliver equitable outcomes for tenants.  

At a local level we saw evidence of meaningful opportunities for tenants to influence and scrutinise JRHT’s strategies, policies and services, and JRHT has commissioned external support to improve tenant involvement and scrutiny functions at a strategic level. This work is ongoing, and we will continue to engage with JRHT as it strengthens its approach to tenant engagement.

JRHT provides a range of relevant and accessible information to tenants, including about its performance. JRHT’s approach to complaints handling is clear and in line with the requirements of the Transparency, Influence and Accountability Standard, but a further area for improvement for JRHT is how it learns from complaints and uses this information to improve services.

Governance – G1 – October 2024

Based on evidence gained through inspection there is assurance that JRHT’s governance arrangements enable it to effectively manage its risk and adequately control the organisation, allowing it to deliver its objectives. JRHT’s board demonstrated that it provides challenge on performance against the organisation’s strategic targets and consideration of risk appetite in strategic decision making.  

During the inspection, we saw evidence that JRHT’s board proactively reviews its approach to delivering against its purpose and is prioritising investment in existing homes and services to tenants. JRHT has demonstrated that it continues to actively manage its capacity while it also delivers a development programme of new homes.

JRHT was able to provide evidence that it has established and maintains clear roles, responsibilities and accountabilities within its leadership and governance structure. The relationship between its board and committees is working in line with its delegations to strengthen assurance in key areas of risk and compliance. JRHT is the subsidiary of an unregistered parent, Joseph Rowntree Foundation (JRF), and JRHT was able to provide evidence that robust arrangements are in place to ensure it can meet legal and regulatory requirements.

Continuing governance improvement is evidenced through annual effectiveness reviews and in-depth periodic external governance reviews. The most recent external review took place in February 2024, and we saw evidence of the recommendations being implemented as a result. 

Board member skills, experience and knowledge are aligned with the activities of the organisation and there is a structured approach to developing and appraising skills to support succession planning. JRHT has increased leadership capacity to ensure the appropriate independence and to focus on delivery of its strategic objectives with a performance and reporting framework that supports this. We saw evidence of this in practice through our inspection work.

JRHT has demonstrated that there is an appropriate risk management and control framework that aligns to its strategic risks. There is evidence that this flows from JRHT’s board through the organisation with risks being managed effectively in practice. JRHT’s board actively seeks and gains an appropriate level of assurance across a range of areas.  

Board ownership of stress testing and mitigation strategies is evidenced and is used to inform decisions, supplementing the wider control framework. Reporting to board provides sufficient detail for the board to ensure effective oversight. 

Rent – Not meeting requirements – October 2023

As outlined in the October 2023 regulatory notice, we concluded that JRHT had found it had wrongly classified some of its homes as specialised supported housing and the tenants of these homes had been overcharged. As part of its detailed follow-on investigations JRHT discovered it had previously set rents incorrectly for up to 400 ‘fair rent’ tenancies. JRHT had not complied with the Rent Standard 2020.

Through the inspection, evidence has been provided to demonstrate that JRHT is taking steps to address the matters in the regulatory notice and has sought appropriate external advice and is implementing a number of improvements. JRHT has corrected errors and refunded any overcharges of rent to affected tenants.  JRHT has commissioned an independent external review of its arrangements for rent setting including its policy and whether controls in place were adequate and operating effectively. JRHT is in the process of implementing the recommendations from the reviews including new rent setting arrangements and aims to conclude this by late 2024. We will continue to engage with JRHT as it continues to address these issues and we will seek evidence that sufficient change and improvement is being made.

Viability – V2 – October 2024

Based on evidence gained through the inspection, we have concluded there is appropriate assurance that JRHT’s financial plans are consistent with, and support, its financial strategy. JRHT has appropriately evidenced that it has an adequately funded business plan, sufficient security in place to support its financial plans, and JRHT is forecast to continue to meet its financial covenants under a reasonable range of adverse scenarios. 

JRHT is increasing investment in existing homes while continuing to develop new homes which requires additional debt. JRHT also has high-cost business streams which means it is reliant on continued parental support to maintain its financial viability. While JRHT has taken steps to address these high-cost areas, it continues to have material financial risks it needs to manage. Stress testing of its business plan has provided assurance that JRHT can adequately manage a reasonable range of downside scenarios, but this would require additional parental funding.

Background to the judgement

About the landlord

JRHT is an exempt charity registered under the Co-operative and Community Benefit Societies Act 2014. JRHT is the only RSH registered entity in its group and is the subsidiary of an unregistered charitable parent, JRF, a social change organisation.

JRHT operates across five local authority areas in Yorkshire and the north east and owns and manages around 2,400 social housing homes. The majority of these are general needs properties, with the remainder including supported housing, Low Cost Home Ownership and housing for older people.

At 31 December 2023, JRHT employed 512 full-time equivalent staff. Turnover for the year ended 31 December 2023 was £42.8m. JRHT plans to develop around 1,000 homes between 2020 and 2030.

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.

Further information

• Regulating the standards

• Regulatory standards for landlords