Decision

Previous regulatory judgement: Leeds Federated Housing Association Limited (5 July 2023)

Updated 29 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Leeds Federated Housing Association Limited
• Regulatory code: LH0989
• Publication date: 5 July 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 our previous published assessment of Leeds Federated Housing Association Limited’s financial viability and governance grades (G1/V2) following completion of an In Depth Assessment (IDA).

Based on evidence gained from the IDA, the regulator has assurance that Leeds Federated Housing Association Limited (LFHA) complies with the financial viability elements of the Governance and Financial Viability Standard. Its financial plans are consistent with, and support, its financial strategy. It has sufficient security, and forecasts to continue meeting its financial covenants.

LFHA is increasing investment in its homes as well as continuing to develop new homes. Operating margins remain tight and additional finance is required in the short term. LFHA’s financial capacity to respond to adverse events is reduced and in the context of an uncertain external operating environment, it is susceptible to economic changes including further increases in costs.

The regulator’s assessment of LFHA’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 LFHA’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

LFHA is a charitable community benefit society. LFHA’s principal activities are the development and management of social housing.

Registered Entities

LFHA is the only registered entity.

Unregistered Entities

LFHA has one wholly owned unregistered subsidiary, Leeds Federated Property Services, a non-charitable company managing design and build projects.

Geographic Spread and Scale

LFHA owns and manages around 4,460 homes. LFHA operates across the Leeds City Region, including in Leeds, Harrogate, Wakefield, Bradford, Selby, and Kirklees.

Staffing and Turnover

The provider employs 146 full-time equivalent staff. Its turnover for the year ended 31 March 2023 is £27.8m.^{[footnote 1]}

Development

Over a five-year period, LFHA intends to develop around 590 homes for affordable rent and low-cost home ownership across the Leeds City Region.

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. ↩