Previous regulatory judgement: Local Space (15 November 2022)
Updated 31 January 2024
Applies to England
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RSH Narrative Regulatory Judgement
- Provider: Local Space
- Regulatory code: LH4454
- Publication date: 15 November 2022
- Governance grade: G1
- Viability grade: V2
- Reason for publication: Viability regrade
- Regulatory route: Stability Check and Reactive Engagement
Regulatory judgement
This regulatory judgement regrades our previous published assessment of Local Space’s viability from V1 to V2 and confirms its G1 grade for governance.
The regulator has assurance that Local Space 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. Local Space has sufficient security to support its borrowing requirements and is forecast to continue to meet its financial covenants.
Local Space is increasing investment in its existing stock, with a consequential reduction in financial performance, and seeking to refinance existing facilities. In the current economic environment, with uncertainty in relation to wider inflation and interest rate risks, this reduces its capacity to deal with downside risk.
The regulator’s assessment of Local Space’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 Local Space’s current governance grading.
Other providers included in the judgement
None
About the provider
Origins
Local Space was established in 2006 in partnership with the London Borough of Newham with the primary aim of regenerating private sector housing to house people on homeless waiting lists. It is registered as a charitable community benefit society.
Registered Entities
Local Space is the only registered entity.
Unregistered Entities
There are no unregistered entities.
Geographic Spread and Scale
Local Space owns a portfolio of around 2,700 homes in London, primarily in the boroughs of Newham, Waltham Forest, Hackney and Tower Hamlets.
Staffing and Turnover
For the year ending 31 March 2022 Local Space’s turnover was £38.5m. It employed 36 full-time equivalent staff.
Development
Local Space plans to deliver 244 new rented homes over the next five years.
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. |
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.