Current regulatory judgement: Local Space (31 January 2024)
Updated 31 January 2024
Applies to England
© Crown copyright 2024
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/regulatory-judgement-local-space-limited--2/current-regulatory-judgement-local-space-31-january-2024
RSH Narrative Regulatory Judgement
- Provider: Local Space
- Regulatory code: LH4454
- Publication date: 31 January 2024
- Governance grade: G1
- Viability grade: V1
- 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 financial viability from V2 to V1 and confirms its existing G1 grade for governance.
Our previous judgement noted that Local Space was exposed to interest cost risk and had forecast increasing investment in its existing homes which weakened its financial performance. Coupled with wider inflation and interest rate risks, this reduced its capacity to deal with downside risk.
Local Space continues to invest in its homes but has now secured new finance that provides greater certainty regarding its interest costs and has increased its capacity. It has an adequately funded business plan with sufficient security to support its borrowing requirements and is forecast to continue to meet its financial covenants.
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 ended 31 March 2023 Local Space’s turnover was £39.6m. It employed 40 full-time equivalent staff.
Development
Local Space plans to deliver 473 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. |
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.