Decision

Current regulatory judgement: Onward Group Limited (25 October 2023)

Updated 25 October 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Onward Group Limited

• Regulatory code: 4649

• Publication date: 25 October 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 the regulator’s existing assessment of Onward Group Limited’s governance and financial viability as G1/V2, following completion of an In Depth Assessment (IDA).

The regulator has assurance that Onward Group Limited (Onward) continues to comply 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. Onward has an adequately funded business plan, sufficient security in place and is forecast to continue to meet its financial covenants under a reasonable range of scenarios.

Onward is investing significantly in its existing stock and in developing new homes, and as a result, interest cover is reduced. Additional investment will also be required to achieve energy efficiency targets. These factors, set in the context of economic pressures including inflation and interest rates, impact on Onward’s capacity to respond to adverse events.

The regulator’s assessment of Onward’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 Onward’s governance arrangements enable it to adequately control the organisation and to continue meeting its objectives.

Other providers included in the judgement

Onward Homes Limited

About the provider

Origins

Onward is the non-asset owning registered parent of the group. Its activities relate to the provision of social housing, including low-cost home ownership.

Registered Entities

Onward is a non-charitable registered society. Onward Homes Limited is a charitable subsidiary and owns social and affordable homes.

Unregistered Entities

There are five active unregistered entities in the group:

• Onward Build Limited, a development company;
• Onward Pension Trustee Limited, a Trustee of the Onward Pension Plan Scheme;
• Contour Property Services Limited, provides property management services;
• Onward Repairs, provides repairs services; and
• Atrium City Living Limited, an investment vehicle in two joint ventures which will deliver new homes.

Geographic Spread and Scale

Onward operates across the north-west of England in 30 local authorities. It owns and manages around 35,000 homes.

Staffing and Turnover

For the year ended 31 March 2023, Onward reported a turnover of £171.9m and employed 913 full-time equivalent staff.

Development

Onward has a target of delivering 4,049 new homes between 2023 and 2030. The new homes will be a mixture of affordable rent, shared ownership and market sale units.

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.