Decision

Previous regulatory judgement: Plymouth Community Homes Limited (30 November 2022)

Updated 13 December 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Plymouth Community Homes Limited

• Regulatory code: L4543

• Publication date: 30 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 judgement of Plymouth Community Homes Limited’s viability grade from V1 to V2 and confirms its existing G1 grade for governance.

The regulator has assurance that Plymouth Community Homes Limited (PCH) is compliant 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. PCH has an adequately funded business plan, sufficient security, and is forecast to continue to meet its financial covenants.

PCH needs to manage a range of exposures including increased costs due to ongoing investment in existing homes, a greater level of long-term debt to fund its programme of development activity and exposure to wider housing market risks from its future market sale activity. These factors, together with higher inflation and interest rate pressures in the current economic environment, weaken PCH’s financial performance and its capacity to manage adverse events.

The regulator’s assessment of PCH’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 PCH’s current governance grading.

Other providers included in the judgement

None

About the provider

Origins

PCH is a community benefit society which commenced business in 2009 following a stock transfer from Plymouth Council.

Registered Entities

PCH is the only registered entity in the group.

Unregistered Entities

There are two unregistered entities within the group:

• Plymouth Community Homes Regeneration Company Limited; and

• Plymouth Community Homes Energy Limited which installs and manages photovoltaic panels under a license agreement on properties owned by PCH.

Geographic Spread and Scale

PCH operates in and around Plymouth. It manages over 14,000 general needs and supported housing units.

Staffing and Turnover

PCH has around 600 full-time equivalent employees. It reported turnover of £74.7m in the year ended 31 March 2022.

Development

PCH aims to develop around 220 homes per year.

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.