Decision

Current regulatory judgement: Railway Housing Association and Benefit Fund (29 November 2023)

Updated 29 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Railway Housing Association and Benefit Fund
• Regulatory code: A1855
• Publication date: 29 November 2023
• Governance grade: G2
• Viability grade: V2
• Reason for publication: Governance downgrade
• Regulatory route: Stability Check and Reactive Engagement

Regulatory judgement

This regulatory judgement downgrades Railway Housing Association and Benefit Fund’s governance grade from G1 to G2 and confirms its existing V2 grade for financial viability.

Railway Housing Association and Benefit Fund (RHA) continues to meet the requirements on governance set out in the Governance and Financial Viability Standard. However, following reactive engagement we have concluded that it needs to improve aspects of its governance arrangements to support continued compliance.

Reactive engagement, following a self-referral to the regulator, has found weaknesses in the board’s oversight of key areas, leaving RHA unnecessarily exposed to potentially material risks. With external support, RHA has identified where board assurance needs to be strengthened to ensure it manages its affairs with an appropriate degree of control. RHA also needs to improve its stock survey programme to strengthen assurance about the condition of its homes.

The regulator’s assessment of RHA’s compliance with the financial viability elements of the Governance and Financial Viability Standard is unchanged. Based on evidence gained from the Stability Check, the regulator has assurance that RHA’s financial plans are consistent with, and support, its financial strategy. There is an adequately funded business plan, sufficient security and ongoing compliance with financial covenants is forecast.

RHA is increasing investment in its existing homes, including a programme of energy efficiency improvements. Delivery of this investment reduces RHA’s capacity against its financial covenants. Set in the context of economic pressures including inflation and interest rates, this impacts on RHA’s capacity to respond to adverse events.

Other providers included in the judgement

None

About the provider

Origins

RHA is an unincorporated charitable trust with a corporate charitable trustee. Its principal activity is the provision of housing for older people.

Registered Entities

RHA is the only registered entity.

Unregistered Entities

There are no unregistered entities.

Geographic Spread and Scale

RHA owns and manages around 1,600 homes in the North East of England.

Staffing and Turnover

For the year ended 31 March 2023, RHA reported a turnover of £7.9m and employed 31 full-time equivalent staff.

Development

RHA plans to deliver 14 homes in 2023/24 with no other planned and committed development.

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.