Decision

Previous regulatory judgement: Red Kite Community Housing Limited (11 January 2023)

Updated 13 December 2023

Applies to England

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This publication is available at https://www.gov.uk/government/publications/regulatory-judgement-red-kite-community-housing-limited--2/current-regulatory-judgement-red-kite-community-housing-limited-11-january-2023

RSH Narrative Regulatory Judgement

  • Provider: Red Kite Community Housing Limited
  • Regulatory code: 4682
  • Publication date: 11 January 2023
  • Governance grade: G1
  • Viability grade: V1
  • Reason for publication: Governance upgrade
  • Regulatory route: Stability Check and Reactive Engagement

Regulatory judgement

This judgement upgrades our assessment of Red Kite Community Housing Limited’s governance from G2 to G1 and confirms its existing V1 grade for viability.

Red Kite Community Housing Limited (Red Kite) complies with the governance elements of the Governance and Financial Viability Standard and it has addressed the issues raised in the judgement we published in July 2021.

Based on evidence gained from reactive engagement, the regulator now has assurance that Red Kite has strengthened its governance arrangements. Compliance reporting on landlord health and safety obligations and financial covenants has improved and is sufficient to enable the board to exercise effective oversight. In addition, Red Kite has improved its stress testing and has strengthened its mitigation strategies. The board now has appropriate oversight of key risks facing the business.

The regulator’s assessment of Red Kite’s compliance with the financial viability elements of the Governance and Financial Viability Standard is unchanged. Based on evidence gained from a Stability Check, the regulator has assurance that Red Kite’s financial plans are consistent with, and support, its financial strategy. The provider has an adequately funded business plan, sufficient security in place, and is forecast to continue to meet its financial covenants under a wide range of adverse scenarios.

Other providers included in the judgement

None

About the provider

Origins

Red Kite is a charitable community benefit society. It was formed in 2011 to take transfer of the housing stock from Wycombe District Council. Its key activities are the provision and management of social housing and community investment.

Registered Entities

Red Kite is the only registered entity.

Unregistered Entities

Red Kite has four unregistered subsidiaries:

  • Twenty11 is a charitable company limited by guarantee that provides homes, management, and support services;
  • Edenmead Limited develops homes for outright sale;
  • Red Kite DevCo provides development services; and
  • Pennvale (Holdings) Limited is a commercial holding company which has been dormant since March 2021.

Geographic Spread and Scale

Red Kite owns and manages around 6,500 homes in Wycombe and the surrounding area.

Staffing and Turnover

Red Kite’s turnover for the year ended 31 March 2022 was £37m and it employed 146 full-time equivalent staff.

Development

Red Kite plans to develop around 822 homes between 2022 and 2030.

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.

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