Decision

Saffron Housing Trust Limited (LH4412) Regulatory Judgement: 14 August 2024

Updated 14 August 2024

Applies to England

Our Judgement

	Grade/Judgement	Change	Date of assessment
Consumer	C1 Our judgement is that overall the landlord is delivering the outcomes of the consumer standards. The landlord has demonstrated that it identifies when issues occur and puts plans in place to remedy and minimise recurrence.	First grading	August 2024
Governance	G1 Our judgement is that the landlord meets our governance requirements.	Assessed and unchanged	August 2024
Viability	V2 Our judgement is that the landlord meets our viability requirements and has the financial capacity to deal with a reasonable range of adverse scenarios but needs to manage material risks to ensure continued compliance.	Assessed and unchanged	August 2024

Reason for publication

We are publishing a regulatory judgement for Saffron Housing Trust Limited (Saffron) following an inspection completed in August 2024.

This regulatory judgement confirms a consumer grading of C1, a governance grading of G1 and a financial viability grading of V2.

Prior to this regulatory judgement, the governance and financial viability grades for Saffron were last updated in November 2023 following a stability check, to confirm grades of G1 and V2. This is the first time we have issued a consumer grade in relation to this landlord.

Summary of the decision

From the evidence and assurance gained during the inspection it is our judgement that overall Saffron is delivering the outcomes of the consumer standards. Based on this assessment, we have concluded a C1 grade for Saffron.

Our judgement is that Saffron meets our governance requirements. Saffron has provided evidence to demonstrate the effectiveness of its governance arrangements and that it continues to effectively manage the risks of its activities, allowing it to deliver its strategic and charitable objectives. Based on this assessment, we have concluded a G1 grade for Saffron.

Our judgement is that Saffron meets our financial viability requirements and has the capacity to manage a reasonable range of adverse scenarios. Saffron has access to sufficient liquidity. However, increasing investment in its homes, together with the risks associated with its development of new homes and sales programme reduces its capacity to respond to adverse events. Based on this assessment, we have concluded a V2 grade for Saffron.

How we reached our judgement

We carried out an inspection of Saffron to assess how well Saffron is delivering the outcomes of the consumer standards and meeting our governance and financial viability requirements, as part of our planned regulatory inspection programme. During the inspection, we considered all four of the consumer standards: Neighbourhood and Community Standard, Safety and Quality Standard, Tenancy Standard, and the Transparency, Influence and Accountability Standard.

During the inspection we observed a board meeting and tenant scrutiny panel, spoke to tenants, held meetings with Saffron including with its non-executive directors, and reviewed a wide range of documents provided by Saffron.

Our regulatory judgement is based on all the relevant information we obtained during the inspection as well as analysis of information received from Saffron through its regulatory returns and other regulatory engagement activity.

Summary of findings 

Consumer – C1 – August 2024

During the inspection Saffron provided evidence-based assurance that it has appropriate systems in place to ensure the health and safety of its tenants in their homes and associated communal areas. Saffron has provided evidence of delivering improvements to landlord health and safety following recommendations from internal audit and external assurance reviews.

There is evidence that Saffron keeps an accurate record of the condition of its homes at an individual property level through physical surveys of all homes and has a process for keeping this information up to date. Saffron has demonstrated that it uses its understanding of the condition and safety of its tenants’ homes to make decisions on future investment to maintain and improve homes.

Saffron has demonstrated that it provides an effective, efficient and timely repairs and maintenance service and continues to make improvements when issues occur. Saffron undertook a review of its repairs and maintenance service involving significant tenant engagement that has informed its asset management delivery plan to improve the service and outcomes for tenants.

In relation to the Neighbourhood and Community Standard, Saffron has demonstrated that it prioritises the safety and security of its communities with a dedicated team and policy that sets out its approach to managing anti-social behaviour and hate incidents. Saffron has plans in place to improve both the service to tenants and transparency around performance reporting. Saffron provided evidence that it works with relevant organisations to deter and tackle anti-social behaviour in neighbourhoods where it provides social housing and Saffron could evidence examples of this happening in practice.

Overall Saffron’s approach is delivering the outcomes of the Transparency, Influence and Accountability Standard. Saffron provided evidence that it treats tenants with fairness and respect and has a clearly articulated ambition to ‘listen, learn, deliver’. Saffron also has an ‘Inspiring Trust’ strategic objective to champion tenant inclusion and increase tenant involvement. Saffron has recognised that it needs to improve the information it holds about tenants and plans are in place to address this.  

Saffron provided evidence that it has a range of mechanisms for tenants to influence and scrutinise its strategies, policies and services. These are well resourced and support is provided to tenants to overcome barriers to engagement. There is evidence to demonstrate the impact of tenant feedback on key areas of Saffron’s service delivery, resulting in improved outcomes for tenants.

Saffron evidenced that it provides accessible service and performance information to tenants. This supports tenant led scrutiny activity leading to the development of service improvement plans. Saffron recognises that some engagement methods provide more meaningful opportunities to influence and have a greater impact than other methods and is intending to develop a new engagement structure for tenants.

Saffron reviews performance information on complaints handling. It provided evidence that it learns from information on complaint types and outcomes and is using this to make improvements.

Governance – G1 – August 2024

Based on the evidence gained from the inspection there is assurance that Saffron’s governance arrangements enable it to effectively manage its risks and adequately control the organisation, allowing it to deliver its objectives. Saffron’s board demonstrated that it provides challenge on performance against Saffron’s strategic objectives and appropriate consideration of risks in its decision making.

Saffron has provided appropriate assurance that its board proactively reviews its approach to delivering against its purpose and regularly considers alternative options to ensure it is achieving value for money in making best use of resources. 

Saffron was able to provide evidence that it has established and maintains clear roles, responsibilities and accountabilities within its leadership and governance structure. There is evidence that the relationship between its board and committees is working in line with its delegations to strengthen assurance in key areas of risk and compliance.

Continuing governance improvement is evidenced through annual effectiveness reviews and in-depth periodic external governance reviews. The most recent external review was completed in April 2024 and recommendations have informed an action plan being monitored by the board. 

Board member skills, experience and knowledge are aligned with the activities of the organisation and there is a structured approach to developing and appraising skills to support succession planning. We have seen evidence of this through board observation, meetings with non-executive directors and the executive team as well as reviewing relevant documents including meeting minutes.  

Saffron has a risk management framework that aligns to its strategic risks. There is evidence of discussion and board challenge of the controls and assurance on strategic risks and of risks being managed effectively in practice. 

There is evidence that Saffron’s board actively seeks and gains an appropriate level of assurance across a range of areas. There is evidence of how this assurance has been used to make improvements including on Saffron’s approach to repairs, complaints and its customer contact centre.

Viability – V2 – August 2024

Based on evidence gained from this inspection, we have concluded that there is appropriate assurance that Saffron’s financial plans are consistent with, and support, its financial strategy. Saffron has an adequately funded business plan and is forecasting to continue to meet its financial covenants. Performance against golden rules and covenants is closely monitored and reported to the board regularly.

Saffron is forecasting increased investment in existing homes leading to weaker financial performance than in recent plans, impacting on its operating margin and interest cover. Its financial plan includes an increasing proportion of market and low cost home ownership sales income and Saffron needs to manage the risks posed by this as well as cost increases impacting on its investment in current homes.

Saffron’s financial plan forecasts that its internal golden rules will be met and includes sufficient liquidity and security headroom. Stress testing demonstrates that Saffron can manage a reasonable range of adverse scenarios. 

Background to the judgement

About the landlord

Saffron is an exempt charity registered under the Co-operative and Community Benefit Societies Act 2014. The group’s main activities are the development and management of social housing. At 31 March 2024, social housing lettings accounted for 70% of turnover over the next five years, with Low Cost Home Ownership sales at 11% and open market sales at 16%.

Saffron is the only RSH registered entity in its group and is a non-profit registered provider of social housing. Saffron has three wholly owned unregistered subsidiaries, Crocus Homes Limited, Crimson Development Homes Limited and Saffron Housing Finance plc.

Saffron owns and manages around 6,800 homes in the east of England, principally in South Norfolk. The majority of its housing is general needs, with some housing for older people and low numbers of supported housing for people with learning disabilities.

At 31 March 2024, the group employed 245 full-time equivalent staff. Group turnover for the year ended 31 March 2024 was £46m. Saffron plans to develop an average of 130 affordable homes per year over the next five years.

Our role and regulatory approach

We regulate for a viable, efficient, and well governed social housing sector able to deliver quality homes and services for current and future tenants.

We regulate at the landlord level to drive improvement in how landlords operate. By landlord we mean a registered provider of social housing. These can either be local authorities, or private registered providers (other organisations registered with us such as non-profit housing associations, co-operatives, or profit-making organisations).

We set standards which state outcomes that landlords must deliver. The outcomes of our standards include both the required outcomes and specific expectations we set. Where we find there are significant failures in landlords which we consider to be material to the landlord’s delivery of those outcomes, we hold them to account. Ultimately this provides protection for tenants’ homes and services and achieves better outcomes for current and future tenants. It also contributes to a sustainable sector which can attract strong investment.

We have a different role for regulating local authorities than for other landlords. This is because we have a narrower role for local authorities and the Governance and Financial Viability Standard, and Value for Money Standard do not apply. Further detail on which standards apply to different landlords can be found on our standards page.

We assess the performance of landlords through inspections and by reviewing data that landlords are required to submit to us. In Depth Assessments (IDAs) were one of our previous assessment processes, which are now replaced by our new inspections programme from 1 April 2024. We also respond where there is an issue or a potential issue that may be material to a landlord’s delivery of the outcomes of our standards. We publish regulatory judgements that describe our view of landlords’ performance with our standards. We also publish grades for landlords with more than 1,000 social housing homes.

The Housing Ombudsman deals with individual complaints. When individual complaints are referred to us, we investigate if we consider that the issue may be material to a landlord’s delivery of the outcomes of our standards.

For more information about our approach to regulation, please see Regulating the standards.

Further information

• Regulating the standards

• Regulatory standards for landlords