Decision

Previous regulatory judgement: South Lakes Housing (5 July 2023)

Updated 29 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: South Lakes Housing
• Regulatory code: 4686
• Publication date: 5 July 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 South Lakes Housing’s governance and financial viability as G1/V2, following completion of an In-Depth Assessment (IDA).

The regulator has assurance that South Lakes Housing (SLH) 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. SLH 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.

SLH is investing significantly in its existing homes, including an accelerated programme to improve energy efficiency, resulting in reduced levels of interest cover. Alongside the current economic uncertainty in relation to inflation and interest rates, SLH has reduced capacity to respond to adverse events.

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

Other providers included in the judgement

None

About the provider

Origins

SLH was established following a stock transfer in 2012 and is a charitable not-for-profit community benefit society. SLH focuses on providing affordable housing in and around the south Cumbria and north Lancashire areas.

Registered Entities

SLH is the only registered entity.

Unregistered Entities

Cumbrian Housing and Property Services Limited is SLH’s only subsidiary and is currently dormant.

Geographic Spread and Scale

SLH owns and manages around 3,223 homes in the Westmorland and Furness and Lancaster districts. The majority of homes are general needs housing.

Staffing and Turnover

For the year ended 31 March 2023, the group employed 123 full-time equivalent staff and reported a turnover of £21.3m.^{[footnote 1]}

Development

SLH has a target of delivering around 400 new homes between 2020 and 2025. This mainly comprises general needs, affordable rent and shared ownership 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.

1. Based on unaudited accounts for 2022/23. ↩