Decision

Current regulatory judgement: South Liverpool Homes Limited (28 February 2024)

Updated 28 February 2024

Applies to England

RSH Narrative Regulatory Judgement

• Provider: South Liverpool Homes Limited
• Regulatory code: L4230
• Publication date: 28 February 2024
• Governance grade: G1
• Viability grade: V1
• Reason for publication: Governance upgrade
• Regulatory route: Stability Check and Reactive Engagement

Regulatory judgement

This regulatory judgement upgrades our previous published assessment of South Liverpool Homes Limited’s governance from G2 to G1 and confirms its existing V1 grade for financial viability.

South Liverpool Homes Limited’s (SLH) governance grade was downgraded in June 2021 after an In Depth Assessment found control weaknesses in its approach to property development, allocations, and probity arrangements. The assessment also concluded that SLH’s board needed further assurance on the completeness of its assets and liabilities register, and the organisation’s strategic approach to delivering value for money to make more effective use of its financial resources.

Based on evidence gained from reactive engagement, the regulator has assurance that SLH has strengthened its governance to better achieve its corporate objectives. It has addressed weaknesses in its internal control framework by enhancing its procedures for managing conflicts of interest, and improving the quality and accessibility of information in its assets and liabilities register.

Under new leadership, SLH has also undertaken a comprehensive review of its operations with external support. This has led to a better consideration of risk and return in its activities and has resulted in the implementation of a new development delivery model. SLH has established a new value for money strategy with measurable targets linked to its corporate objectives.

The regulator’s assessment of SLH’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 SLH 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

SLH is a charitable community benefit society. SLH’s principal activity is the provision of social housing but it also seeks to contribute to the regeneration of the area in which it operates.

Registered Entities

SLH is the only registered entity.

Unregistered Entities

SLH has two unregistered entities. SLH Developments Limited is confined to the undertaking of design and build obligations on affordable housing developments that SLH has approved. Avela Services Limited manages an investment in photo-voltaic panels, and also owns majority shares in two limited liability partnerships:

• Avela Home Service LLP provides repairs & planned maintenance services primarily to SLH; and

• Avela Developments LLP undertakes affordable housing construction activity primarily for and on behalf of SLH.

Geographic Spread and Scale

SLH operates in South Liverpool, mainly in Speke and Garston. It owns and manages around 3,830 homes.

Staffing and Turnover

SLH’s turnover for the year ended 31 March 2023 was £21.1m. The group employed the full time equivalent of 164 staff.

Development

SLH is forecast to complete six homes in 2023/2024. It plans to build a total of 280 units between 2022 and 2027.

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.