Decision

Watford Community Housing Trust (L4495) - Regulatory Judgement: 24 July 2024

Updated 24 July 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	July 2024
Governance	G1 Our judgement is that the landlord meets our governance requirements.	Assessed and unchanged	July 2024
Viability	V1 Our judgement is that the landlord meets our viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.	Assessed and unchanged	July 2024

Reason for publication

We are publishing a regulatory judgement for Watford Community Housing Trust (WCHT) following an inspection completed in July 2024.

This regulatory judgement confirms a consumer grading of C1, a governance grading of G1 and a financial viability grading of V1.

Prior to this regulatory judgement, the governance and financial viability grades for WCHT were last updated in December 2023 following a stability check, to confirm grades of G1 and V1. This is the first time we have issued a consumer grade in relation to this landlord.

Summary of the decision

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

Our judgement is that WCHT meets our governance requirements. The board and leadership team have the skills and capacity to deliver WCHT’s strategic objectives, with effective risk management and performance and reporting frameworks in place to support this. Based on this assessment, we have concluded a G1 grade for WCHT.

Our judgement is that WCHT meets our financial viability requirements and has the financial capacity to deal with a wide range of adverse scenarios. WCHT has a strong financial profile and its stress testing demonstrates that financial capacity is built into its business plan. WCHT has provided appropriate assurance that it has access to sufficient liquidity and adequate funding in place. Based on this assessment, we have concluded a V1 grade for WCHT.

How we reached our judgement

We carried out a programmed inspection of WCHT to assess how well WCHT is delivering the outcomes of the consumer standards and meeting our governance and financial viability requirements. 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 WCHT and its non-executive directors, and reviewed a wide range of documents provided by WCHT.

Our regulatory judgement is based on all the relevant information we obtained during the inspection as well as analysis of data supplied by WCHT in its regulatory returns and other regulatory engagement activity.

Summary of findings

Consumer – C1 – July 2024

During the inspection, WCHT provided evidence-based assurance that it has appropriate systems for ensuring the health and safety of tenants in their homes and associated communal areas. WCHT has provided appropriate assurance that it has a good understanding of its compliance with its landlord health and safety requirements. WCHT has provided evidence that it has delivered improvements to certain aspects of landlord health and safety, in response to recommendations from internal audits and external assurance reviews.

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

WCHT has evidenced that it provides an effective repairs service to tenants and continues to implement actions to improve the service and outcomes to tenants. WCHT identified issues with repair satisfaction levels and has made proactive, tenant focused improvements to ensure tenants receive effective communication about its timescales for repairs.

WCHT’s board and tenants receive reporting on complaints performance and insight and there is evidence that this performance data is used by WCHT to improve its services. WCHT’s approach to complaints has been scrutinised by tenants and reviewed independently with improvements made as a result.

WCHT has evidenced that it provides a wide range of opportunities for tenants to influence and scrutinise its strategies, policies and services. There is evidence that WCHT has arrangements in place to seek the views of tenants and to enable them to provide scrutiny, which has directly influenced how WCHT delivers services to improve outcomes for tenants. Tenant engagement is well structured and supported. WCHT acknowledges the need to continue to focus on its communication with tenants and to capture the views from a range of tenants, with strategies developed to deliver in these areas.

WCHT has provided appropriate evidence that it is making effective use of its performance and insight information to shape services. It provides a range of information for tenants to support effective scrutiny, using neighbourhood and building level data.

Governance – G1 – July 2024

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

WCHT provided evidence that there is a regular robust review of its approach to making best use of resources to deliver against the organisation’s purpose. This includes WCHT’s board regularly undertaking an appraisal of alternative options to ensure strategic value for money.

WCHT provided appropriate assurance 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 governance review took place in October 2022 and WCHT has implemented its recommendations.

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 which feeds into succession planning. We have seen evidence of this through board observation, meetings with non-executive directors and executive team members as well as reviewing relevant documents including meeting minutes.

Viability – V1 – July 2024

Based on the evidence gained through the inspection, we have concluded that there is appropriate assurance that WCHT’s financial plans are consistent with, and support, its financial strategy. WCHT has evidenced that it has an adequately funded business plan, sufficient security in place to support its financial plans, and forecasts that it will continue to meet its financial covenants under a wide range of adverse scenarios.

We have appropriate assurance that WCHT’s board has good oversight of covenant compliance and there is evidence of strong levels of forecast headroom with no reliance on sales income. WCHT forecasts strong interest cover while continuing to deliver its development programme and invest in existing stock.

Background to the judgement

About the landlord

Formed as a stock transfer from Watford Borough Council in 2007, WCHT is an exempt charity registered under the Co-operative and Community Benefit Societies Act 2014. At 31 March 2023, 85% of WCHT’s turnover was from social housing lettings, with 10% from other social housing activities primarily comprised of Low Cost Home Ownership sales, and 5% from non-social housing activities.

WCHT is the only RSH registered entity in its group and is a non-profit registered provider of social housing. WCHT has two unregistered subsidiaries, Clarendon Living Limited and WCHT DevCo Limited.

WCHT operates across six local authority areas, mainly in Hertfordshire, with the majority of social housing homes being located in Watford. It owns and manages around 5,200 social housing homes. The majority are general needs properties, with the remainder including supported housing, homes for older people, affordable rent and Low-Cost Home Ownership.

At 31 March 2023, the group employed 202 staff. Group turnover for the year ended 31 March 2023 was £41m. WCHT developed 201 properties during the 2023/24 financial year.

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