Decision

Previous regulatory judgement: West Kent Housing Association (14 December 2022)

Updated 29 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: West Kent Housing Association

• Regulatory code: LH3827

• Publication date: 14 December 2022

• Governance grade: G1

• Viability grade: V2

• Reason for publication: Viability regrade

• Regulatory route: Stability Check and Reactive Engagement

Regulatory judgement

This judgement regrades our previous published judgement of West Kent Housing Association’s financial viability grade from V1 to V2 and confirms its existing G1 grade for governance.

The regulator has assurance that West Kent Housing Association (West Kent) is compliant with the financial viability elements of the Governance and Viability Standard and that its financial plans are consistent with, and support, its financial strategy. West Kent has an adequately funded business plan, sufficient security, and is forecast to continue to meet its financial covenants.

West Kent is increasing planned investment in its existing homes and in its information technology systems. These additional costs, together with higher inflation and interest rate pressures in the current economic environment, weaken West Kent’s interest cover position and its capacity to manage adverse events.

The regulator’s assessment of West Kent’s compliance with the governance elements of the Governance and Financial Viability Standard remains unchanged. On the basis of the Stability Check, the regulator has concluded that there is no evidence to indicate a change to West Kent’s current governance grading.

Other providers included in the judgement

None

About the provider

Origins

West Kent is charitable community benefit society. It was formed in 1989 to acquire stock from Sevenoaks District Council.

Registered Entities

West Kent is the only registered entity in the group.

Unregistered Entities

There are no active unregistered entities.

Geographic Spread and Scale

West Kent owns and manages around 8,100 mainly general needs homes and operates in the South-East of England.

Staffing and Turnover

In the year ended 31 December 2021 West Kent reported turnover of £66m and had 287 full-time equivalent employees.

Development

West Kent aims to deliver over 1,400 new homes by 2027, comprising a mix of social and affordable rent and low cost home 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.

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.