Decision

Current regulatory judgement: Westmoreland Supported Housing Limited (30 September 2019)

Updated 5 July 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Westmoreland Supported Housing Limited
• Regulatory code: 4772
• Publication date: 30 September 2019
• Governance grade: G4
• Viability grade: V3
• Reason for publication: Governance downgrade and changed basis for viability grade
• Regulatory route: On-going Reactive Engagement

This regulatory judgement supersedes the judgement published on 30 November 2018, and is a result of further intensive regulatory engagement with Westmoreland.

Westmoreland was assessed as non-compliant with the governance and viability elements of the Governance and Financial Viability Standard on 30th November 2018. It remains non-compliant and breaches of the regulatory standards persist.

In the first half of 2019, following the regulator’s engagement, Westmoreland appointed new independent board members and with the support of its advisors has been developing action plans to address the governance and financial challenges it faces.

Progress has been made across a number of areas; however financial and other support continues to be required from third parties while Westmoreland attempts to restructure its business to ensure its viability. The regulator has continued to closely monitor progress.

In July 2019, creditor action taken against Westmoreland (who dispute the debt) led to the provider entering into the regulator’s insolvency process and the commencement of a moratorium. A combination of subsequent creditor forbearance, and actions taken by the provider and by the regulator, meant that the creditor action was withdrawn.

However, this is a serious failure. As a result the regulator has taken steps to increase capacity and skills on Westmoreland’s governing body while it works through the challenging circumstances it faces by appointing 3 new officers to the board under its statutory powers.

This statutory enforcement action is intended by the regulator to strengthen Westmoreland’s governing body, to ensure that the existing board members have the support needed to address the weaknesses identified in Westmoreland’s governance and financial management. The Westmoreland board has committed to work with the regulator and the regulator will continue to engage intensively with Westmoreland while solutions and recovery plans are developed and implemented.

As a result of the circumstances set out above, the regulator has decided, in accordance with its procedures, that Westmoreland’s grade for Governance should be downgraded to G4.

The immediate actions taken by the parties involved led to the insolvency processes that had been triggered, being halted. This has given Westmoreland time to work on restructuring its business plan. In view of the continued support and forbearance the organisation is receiving from its creditors its Viability grade remains V3. The regulator will continue to monitor the position closely as the restructuring plans are developed and implemented.

Other providers included in the judgement

None

About the provider

Origins

Westmoreland Supported Housing Limited (Westmoreland) is a not-for-profit Registered Provider and company limited by guarantee.

It provides supported housing and works with care providers to deliver accommodation and support for vulnerable adults with complex learning and physical disabilities. Westmoreland’s latest business plan reports it has 1,381 supported housing units.

Registered Entities

Westmoreland is the only registered entity.

Unregistered Entities

There are no unregistered entities.

Geographic Spread and Scale

Westmoreland operates in 112 local authorities nationally.

Staffing and Turnover

From the financial statements for the 18 month period ended 30 September 2018, Westmoreland employed 17 full-time equivalent members of staff. Turnover was £25m.

Development

Westmoreland does not develop new housing. Its growth strategy is to acquire properties to rent under long term leases.

About our judgements

Key to Grades

Governance:

• G1 (Compliant): The provider meets our governance requirements.
• G2 (Compliant): The provider meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance.
• G3 (Non-compliant): 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 (Non-compliant): 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:

• V1 (Compliant): The provider meets our viability requirements and has the financial capacity to deal with a wide range of adverse scenarios.
• V2 (Compliant): 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.
• V3 (Non-compliant): 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 (Non-compliant): 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 Processes

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’.