Decision

Previous regulatory judgement: The Wrekin Housing Group Limited (15 November 2022)

Updated 29 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: The Wrekin Housing Group Limited
• Regulatory code: LH4220
• Publication date: 15 November 2022
• Governance grade: G1
• Viability grade: V2
• Reason for publication: Viability regrade
• Regulatory route: Stability Check and Reactive Engagement

Regulatory judgement

This regulatory judgement regrades our previous published assessment of The Wrekin Housing Group Limited’s viability from V1 to V2 and confirms its G1 grade for governance.

The regulator has assurance that The Wrekin Housing Group Limited (Wrekin) complies 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. Wrekin has an adequately funded business plan, sufficient security and is forecast to continue to meet its financial covenants.

Wrekin’s business plan includes increased development costs and additional investment in its existing homes. In combination with the current economic uncertainty in relation to inflation and interest rates, this reduces its capacity to deal with downside risk and increases the importance of fixed asset sales in maintaining covenant compliance.

The regulator’s assessment of Wrekin’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 Wrekin’s current governance grading.

Other providers included in the judgement

Choices Housing Association Limited

About the provider

Origins

Wrekin is a community benefit society. The group was set up to receive the transfer of 13,000 homes from Telford and Wrekin Council in 1999. Its stock is predominantly general needs with some sheltered, extra care and shared ownership schemes.

Registered Entities

Wrekin has one registered subsidiary. Choices Housing Association Limited specialises in providing residential care for people with learning difficulties and domiciliary care services across Shropshire and Staffordshire. It manages 701 units, the majority of which are owned by Wrekin.

Unregistered Entities

Wrekin has two unregistered subsidiaries:

• Old Park Services Limited is a wholly owned non-charitable subsidiary delivering Wrekin’s commercial strategy; and
• Strata Housing Services Limited is a development company.

Geographic Spread and Scale

The group manages around 13,000 units, predominantly within the local authority of Telford and Wrekin, but also spread across Shropshire and Staffordshire more widely.

Staffing and Turnover

Wrekin reported a turnover of £97.5m for the year ending 31 March 2022 and employs the full-time equivalent of 966 staff.

Development

Wrekin plans to develop around 1,700 units of affordable housing 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.

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.