Decision

Current regulatory judgement: YMCA St Paul’s Group (30 August 2023)

Updated 30 August 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: YMCA St Paul’s Group
• Regulatory code: LH4078
• Publication date: 30 August 2023
• Governance grade: G2
• Viability grade: V2
• Reason for publication: Governance downgrade and changed basis for viability grade
• Regulatory route: In Depth Assessment

Regulatory judgement

This regulatory judgement downgrades our assessment of YMCA St Paul’s Group’s governance from G1 to G2 and confirms its existing V2 grade for financial viability.

YMCA St Paul’s Group (YMCA SPG) continues to meet the requirements on governance set out in the Governance and Financial Viability Standard. However, following an In Depth Assessment (IDA) we have concluded that it needs to improve aspects of its governance arrangements to ensure continued compliance. The IDA has identified gaps in the board’s oversight of stress testing, risk management, and delivery of the strategic plan outcomes.

Monitoring of landlord health and safety risks is in place. However, board reporting needs strengthening to facilitate adequate oversight and challenge of performance.

Board oversight of stress testing and mitigation strategies requires improvement so that YMCA SPG can assess and respond to changes in its financial position. YMCA SPG is undertaking additional work on stress testing and mitigations and the board needs to continue this work at pace to inform strategic decision-making.

The board is focused on the successful delivery of YMCA SPG’s strategy. However, performance monitoring of delivery against the strategic plan, covers only a limited range of targets, restricting the ability of the board to take action if delivery is not on track. YMCA SPG needs to strengthen its oversight of strategic performance.

The regulator has assurance that YMCA SPG 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. YMCA SPG has an adequately funded business plan, sufficient security in place and is forecast to meet its financial covenants in the latest business plan, albeit with limited headroom.

While YMCA SPG has the financial capacity to deal with some exposures, it has material risks and needs to manage these to support continued compliance. YMCA SPG is a relatively high cost and low operating margin supported housing provider and has a range of non-housing activities that present risks to its forecast financial performance. The business plan requires operating cost efficiencies and non-housing income to support its delivery.

Other providers included in the judgement

West London YMCA

About the provider

Origins

YMCA SPG was formed in April 2018. It is a registered charity and company limited by guarantee. YMCA SPG is a specialist provider delivering a range of community based services to both its own tenants and other members of the communities in which it operates.

Registered Entities

YMCA SPG is the registered parent of the group. It has one registered subsidiary, West London YMCA.

Unregistered Entities

YMCA SPG has three unregistered entities, all are dormant. These are, Forest YMCA, YMCA St Paul’s Group (Development) Ltd and YMCA London Group Limited.

Geographic Spread and Scale

The group owns and manages around 1,200 units located in London, Surrey, and Berkshire. The majority of its stock is supported housing.

Staffing and Turnover

At 31 March 2023 YMCA SPG employed 303 full-time equivalent staff. Group turnover for the year was £26.3m.^{[footnote 1]}

Development

The only development scheme, YMCA Wimbledon, is due to complete during the 2023/24 financial year, replacing older supported housing units with a new facility, and adding approximately 10 units. No further development is assumed in the business plan.

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.

1. Based on unaudited accounts for 2022/23. ↩