Decision

Previous regulatory judgement: Nehemiah United Churches Housing Association Limited (28 July 2021)

Updated 15 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Nehemiah United Churches Housing Association Limited
• Regulatory code: L3833
• Publication date: 28 July 2021
• Governance grade: G1
• Viability grade: V2
• Reason for publication: Governance upgrade and changed basis for viability grade
• Regulatory route: In Depth Assessment

This judgement upgrades the regulator’s assessment of Nehemiah United Churches Housing Association Limited’s (Nehemiah) governance from G2 to G1 and changes the basis for its existing V2 grade for viability.

Nehemiah was downgraded from G1 to G2 in February 2019, following reactive engagement. At that time, we identified that the board needed to strengthen its business planning, risk and control framework, particularly in relation to the quality of its regulatory returns and stress testing. Nehemiah had also failed to report against the regulator’s value for money metrics in its 2018 financial statements.

Based on evidence gained from an In Depth Assessment (IDA), the regulator has assurance that Nehemiah has strengthened both its board skills and the quality of reporting, facilitating improvements to its business planning, risk and control framework. It has also implemented recommendations from an independent review of governance which have strengthened its approach to managing risk and stress testing. The quality of its recent regulatory returns and the publication of value for money metrics demonstrate compliance with regulatory requirements.

Following the IDA, the regulator has assurance that Nehemiah continues to comply with the financial viability elements of the Governance and Financial Viability Standard. Nehemiah’s financial plans are consistent with, and support, its financial strategy. It has an adequately funded business plan, sufficient security and is forecast to continue to meet its financial covenants.

Nehemiah has the capacity to deal with a reasonable range of adverse scenarios but needs to manage increased maintenance and major repairs expenditure. This reduces Nehemiah’s capacity and flexibility to cope with downside risk and requires on-going management to ensure continued compliance.

Other providers included in the judgement

None

About the provider

Origins

Nehemiah is a community benefit society. The homes it provides are predominantly general needs and housing for older people, with a small number of supported housing properties.

Registered Entities

Nehemiah is the only registered entity.

Unregistered Entities

The provider has one dormant unregistered subsidiary, Nehemiah Ventures, incorporated to provide and manage market rented properties.

Geographic Spread and Scale

Nehemiah owns and manages around 1,200 properties across six local authorities in the West Midlands.

Staffing and Turnover

Nehemiah’s turnover for the year ended 31 March 2021 was £7.1m. ^{[footnote 1]} It employs the full time equivalent of 27 staff.

Development

Nehemiah plans to develop or acquire 30 new homes between 2021 and 2023.

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’.

1. Unaudited figure ↩