News story

RSH publishes RJ for South Yorkshire Housing Association Limited

South Yorkshire Housing Association Limited has breached the economic standards and, as a result, it has been downgraded to V3 / G3 status.

From:
Regulator of Social Housing
Published
8 June 2023

In a regulatory notice published today (8 June 2023), the Regulator of Social Housing has concluded that South Yorkshire Housing Association Limited has breached the economic standards in relation to both governance and financial viability. As a result it has been downgraded to non-compliant G3 / V3 grades.

Following an investigation, the regulator found weaknesses in SYHA’s internal controls framework and concluded that its board has not been managing the organisation with an appropriate level of skill, diligence, prudence or foresight.

Weaknesses in its financial governance has led to SYHA miscalculating its covenant compliance over a number of years. This has resulted in actual and forecast covenant breaches with one of its funders.

SYHA’s business plan demonstrates limited financial capacity in the short to medium term, and does not currently have adequate mitigation strategies in place to deal with plausible financial stresses.

In agreement with the regulator, SYHA is working to strengthen its financial capacity and improve its governance arrangements.

Harold Brown, Senior Assistant Director for Investigations and Enforcement at RSH, said:

Our investigation found serious issues of concern with SYHA’s financial processes and controls, resulting in breaches to its loan covenants. SYHA needs to address these issues promptly to ensure its long-term viability and covenant compliance, and we will continue to monitor the provider closely as it carries out this work.

Notes to editors

  1. Registered providers of social housing with more than 1,000 units are awarded both governance (G) and financial viability (V) grades for their compliance with the Governance and Financial Viability Standard. Grades of G1 and G2 indicate compliance with the governance element of the Governance and Financial Viability Standard, while grades of G3 and G4 indicate non-compliance. Similarly, V1 and V2 grades indicate compliance with the financial element and V3 and V4 grades indicate non-compliance.

  2. RSH placed SYHA on the gradings under review list on 5 May 2023 to indicate that it was investigating the provider’s compliance with the Governance and Financial Viability Standard.

  3. SYHA’s previous regulatory grades were G2 / V2. They are now G3 / V3.

  4. More information about how RSH regulates against its standards is available in Regulating the Standards.

  5. RSH promotes a viable, efficient and well-governed social housing sector able to deliver and maintain homes of appropriate quality that meet a range of needs. It does this by undertaking robust economic regulation focusing on governance, financial viability and value for money that maintains lender confidence and protects the taxpayer. It also sets consumer standards and may take action if these standards are breached and there is a significant risk of serious detriment to tenants or potential tenants.

  6. For press office contact details, see our Media enquiries page. For general queries, please email enquiries@rsh.gov.uk or call 0300 124 5225.

Published 8 June 2023