Withdrawn Regulatory Notice: Rapport Housing and Care (31 March 2023)
Updated 5 April 2024
Applies to England
© Crown copyright 2024
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This publication is available at https://www.gov.uk/government/publications/rapport-housing-and-care/regulatory-notice-rapport-housing-and-care-31-march-2023
Withdrawn on 5 April 2024: Rapport Housing and Care de-registered on 6 December 2023.
RSH Regulatory Notice
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Provider: Rapport Housing and Care
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Regulatory code: H2362
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Publication date: 31 March 2023
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Reason for publication: Economic Standards
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Regulatory route: Reactive Engagement
Other providers included in the judgement
None
Regulatory Finding
The regulator has concluded that:
a) Rapport Housing and Care (Rapport) is non-compliant with the Governance and Financial Viability Standard. It has not managed its resources effectively to ensure its viability can be maintained and has not ensured its governance arrangements are effective.
b) Rapport has not been able to demonstrate that it has managed its affairs with an appropriate degree of skill, independence, diligence, effectiveness, prudence and foresight.
c) Rapport has failed to ensure that it has an appropriate, robust and prudent business planning, risk and control framework to ensure sufficient liquidity at all times.
The Case
The regulator began an investigation into potential viability issues at Rapport in January 2023, following the provider revising its cashflow forecasts to incorporate appropriate and better informed assumptions that revealed material financial concerns.
The Regulator’s Findings
Financial information received by the regulator in response to its investigations revealed significant liquidity issues in the short term caused by a misunderstanding by Rapport of its funding obligations. This resulted in it being unable to implement its proposed strategy of exiting and disposing of its care operations, including its involvement in a long term lease arrangement, to improve its financial position and maintain its liquidity position.
The business planning and risk management framework failed to ensure that Rapport, once its initial strategy had failed, had alternative options available to secure new funding or manage its costs accordingly to maintain its liquidity.
As a result of this, the regulator has concluded that Rapport has failed to demonstrate that it has an appropriate, robust and prudent risk and control framework in place. Rapport has failed to assess, manage, and address risks to ensure its long-term viability, including ensuring social assets are protected by carrying out detailed and robust stress testing, and before taking on new liabilities, ensuring it understands and manages the likely impact on current and future business and regulatory compliance.
This lack of effective board oversight and management of its key risks is a fundamental failure of governance. As a result, the regulator has concluded that the Rapport board has not been able to demonstrate that it is managing its affairs with an appropriate degree of skill, independence, diligence, effectiveness, prudence and foresight.
The regulator continues to work intensively with Rapport as they work to address the issues identified. As a result of these failings, we have appointed officers onto the board of Rapport on an interim basis under section 269 of the Housing and Regeneration Act 2008. The aim of these appointments is to strengthen the skill and capacity of the board and provide the necessary support to manage its financial position, ensure its tenants remain safe and ensure appropriate governance functions are maintained.
Based on its most recent statistical data return, Rapport had fewer than 1,000 units and is classed as a small provider. The regulator does not publish regulatory judgements for providers that fall into this category. Instead, in the interests of transparency, the regulator publishes a Regulatory Notice where it has evidence that a small registered provider is not meeting the regulatory standards. This notice is published under those arrangements.
Section 220 of the Housing and Regeneration Act 2008 states that the regulator’s regulatory and enforcement powers may be used if a registered provider has failed to meet a standard under section 194 of the Act. The regulator is considering what further action should be taken, including whether to exercise any more of its powers.
About the provider
Rapport is a small not-for-profit provider registered in 1977. It is a private company limited by guarantee without share capital and is also a registered charity.
The 2022 Statistical Data Return stated Rapport owned and managed 476 units of social housing. It provides supported housing, extra care and operates care homes.
About our Regulatory Notices
Regulatory notices are issued in response to an event of regulatory importance (for example, a finding of a breach of the Rent Standard or of a consumer standard that has or may cause serious harm) that, in accordance with its obligation to be transparent, the regulator wishes to make public. More detail about Regulatory notices is set out in Regulating the Standards.