Decision

Previous regulatory judgement: Bournemouth Churches Housing Association Limited (25 January 2023)

Updated 29 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Bournemouth Churches Housing Association Limited

• Regulatory code: LH0155

• Publication date: 25 January 2023

• Governance grade: G1

• Viability grade: V2

• Reason for publication: Changed basis for viability grade

• Regulatory route: Stability Check

Regulatory judgement

This judgement confirms the regulator’s existing assessment of Bournemouth Churches Housing Associations Limited’s governance and viability (G1/V2).

The regulator has assurance that Bournemouth Churches Housing Association Limited (BCHA) complies with the financial viability elements of the Governance and Financial Viability Standard. Its financial plans are consistent with, and support, its financial strategy. It has sufficient access to liquidity and continues to forecast ongoing compliance with key financial covenants.

The nature of BCHA’s business means that it operates with tight financial margins, and it has material exposures that it needs to manage to ensure continued compliance. It has a reliance on volatile contractual income and is in the process of finalising stock investment assumptions, including those relating to energy efficiency spend. BCHA also needs to manage its security position carefully as it has only limited unencumbered chargeable assets available. This impacts on BCHA’s ability to access further funding. These factors, together with higher inflation and interest rate pressures in the current economic environment, weaken BCHA’s interest cover position and its capacity to manage adverse events.

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

Other providers included in the judgement

None

About the provider

Origins

BCHA is a community benefit society and the asset holding parent of the group. BCHA provides general needs homes as well as homeless housing, care, support, and employment and skills services for a range of people.

Registered Entities

BCHA is the only registered entity.

Unregistered Entities

BCHA has two unregistered subsidiaries:

• Salisbury Trust for the Homeless, a small charitable company limited by guarantee, provides homeless accommodation and related services; and

• RECOOP, a charitable company limited by guarantee, promotes the rehabilitation of offenders and ex-offenders.

Geographic Spread and Scale

The group owns and manages around 1,400 units across the south west.

Staffing and Turnover

BCHA reported turnover of £20.3m for the year ended March 2022 and employs the full-time equivalent of 324 staff.

Development

The group plans to develop around 300 new homes by 2026.

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.