Decision

Previous regulatory judgement: Joseph Rowntree Housing Trust (28 April 2021)

Updated 29 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Joseph Rowntree Housing Trust
• Regulatory code: 5079
• Publication date: 28 April 2021
• Governance grade: G1
• Viability grade: V2
• Reason for publication: Governance upgrade
• Regulatory route: In Depth Assessment

This judgement upgrades our assessment of Joseph Rowntree Housing Trust’s (JRHT) governance from G2 to G1 and confirms its existing V2 grade for viability. Based on evidence from an In Depth Assessment (IDA), the regulator now has assurance that JRHT’s governance arrangements are sufficient to enable it to maintain compliance with regulatory requirements.

JRHT’s governance judgement was downgraded from G1 to G2 in June 2017 following an IDA. At that time, the regulator concluded that JRHT needed to improve its approach to risk management to support continued compliance with the Governance and Financial Viability Standard.

JRHT has since simplified its governance arrangements by incorporating as a charitable community benefit society and becoming a formal subsidiary of JRF. This has clarified its relationship with JRF and enabled the creation of an independent and skills-based board for JRHT.

JRHT has also strengthened its approach to risk management. Board reporting has been improved, and the establishment of two sub-committees, focused on development and care, has facilitated increased oversight. JRHT’s stress testing now provides the board with a better understanding of its risk exposures, with mitigation strategies identified to manage risks to long-term viability. Financial triggers have been implemented to alert the board to key risks crystallising.

The regulator has assurance that JRHT 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 an adequately funded business plan, sufficient security, and forecasts to continue meeting its financial covenants.

While JRHT has taken steps to redress high cost areas, it continues to have material financial risks it needs to manage. Financial performance in its core business remains weak with reliance on sales and a need to deliver against challenging assumptions to maintain interest cover covenant compliance.

Other providers included in the judgement

None

About the provider

Origins

JRHT is a charitable community benefit society. Its strategic focus is to build and develop strong empowered communities without poverty or isolation.

Registered Entities

JRHT is the only registered entity.

Unregistered Entities

JRHT is the subsidiary of an unregistered charitable parent, Joseph Rowntree Foundation (JRF), a social change organisation. JRHT itself has no unregistered subsidiaries.

Geographic Spread and Scale

JRHT owns about 2,600 homes, the majority of which are located in York with the remainder located in other parts of Yorkshire and the North East.

Staffing and Turnover

JRHT’s turnover for the year ended 31 December 2019 was £28.8m. JRHT employs 634 full time equivalent staff, and jointly employs an additional 83 staff with JRF.

Development

JRHT has previously agreed plans to develop 1,000 units between 2019 and 2029, funded in part by a £39m grant from JRF.

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’.