Decision

Previous regulatory judgement: Tuntum Housing Association Limited (29 September 2021)

Updated 29 November 2023

Applies to England

RSH Narrative Regulatory Judgement

• Provider: Tuntum Housing Association Limited
• Regulatory code: L3808
• Publication date: 29 September 2021
• Governance grade: G2
• Viability grade: V2
• Reason for publication: Governance downgrade and changed basis for viability grade
• Regulatory route: In Depth Assessment

This regulatory judgement downgrades our previous published assessment of Tuntum Housing Association Limited’s (Tuntum) governance from G1 to G2 and confirms its existing V2 grade for viability.

Following completion of an In Depth Assessment (IDA), we have concluded that Tuntum needs to improve aspects of its governance arrangements to ensure continued compliance with regulatory requirements. In particular, Tuntum’s risk management and organisational capacity need to be strengthened.

Reporting on some business critical risks is insufficient to provide Tuntum’s board with the requisite level of oversight. The quality of information reported to the board is variable and the level of assurance on some risks is not aligned to risk prioritisation. Specifically, board oversight of landlord health and safety risk, investment in existing assets and specialist housing risks, requires strengthening. Tuntum’s recently developed risk framework requires further work to be effective.

While Tuntum has made changes to its organisational structure and new appointments to strengthen operational capacity, the board needs to consider what further changes are needed to improve oversight and delivery of strategic objectives.

Tuntum also needs to improve its commitment to the transparency requirements of co-regulation. In particular, notifying the regulator when issues arise that have the potential to impact on its compliance with regulatory standards.

Based on the IDA, the regulator has assurance that Tuntum continues to comply with the financial viability elements of the Governance and Financial Viability Standard. Tuntum’s financial plans are consistent with and support its strategy. It has an adequately funded business plan, sufficient security and forecasts to continue meeting its financial covenants.

Tuntum has the capacity to deal with a reasonable range of adverse scenarios. However, Tuntum has low interest cover margins along with an increasing debt burden to fund its on-going development. It is in the process of finalising stock investment assumptions and, with limited unencumbered assets available, needs to manage its security position. These factors reduce Tuntum’s capacity and flexibility to cope with downside risk and require on-going management to ensure continued compliance.

Other providers included in the judgement

None

About the provider

Origins

Tuntum is an exempt charity registered under the Co-operative and Community Benefit Societies Act 2014 and is the parent of its group. It was established as a black and minority ethnic housing association. Tuntum’s core business is the provision of general needs housing. It also provides supported housing and services.

Registered Entities

Tuntum is the only registered entity in the group.

Unregistered Entities

Tuntum has one unregistered subsidiary, Time Out Care Services. It ceased trading in 2017 and is currently dormant.

Geographic Spread and Scale

Tuntum operates across 12 local authority areas in the East Midlands. It owns and manages around 1,500 properties, two-thirds of which are in Nottingham.

Staffing and Turnover

As of 31 March 2021, the group employed 56 staff. Group turnover for the year to 31 March 2021 was £9.2m.

Development

Tuntum plans to develop around 267 units between 2021 and 2026. This includes 150 units to be delivered through a Homes England Strategic Partnership.

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’.