The Social Housing Regulator April 2017 HCA Regulatory Judgement on Plus Dane Housing Group Limited L4355 Including the following registered entities Plus Dane (Merseyside) Housing Association Limited L4556 Plus Dane (Cheshire) Housing Association Limited LH4158
HCA Regulatory Judgement Publication Details Reason for publication Changed basis for Viability and Governance grades Regulatory process In Depth Assessment (IDA) Please see the definitions in Annex 1 for more detail Governance G2 (Compliant) The provider meets our governance requirements but needs to improve some aspects of its governance arrangements to support continued compliance Viability 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. Key to grades G1 / V1 G2 / V2 G3 / V3 G4 / V4 Compliant Compliant Non-compliant and intensive regulatory engagement. Non-compliant, serious failures leading to either intensive regulatory engagement or the use of enforcement powers. Page 2 of 6
Provider Details HCA Regulatory Judgement Origins Plus Dane Housing Group Limited (PDHG) is a non-charitable registered society incorporated under the Co-operative and Community Benefit Societies Act 2014. It is a registered provider of social housing. PDHG was formed in May 2008 with the merger of Plus Housing Group and The Dane Housing Group. PDHG s core business is the provision of rented housing and provides a small number of Affordable Home Ownership, outright leasehold, market rent and extra care properties. Non-housing activity includes social enterprise based employment opportunities providing group-wide grounds maintenance contracts, waste management and recycling services, income from office blocks and shops. Registered Entities PDHG has two wholly-owned registered subsidiaries. Plus Dane (Merseyside) Housing Association Limited (PDM) is a registered home owning charitable subsidiary. Plus Dane (Cheshire) Housing Association Limited (PDC) is a registered noncharitable subsidiary which owns and manages homes Unregistered Entities The group has three unregistered entities. INclude Neighbourhood Regeneration Limited (INclude) is a non-charitable housing regeneration company and a subsidiary of PDHG. It undertakes community regeneration work and group-wide grounds maintenance contracts. Staffing resource is provided by PDM via a service level agreement. Three60 Property Investors Limited (Three60) is a company limited by shares, and a subsidiary of PDM. It invests in commercial and residential property. Three60 s remaining assets consist of one market sale scheme. Dane Partnership Homes Limited (DPH) is a subsidiary of PDC, established to provide design and build services for the group for VAT purposes. Geographic Spread and Scale PDHG works in 14 Local Authorities in the North West and Staffordshire. The group owned around 12,900 properties at March 2016, predominantly in Merseyside and Cheshire. It also manages nearly 5,800 properties on behalf of others, the vast majority of which relate to a single contract for the management of properties in Ellesmere Port & Neston on behalf of Cheshire West and Chester local authority. Page 3 of 6
Staffing and Turnover HCA Regulatory Judgement For the year ending 31 March 2016, PDHG generated consolidated turnover of 96.9m and employed 726 staff. Development PDHG plans to develop around 1,000 new homes during the life of its 2016-2021 Corporate Plan, over a range of tenures supported in some instances with affordable homes funding from the Homes and Communities Agency (HCA). Page 4 of 6
Regulatory Judgement HCA Regulatory Judgement This judgement updates the regulator s previous assessment of both PDHG s governance and financial viability which was published in September 2015. Although PDHG s grades are unchanged, this updated judgement has been issued to reflect evidence gained from an IDA. PDHG continues to meet the requirements on governance set out in the Governance and Financial Viability Standard but needs to improve some aspects of its governance arrangements to support continued compliance. Following the IDA we have concluded that since our last judgement, PDHG has strengthened its governance arrangements. The group has implemented a succession plan for non-executive board members culminating in the appointment of a new Chair, Chair of Audit and a number of other nonexecutive board members. PDHG has also developed a structured approach to business planning, growth and financial planning and has improved strategic financial management. The group has demonstrated effective mitigation of risk both within the Three60 subsidiary and in regard to the board s decision not to pursue the retendering of the Ellesmere Port and Neston management contract. However, PDHG needs to evidence improvements in the robustness of some of its underpinning business strategies, the quality of board reporting including strengthened stress testing and value for money outcomes, delivery of proposed structural changes, and the capacity to respond to risks at an operational level, in order to support continued compliance. The regulator s assessment of PDHG s compliance with the financial viability element of the Governance and Financial Viability standard is unchanged. Based on evidence gained from the IDA, the regulator has assurance that PDHG s financial plans are consistent with, and support, its financial strategy. PDHG has an adequately funded business plan, sufficient security in place, and is forecast to continue to meet its financial covenants under a reasonable range of scenarios. However, PDHG needs to manage material risks to ensure continued compliance. These risks include future refinancing requirements, stock maintenance demands, maintaining a development programme, the delivery of anticipated efficiency savings and the continuing financial impact of the Welfare Reform and Work Act 2016. Page 5 of 6
HCA Regulatory Judgement Annex 1: 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 intelligence 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 intelligence gained from both Stability Checks and Reactive Engagement. Further Information For further details about these processes, please see Regulating the Standards on http://www.gov.uk/hca. Page 6 of 6