Regulatory Judgement on Honeycomb Group Limited LH2162 - April 2021
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Regulatory Judgement on
Honeycomb Group Limited LH2162
April 2021Regulatory Judgement
Honeycomb Group Limited LH2162
Publication Details
Reason for publication
Governance downgrade
Regulatory process
In Depth Assessment
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
V1 (Compliant)
The provider meets our viability requirements and has the financial
capacity to deal with a wide range of adverse scenarios.
Key to grades
G1 / V1 Compliant
G2 / V2 Compliant
G3 / V3 Non-compliant and intensive regulatory engagement.
G4 / V4 Non-compliant, serious failures leading to either intensive regulatory engagement
or the use of enforcement powers
Page 2 of 6Regulatory Judgement
Honeycomb Group Limited LH2162
Provider Details
Origins
Previously known as Staffordshire Housing Association Limited, Honeycomb
Group Limited (HGL) was originally formed in 1985 to provide social housing
and related services to local people in Staffordshire and East Cheshire.
HGL is the registered group parent and is an exempt charity and community
benefit society.
The group’s main focus is on providing quality homes and services, increasing
the supply of affordable homes, preventing people from being homeless and
supporting victims of domestic abuse.
Registered Entities
HGL is the parent company and is the only registered entity in the group.
Unregistered Entities
HGL has two active unregistered subsidiaries:
• Honeycomb Charitable Services Limited provides charitable services. Trading
as ‘Concrete’ it seeks to prevent people from being homeless and as ‘Glow’ it
provides support to victims of domestic abuse.
• Stillness (924) Limited provides photovoltaic solar panels to some of HGL’s
properties and has a small number of market rent properties.
A further two unregistered subsidiaries are currently dormant: Blue Mountain
Limited and Search Housing Association Limited.
Geographic Spread and Scale
HGL owns and manages approximately 3,100 homes, most of which are
located in Staffordshire and neighbouring areas.
Staffing and Turnover
As at April 2021, the group employs about 290 members of staff. The group
turnover for the year ending 31 March 2020 was £21.1m.
Page 3 of 6Regulatory Judgement
Honeycomb Group Limited LH2162
Development
HGL’s development programme to 2022/23 has a target of 188 units.
Page 4 of 6Regulatory Judgement
Honeycomb Group Limited LH2162
Regulatory Judgement
This regulatory judgement downgrades our previous published assessment of
HGL’s governance from G1 to G2 and confirms its existing V1 grade.
HGL continues to meet the requirements on governance set out in the
Governance and Financial Viability Standard. However, following an In Depth
Assessment (IDA), we have concluded that HGL needs to improve some
aspects of its governance arrangements to support continued compliance.
HGL needs to strengthen its risk management and internal control frameworks,
including the integrity and management of data to improve strategic board
oversight and ensure that it is managing key risks effectively.
Weaknesses are reflected in key areas of its business. Currently HGL does not
have an up-to-date record of its asset and liabilities or an asset management
system which ensures comprehensive stock condition information. It has also
reported issues of compliance with health and safety requirements relating to
asbestos and fire safety. HGL’s controls are not operating consistently in line
with its policies and procedures and the timeliness and co-ordination of
management reporting needs to be improved.
Addressing these governance weaknesses will enable the board to improve its
understanding of the potential impact of risks on its decisions and mean that
HGL’s business planning and performance monitoring are better informed. HGL
is fully engaged with the regulator in taking the necessary steps to address the
identified areas of weakness.
The regulator’s assessment of HGL’s compliance with the financial viability
elements of the Governance and Financial Viability Standard is unchanged.
Based on evidence gained from the IDA, the regulator has assurance that
HGL’s financial plans are consistent with, and support, its financial strategy.
The provider has an adequately funded business plan, sufficient security in
place, and is forecast to continue to meet its financial covenants under a wide
range of adverse scenarios.
Page 5 of 6Regulatory Judgement
Honeycomb Group Limited LH2162
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 https://www.gov.uk/rsh.
Page 6 of 6You can also read
