Current Regulatory Judgment: Cheshire Peaks & Plains Housing Trust Limited (September 29, 2021)

Narrative regulatory judgment

  • Provider: Cheshire Peaks & Plains Housing Trust Limited
  • Regulatory Code: L4472
  • Release Date: September 29, 2021
  • Governance level: G2
  • Viability level: V1
  • Reason for posting: Governance upgrade
  • Regulatory route: stability control and reactive engagement

This regulatory judgment improves our assessment of the governance of Cheshire Peaks & Plains Housing Trust Limited (Peaks and Plains) from G3 to G2 and confirms its V1 rating for sustainability.

The regulator now has assurance that the governance arrangements of Peaks and Plains are helping the organization achieve its goals. However, Peaks and Plains still needs to improve some aspects of its governance to support ongoing compliance.

The regulator’s previous assessment in March 2020 concluded, following a self-referral from Peaks and Plains, that the supplier had not managed its affairs with an appropriate degree of competence, independence, diligence, efficiency, prudence and foresight. There were significant weaknesses in risk management and internal controls that resulted in a violation of loan covenants and a violation of the Home Standard. The latter was the subject of a regulatory notice in December 2019.

Since March 2020, Peaks and Plains has strengthened its governance arrangements by renewing its board of directors and management. This has improved the review and oversight of key risks. Peaks and Plains identified other opportunities to clarify the relationship between the board and committees in order to allow the board to operate at a more strategic level.

The supplier has also reviewed and strengthened its approach to risk management, including its internal controls. It developed and operationalized a new risk management framework and subsequently obtained independent assurance as to the effectiveness of its approach. Peaks and Plains can now be confident that key risks are being managed effectively, but more work is needed to continue to strengthen certain aspects of the reporting and establish the changes that have been made.

The regulator’s assessment of Peaks and Plains’ compliance with the financial sustainability elements of the governance and financial sustainability standard remains unchanged. Based on the evidence obtained during a stability check, the regulator is confident that Peaks and Plains’ financial plans are in line with and support its financial strategy. The supplier has an adequately funded business plan, sufficient security in place and is expected to continue to meet its financial commitments under a wide range of adverse scenarios.

Other providers included in the judgment

Nothing

About the supplier

Origins

Peaks and Plains was formed in July 2006 following a transfer of shares from Macclesfield City Council. It is a charitable cooperative and a public utility company. Its main activity is the management and maintenance of social housing.

Registered entities

Peaks and Plains is the only registered entity of the group.

Unregistered entities

Peaks and Plains has two unregistered subsidiaries, Peaks & Plains Devco Limited and Peaks & Plains Tradeco Limited which is currently dormant.

Geographic distribution and scale

Peaks and Plains owns and operates approximately 5,200 homes in Cheshire and Derbyshire.

Staffing and turnover

Peaks and Plains employs 174 people. Its revenue for the year ended March 31, 2021 was £ 28.4 million.

Development

Peaks and Plains’ strategy is to develop a total of approximately 210 homes between 2021 and 2026.

About our judgments

Notes key

Governance :

  • G1 (Compliant): The supplier meets our governance requirements.
  • G2 (Compliant): Supplier meets our governance requirements, but needs to improve aspects of their governance arrangements to ensure continued compliance.
  • G3 (non-compliant): The supplier does not meet our governance requirements. There are serious regulatory issues and, in agreement with us, the supplier is working to improve their position.
  • G4 (non-compliant): The supplier does not meet our governance requirements. There are serious regulatory issues and the supplier is subject to regulatory intervention or enforcement action.

Viability:

  • V1 (Compliant): The supplier meets our viability requirements and has the financial capacity to cope with a wide range of adverse scenarios.
  • V2 (Compliant): The supplier meets our viability requirements. It has the financial capacity to cope with a reasonable range of adverse scenarios, but must manage significant risks to ensure continued compliance.
  • V3 (Non Compliant): The supplier does not meet our viability requirements. There are serious regulatory issues and, in agreement with us, the supplier is working to improve their position.
  • V4 (Non Compliant): The supplier does not meet our viability requirements. There are serious regulatory issues and the supplier is subject to regulatory intervention or enforcement action.

Definitions of regulatory processes

Comprehensive Assessment (IDA): An IDA is a tailored assessment of a vendor’s viability and governance, including its approach to value for money. It involves on-site work and examines in detail a supplier’s ability to meet its financial obligations and the effectiveness of its governance structures and processes.

Stability checks: Based primarily on information provided by regulatory statements, a stability check is an annual review of a supplier’s financial position and its latest business plan. The purpose of the review is to determine whether there is evidence that a supplier’s current judgments warrant reconsideration.

Reactive engagement: Reactive engagement is unplanned work that is triggered by new information or a developing situation that may have implications for a vendor’s current regulatory judgment.

Stability checks and reactive engagement: In some cases, we will publish narrative regulatory judgments that combine evidence obtained from both stability checks and reactive engagement.

For more details on these processes, please see “Regulation of Standards”.

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