RSH updates approach to grading for-profit providers over ‘qualitative difference’

The updated edition of Regulating the Standards says:

“[We] recognise that [for-profit] providers have different capital structures and cash flow dynamics and are often subsidiary organisations within a larger group of connected companies on which the for-profit provider depends to carry out its functions.

“While the provider may often contribute to the wider group strategy, it must meet the requirements of the regulatory standards. In such cases, the regulator recognises and wishes to be transparent with stakeholders about the fact that there is a qualitative difference from groups headed by non-profit providers.

“This in turn impacts on the nature of our judgement about the provider. Narrative regulatory judgements relating to for-profit providers include an explanatory statement to make it clear that our judgement concerns the registered provider only and does not represent an assessment of non-registered entities within the group or their ability to provide support to the registered provider, although we do take into account risks to the registered provider from its relationships with the wider group.”

The regulator said it would use an asterisk with a for-profit provider’s grade, such as G1*, to make it clear that the assessment refers to a for-profit provider.

Fiona MacGregor, chief executive of the RSH, said: “We are pleased to share our updated regulatory guidance with stakeholders, which sets out the way in which we will report our first in-depth assessments of for-profit providers.

“All providers are custodians of people’s homes and need to ensure those homes meet the needs of their tenants over the long term. It is vitally important that providers meet the standards that we, their tenants and stakeholders expect.”