Engagement plan from 31 March 2022 to 30 March 2023

Landlord name

River Clyde Homes

Publication date

31 March 2022

Regulatory status


The RSL meets regulatory requirements, including the Standards of Governance and Financial Management.

Why we are engaging with River Clyde Homes

We are engaging with River Clyde Homes about its governance, stock quality, financial management, development plans, and because it is a systemically important landlord.

We refer to a small number of RSLs as systemically important because of their stock size, turnover or level of debt or because of their significance within their area of operation.  We need to maintain a comprehensive understanding of how their business models operate, and how they manage the risks they face and the impact these may have.  So we seek some additional assurance each year through our engagement plans.  Given River Clyde Homes’ size we consider it to be systemically important.

We engaged with River Clyde Homes about a potential breach of its Entitlements, Payment and Benefits Policy and consequently compliance with the Regulatory Standards of Governance and Financial Management (the Regulatory Standards).  River Clyde Homes considered this and acknowledged it did not comply with the terms of this policy.  It is taking prompt and appropriate action to address this matter, it has developed an action plan which includes commissioning an independent review of its policies.  River Clyde Homes is engaging openly and constructively with us and has committed to reporting its progress to us.

River Clyde Homes reported a significant level of its stock failing to meet the Scottish Housing Quality Standard (SHQS) in its 2020/2021 Annual Return on the Charter (ARC).  Following SHQS guidance published in September 2021 River Clyde Homes reviewed compliance and there was a further reduction in compliance.  It is now carrying out a data migration process, cleansing data and updating the investment works it has undertaken and it believes that this will lead to an increase in compliance.  We will engage further with River Clyde Homes to better understand compliance with the SHQS.

River Clyde Homes is in the process of undertaking a scheduled refinancing to support its housing investment programme.

River Clyde Homes is one of the larger developers of new affordable housing in Scotland.  It has received significant public subsidy to help deliver its new build programme, which is scheduled for completion during the summer 2022.

What River Clyde Homes must do

River Clyde Homes must:

  • send us copies of its Board and audit committee minutes as they become available;
  • report progress to us on its action plan to address matters arising from its review of the implementation of its Entitlements, Payment and Benefits Policy;
  • provide us with further information on the details of SHQS failures;
  • send us by 30 April 2022:
    • its approved business plan and updated risk register;
    • 30 year financial projections consisting of statement of comprehensive income, statement of financial position and statement of cash flow complete with assumptions and explanatory narrative;
    • a comparison of projected financial loan covenants against current covenant requirements;
    • financial sensitivity analysis which considers the key risks, the mitigation strategies for these risks and a comparison of the resulting covenant calculations with the actual current covenant requirements;
    • the report to the Board in respect of the approved 30 year projections, sensitivity analysis and covenant compliance;
    • evidence of how it demonstrates affordability for its tenants;
  • send us an update on its development programme by 31 October 2022. This will include details of the scale and tenure mix, timescales for delivery and any material delays or changes to the programme; and
  • tell us if there are any material adverse changes to its development plans which might affect its financial position or reputation, in line with our notifiable events guidance.

What we will do

We will:

  • review the minutes of the Board and audit committee meetings and liaise as necessary;
  • liaise as necessary with River Clyde Homes regarding its action plan to address matters arising from the review of the implementation of its Entitlements, Payments and Benefits Policy and compliance with the Regulatory Standards;
  • review the information River Clyde Homes provide us on SHQS failures and meet to discuss this as necessary;
  • review the business plan and financial projections;
  • meet with River Clyde Homes to discuss the business plan, the financial information and any risks to the organisation;
  • review the development update and engage as necessary; and
  • update our published engagement plan in light of any material change to our planned engagement with River Clyde Homes.

Regulatory returns

River Clyde Homes must provide us with the following annual regulatory returns and alert us to notifiable events as appropriate:

  • Annual Assurance Statement;
  • audited financial statements and external auditor’s management letter;
  • loan portfolio return;
  • five year financial projections; and
  • Annual Return on the Charter.

It should also notify us of any material changes to its Annual Assurance Statement, and any tenant and resident safety matter which has been reported to or is being investigated by the Health and Safety Executive or reports from regulatory or statutory authorities or insurance providers, relating to safety concerns.

Our lead officer for River Clyde Homes is:

Stephen Lalley

Regulation Manager