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Select Committee on Public Accounts Minutes of Evidence


APPENDIX 1

Supplementary memorandum submitted by Housing Corporation (Pac 00-01/174)

Question 21

  An analysis by type, size and region of those RSLs who are failing to submit their annual accounts on time:

  RSLs are required to furnish to the Corporation a copy of their accounts and auditor's report within 6 months of the end of the period to which they relate (para. 16(5) Part III, Schedule 1, Housing Act 1996).

  Accounts for financial years ending October 1998 to September 1999 for which the required date for submission fell between 1 April 1999 and 31 March 2000:

Accounts due
2,104
Received by the required date (ie within 6 months of the end of the accounting period)
1,406 (67%)
Received within 6 months of the required date (ie within 12 months of the end of the accounting period)
2,065 (98%)

Analysis by size:

  Of the 698 RSLs which failed to submit accounts by the required date:

Less than 100 units in management
77 per cent
100-250 units in management
7 per cent
250-1,000 units in management
8 per cent
Over 1,000 units in management
8 per cent

  In all 84 per cent of RSLs submitting late accounts had less than 250 units in management.

Analysis by type:

  Of the 698 RSLs which failed to submit accounts by the required date:

29 per cent were Almshouses
27 per cent were mainstream RSLs providing housing for letting and/or hostel accommodation
19 per cent were Co-operatives
15 per cent were Abbeyfields
3 per cent were Co-ownerships
2 per cent were YMCAs/YWCAs
2 per cent were Large Scale Voluntary Transfers (LSVTs)
2 per cent were RSLs providing housing for sale or lease (of which nearly half then had no stock)
1 per cent were recently registered non-asset holding parent bodies

  Of the 698 RSLs above 224 (32 per cent) submitted their accounts within 7 days of the deadline. The vast majority of RSLs with more than 250 units came into this category.

Analysis by region

  Of the 698 RSLs which failed to submit accounts by the required date:

  
London
South East
South West
East Midlan7ds
West Midlands
North East
North West
Merseyside
  
%
%
%
%
%
%
%
%
Almshouses
14
34
42
43
28
61
19
3
Mainstream RSLs
30
28
17
30
34
24
29
28
Co-operatives
42
5
4
2
8
4
9
40
Abbeyfields
6
27
24
19
11
6
28
10
Co-ownerships
2
2
3
11
3
13
YMCAs/YWCAs
2
2
3
6
3
3
3
LSVTs
2
7
1
1
9
3
RSLs providing
  
  
  
  
  
  
  
  
housing for sale or lease
2
2
4
1
3


Question 22

Record of RSLs taken to court for late submission of accounts, and what fines were imposed.

  The Corporation has the power to prosecute registered social landlords for failing to submit accounts within six months of the financial year end, or for failure to comply with the accounting requirements (paragraph 19 of Schedule 1 to the Housing Act 1996). Fines not exceeding level 3 on the standard scale may be imposed by the Magistrates Courts.

  However, experience shows that this is neither an efficient nor effective means of dealing with recalcitrant RSLs (most are able to show that they have done everything they can to comply with the law, which is a defence to such a prosecution, and that the delay is caused by accountants/auditors). In the two years 1993 and 1994 the Corporation pursued five such prosecutions and four RSLs received fines ranging from £100 to £500 (as against a possible maximum of £1,000). The process was time consuming, yet minimal costs orders were made. Most importantly, however, the Corporation still received no accounts. As a consequence, this remedy has not been pursued other than in exceptional circumstances.

  An alternative redress, which would require primary legislation, would be for the High Court to have jurisdiction to make such orders as it thinks fit in order to remedy the default, as it has for failure to respond to a notice requiring other types of information (Section 32(4) of the 1996 Act).

Housing Corporation

24 May 2001


 
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