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Clauses 100 and 101 - Accounts and Financial year
194. Clause 100 sets out provisions for ensuring that the regulator maintains and publishes its accounts, the form of which will be directed by the Secretary of State. These accounts are to be sent to the Secretary of State and the Comptroller and Auditor General. Clause 101 deals with the definition of the regulator's financial year.
Relationship with other bodies
Clause 102 - Co-operation with the HCA
195. Subsection (1) requires the regulator to co-operate with the HCA.
196. Subsection (2) requires the regulator to consult the HCA on matters likely to interest it.
Clause 103 - Direction to the HCA
197. This clause gives the regulator a power to direct the HCA not to give financial assistance to a specified registered provider. The regulator's direction is only in respect of the HCA's power to give financial assistance under section 23, and only where the purpose of that financial assistance is in connection with social housing.
198. The purpose of this power is to prevent financial assistance from being given to a registered provider where there are serious concerns about mismanagement or about the viability of the organisation. This power is to be used in the most serious interventions by the regulator, as described in subsection (2):
- the regulator has decided to hold an inquiry into affairs of the registered provider under clause 183 (and the inquiry is not concluded),
- the regulator has received notice in respect of the registered provider under clause 137 (moratorium), or
- the regulator has appointed an officer of the registered provider under clause 233 (and the person appointed has not vacated office).
199. Subsection (3) states that a direction may prohibit the HCA from giving assistance of a specified kind (whether or not in pursuance of a decision already taken and communicated to the registered provider). This means that the regulator could prohibit some forms of financial assistance but not others. It also means that the regulator could prohibit financial assistance even where, for example, a funding agreement is already in place.
200. Subsection (4) states that a direction shall have effect until withdrawn.
Information
Clause 104 - Collection
201. Clause 104 gives the regulator, for the purposes connected with its functions, the power to require documents or information from any person about the financial or other affairs of registered providers or the activities of a registered provider or a person who has applied to become a registered provider.
202. The regulator will wish to require routine data and regulatory information from all registered providers periodically to help it determine where intervention may be needed. It may also wish to follow up information provided by tenants, local authorities or others about poor performance by asking for specific information from the provider.
203. Subsection (2) makes it clear that in the case of for-profit registered providers, these powers relate only to their affairs and activities concerning the provision of social housing. This is because for-profit registered providers, unlike non-profit providers, are likely to have significant interests outside the provision of social housing, with which the regulator is not normally concerned.
204. Subsection (3) specifies that the regulator must make requests for information under this power in writing specifying the form and manner in which it is to be provided and when and where it is to be provided.
205. Subsection (4) permits the regulator to copy or record the documents or information required by him under this clause.
206. Subsection (5) specifies that it will be an offence to fail to comply with a request for information made by the regulator under this power unless the provider has a reasonable excuse. Subsection (3) of clause 105 provides that a person guilty of this offence is liable on summary conviction to a fine up to level 5 (currently £5000) on the standard scale.
207. Subsection (6) further specifies that it will also be an offence intentionally to alter, suppress or destroy information or documents to which a request for information by the regulator under this clause relates. Subsection (4) of clause 104 provides that a person guilty of this offence is liable either on summary conviction to a fine up to the statutory maximum (currently £5000), or on conviction on indictment to imprisonment for a term of no more than 2 years, or a fine, or both.
208. Subsection (7) provides that if a person who has been required to provide information by the regulator under this power fails to comply, then the regulator may apply to the High Court for an order to remedy that person's failure to provide the information required. Subsection (5) of clause 105 provides that such an order may include a provision for costs.
Clause 105 - Section 104: supplemental
209. Subsection (1) of clause 105 limits the power to require information in clause 104 such that a regulator's requirement for information cannot extend to a requirement that if it were High Court proceedings the person would be entitled to refuse to disclose on the grounds of legal professional privilege.
210. Similarly subsection (2) specifies that a requirement for information does not require a banker to breach a duty of confidentiality owed to a person other than a registered provider or the subsidiary or associate of a registered provider.
Clause 106 - Disclosure
211. Clause 106 governs the way in which information may be disclosed to and disclosed by the regulator in certain circumstances.
212. Subsection (1) provides that a public authority may disclose information to the regulator provided that it is for a purpose connected with the regulator's functions. Subsection (6) defines a "public authority" as a person with functions of a public nature, without restriction as to the location where those functions are carried out.
213. Subsection (2) provides for the regulator to disclose information to a public authority (as defined in subsection (6)) for any purpose that is either connected with the regulator's own function, or with the functions of the public authority to which the information is disclosed.
214. Subsections (3) to (5) provide that such disclosures may be subject to restrictions on further disclosure and that any disclosure in contravention of such a restriction is an offence. A person who is guilty of this offence will be liable on conviction to a fine not exceeding level 3 (currently £1000) on the standard scale.
Chapter 3 - Registration
Introduction
Clause 107 - Overview
215. This clause describes the purpose of this Chapter which is to establish a register of providers of social housing.
Clause 108 - The register
216. Subsection (1) of clause 108 requires the regulator to keep a register of persons providing social housing. Only those persons on the register will be subject to regulation by the social housing regulator. This duplicates the current requirement on the Housing Corporation under section 1 of the 1996 Act.
217. Subsection (2) of clause 108 requires the regulator to make the register publicly available. This replaces the more restrictive provision in section 1(1) of the 1996 Act that the register is made available at reasonable times at the Housing Corporation's head office.
Eligibility
Clause 109 - Eligibility for registration
218. Subsection (1) of clause 109 indicates that an English body is eligible for registration if it satisfies the conditions of this clause, and does not fall within the exceptions specified in clause 110. "English body" is defined in clause 78.
219. This clause removes the restrictions that applied under section 2 of the 1996 Act on the constitutional form and objectives of RSLs in England, but which continue to apply in respect of Welsh bodies.
220. Registration is not compulsory for persons that provide social housing as defined by clause 67.
221. Subsection (2) requires that a body must be a provider of social housing in England, or intend to become one as a condition of registration.
222. Subsection (3) makes it a condition that the regulator thinks that the social housing provided by the body is only or mainly in England, or will be so. Subsection (4) specifies that if a body has been registered in reliance on the condition in subsection (3), it may remain registered even though it does not meet that condition.
223. Subsection (5) requires that the body must satisfy any relevant criteria that have been set by the regulator in respect of:
- other arrangements for its management.
224. Subsection (6) requires that before the regulator sets any criteria for eligibility for registration, the regulator must consult:
- bodies representative of the interests of registered providers, and
- bodies representative of the interests of tenants.
Clause 110 - Local authority non-registrable bodies
225. Subsection (1) says that this clause sets out the exceptions to clause 109.
226. Subsection (2) specifies that local housing authorities, as defined in section 1 of the Housing Act 1985, are not eligible for registration.
227. Subsection (3) specifies that county councils are not eligible for registration.
228. Subsection (4) specifies that a person controlled by an authority that is within the meaning of either subsections (2) or (3) is not eligible for registration.
229. Subsection (5) gives the Secretary of State the power to make regulations prescribing classes of person who are or are not to be treated as being eligible to be a registered provider of social housing under subsection (4).
Clause 111 - Profit-making and non-profit organisations
230. Subsection (1) of this clause provides that the register kept under clause 108 must designate each registered person as either a non-profit organisation or a profit-making organisation. The restriction in section 2(2) of the 1996 Act that requires RSLs to be non-profit making is not replicated.
231. Subsections (2) to (6) define what is a non-profit organisation.
232. Subsection (2) specifies a registered or non-registrable charity as a non-profit organisation.
233. Subsection (3) specifies that a body is also a non-profit organisation if it meets the conditions specified in subsections (4) to (6). These conditions are-
- that it does not trade for profit or that its constitution prohibits it from issuing capital with interest or dividend in excess of the specified rate (this condition
re-enacts the definition of non-profit organisation in section 2(3) of the 1996 Act); and
- a purpose of the body is the provision or management of housing; and
- any other purposes of the body are connected with or incidental to the provision of housing.
234. Subsection (7) gives the Secretary of State the power to make regulations providing that a specified purpose is, or is not, connected with or incidental to the provision of housing.
235. Subsection (8) defines a profit-making organisation as any organisation which is not a non-profit organisation.
236. These definitions are the basis on which the regulator will make the designation in the register provided for in subsection (1).
237. Subsection (9) requires the regulator to change the designation in the register where a profit-making organisation becomes a non-profit organisation as defined in this clause.
Procedure
Clause 112 - Entry
238. Subsection (1) of this clause provides that the regulator shall register any person who is eligible for registration as defined in clause 109 and who applies to the regulator to be registered.
239. Subsection (2) gives the regulator the power to specify how an application should be made, including the form it should take, what information it should contain, and how it should be submitted. The regulator can also specify what will happen if an applicant for registration fails to comply with the regulator's requirements under this subsection.
240. Subsection (3) specifies that this clause is subject to clause 113 (fees).
241. Subsection (4) provides that once a body has been registered, it will remain registered unless and until it is removed under the provisions of clause 114 or 115.
242. Subsection (5) specifies that a person entered in the register is to be presumed for all purposes to be eligible for registration while they remain on the register, regardless of whether or not they are later removed from the register, and the reason for that removal.
Clause 113 - Fees
243. This clause gives the regulator the power to set fees for registration. The regulator may make the initial registration under clause 112 conditional on payment of a fee, and may make continued registration conditional upon payment of annual fees.
244. Subsection (3) gives the regulator the power to set the amount of the fee to be charged under this clause, and to make provisions for the arrangements for annual fees, both when they are paid, and in respect of which period.
245. Subsection (4) gives the regulator the power to set fees on a differential basis according to different cases or circumstances. For example, the regulator may, if it chooses, set a variable fee scale according to the number of homes owned, or relate it to the amount of income a provider receives in an annual period.
246. Subsection (5) provides that fees will be set in accordance with principles which aim to ensure that so far bas is reasonably practicable -
a) aggregate fee income the regulator receives matches the amount of expenditure it incurs in performing its functions.
b) each fee is reasonable and proportionate to the costs to which it relates, and
c) actual or potential registered providers can see the relationship between the amount of a fee and the costs to which it relates.
247. Subsection (6) specifies that the principles for setting fees may provide for specified or potential expenditure under clause 94 (financial assistance) to be disregarded.
248. Subsection (7) specifies that in preparing the principles, the regulator shall consult the Secretary of State and persons representing the interests of fee-payers.
249. Subsection (8) specifies that the regulator's accounts shall show both fees received and fees outstanding.
Clause 114 - De-registration: compulsory
250. Subsection (1) gives the regulator the power to remove a body from the register, if it thinks that-
- it is no longer eligible (as provided for in clauses 109 and 110)
- it has ceased to carry out activities, or
251. Subsection (2) requires the regulator in the cases of subsection (1)(a) or (b) to take all reasonable steps to give the body it proposes to de-register 14 days' notice of its action, and to consider any representations that the body may make during that period.
Clause 115 - De-registration: voluntary
252. Subsection (1) allows registered providers to ask the regulator to remove them from the register.
253. Subsection (2) gives the regulator the power to comply with a request under subsection (1) where one or more of the specified conditions applies as follows:
- the registered provider no longer is, or does not intend to continue to be a provider of social housing in England
- the registered provider is subject to regulation by another authority whose control the regulator believes to be sufficient, or
- other grounds that the regulator believes to be sufficient to justify deregistration.
254. Subsection (3) requires the regulator to consult any local authority (as defined in the Housing Associations Act 1985) in whose area the registered provider carries out its activities before deciding whether or not to comply with a request under subsection (1).
255. Subsection (4) provides that, once the regulator has decided whether or not to comply with a request under subsection (1) it must notify both the registered provider that has made the request, and any authority that it has consulted under subsection (3).
Clause 116 - Notice
256. This clause requires the regulator to take certain actions as soon as reasonably possible after it has registered or deregistered a body. These actions are to notify other registrars who have related duties or powers depending on the constitutional form of the body that the regulator has registered or de-registered. Therefore, the regulator notifies:
- the Charity Commission, if the registered provider is a registered charity,
- the Financial Services Authority, if the registered provider is an industrial and provident society,
- the registrar of companies for England and Wales, if the registered provider is a registered company.
257. Subsection (2) provides that in notifying these bodies, the regulator will advise whether the body has been registered with a profit-making or non-profit designation under clause 111(1).
258. Subsection (3) provides that if the regulator changes the designation under clause 111(8), the regulator will also advise the relevant bodies.
259. Subsection (4) provides that a person to whom notice is given by the regulator under this clause must keep a record of that notice.
Clause 117 - Appeal
260. Subsection (1) gives a body the right of appeal to the High Court against a decision of the regulator:
- to refuse to register that body
- to deregister that provider
- to refuse to deregister that provider.
261. Subsection (2) prohibits the regulator from deregistering a body while an appeal to the High Court is pending.
Chapter 4 - Registered providers
General provisions
Clause 118 - Payments to members etc.
262. This clause derives from paragraph 1 of Part 1 of Schedule 1 to the 1996 Act.
263. Subsection (1) restricts the making of gifts and the payment of dividends and bonuses by a non-profit registered provider to -
- a member or former member of the registered provider,
- a member of the family of a member or former member,
- a company which has as a director such a person.
264. Subsection (2) states that gifts may only be made, or dividends of bonuses paid if it falls within the three classes defined in subsections (3) to (5).
265. Subsections (3) to (5) directly replace paragraphs 1(2)(a) to (c) of the Part mentioned above.
266. Subsection (6) states that if a registered company or industrial and provident society contravenes this section -
- it may recover the wrongful gift or payment as a debt from the recipient; and
- the regulator may require it to take action to recover the gift or payment.
Clause 119 - Disposal of property
267. This clause cross-refers to the provisions in Chapter 5 (disposal of property).
Clause 120 - Complaints
268. This clause specifies that the Housing Ombudsman schemes, as established by section 51 of, and Schedule 2 to the 1996 Act, continue to have effect, with the consequential amendments specified.
Clause 121 - Voluntary undertaking
269. This clause sets out the nature of voluntary undertakings made to the regulator by registered providers.
270. A registered provider may make an undertaking in respect of any matter concerning social housing.
271. The regulator must have regard to any undertaking made in this way by a registered provider when exercising a power under Chapters 6 or 7 of this Part of the Bill. The regulator may also take into account the extent to which undertakings having been made in this way by a registered provider, have been honoured by the provider, when deciding whether to exercise powers under Chapters 6 or 7.
272. The purpose of this provision is to enable registered providers to formally notify the regulator of actions that they propose to take, and believe are necessary to ensure that their affairs are managed in accordance with the standards set by the regulator under clauses 173 and 174. It provides a mechanism by which such commitments can be brought to the attention of the regulator, and require the regulator to take account of those undertakings when determining whether to investigate the performance of providers, and to take enforcement action where providers have not complied with regulatory requirements.
Clause 122 - Sustainable community strategies
273. This clause specifies that a registered provider must co-operate with a local authority if invited to participate in the preparation or modification of a sustainable community strategy under section 4 of the Local Government Act 2000.
Accounts
274. Clauses 123 to 134 broadly replicate the powers of the Housing Corporation in Part III of Schedule 1 to the 1996 Act (as amended by paragraphs 17 to 23 of Schedule 11 to the Housing Act 2004). These powers are conferred on the regulator.
These powers relate to the accounting requirements for non-profit registered providers of social housing.
Clause 123 - Directions
275. Subsections (1) and (2) give the regulator the power to give directions to non-profit registered providers about the preparation of accounts for the purpose of ensuring that accounts are prepared in a proper form and that they present a true and fair view of a registered provider's state of affairs as far as it concerns social housing, including its present and past social housing assets and funds. This replaces paragraph 16(1) of Schedule 1 to the 1996 Act.
276. Subsection (3) provides that a direction may provide specifically for how registered providers that are charities should distinguish in their accounts between social housing activities and other matters. This replaces paragraph 16(2) of Schedule 1 to the 1996 Act.
277. Subsection (4) provides that directions under this power may make general provisions, or provisions specific to particular cases, and that provisions may vary according to different cases or types of provider.
278. Subsection (5) provides that where directions relate to more than one provider, those directions must first be consulted on by the regulator with bodies appearing to represent the interests of registered providers, and require the Secretary of State's consent. In such case, subsection (6) requires the regulator to make arrangements to ensure that providers to whom the directions apply are made aware of their requirements.
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