5.Memorandum from the Housing Corporation
OVERVIEW
1. This section provides background information
on the origins, status and regulation of housing associations
for the Joint Committee on Human Rights. It provides the context
for the Housing Corporation's response to the questions which
the Committee is currently considering.
2. The Housing Corporation regulates Registered
Social Landlords. Registered Social Landlord (RSL) is the technical
name for social landlords that are registered with the Housing
Corporation—most are housing associations, but there are
also trusts, co-operatives and companies. Housing associations
are run as businesses but they do not trade for profit. We refer
throughout this document to housing associations.
3. Housing associations as a group have
been in existence for decades (centuries in the case of almshouses).
They were not originally established to perform public functions
as the Human Rights Act (HRA) conceives, but primarily as an act
of private individuals or groups of individuals of a charitable
nature. The activities of associations have primarily been, and
continue to be, the provision of social housing for those who
are unable to meet their own housing needs in the open market.
4. This model of provision of housing in
the interests of these groups has been very successful, both for
those who benefit from that provision (at March 2002, associations
owned or managed over 1.4 million homes), and for the sector itself
which develops and manages homes independently of the state, although
some associations benefit from public subsidy and all associations
registered with the Housing Corporation have to comply with its
regulatory framework. The sector has a low rate of organisational
failure.
5. Since the Housing Act 1988, the sector
has expanded rapidly in terms of the number of homes owned or
managed. This is a result of the use of a mixed public/private
funding regime to support the development of new social housing,
and through the transfer of local authority housing to new stock
transfer landlords which are registered housing associations.
6. The mixed funding regime is administered
by the Housing Corporation, and enables public funding (through
the Approved Development Programme) for new social housing for
associations registered with the Corporation to be combined with
private borrowing. This private finance does not count as public
sector borrowing.
7. The transfer of local authority housing
stock to new housing associations has normally also been financed
by private sector borrowing, which has funded both the purchase
of the stock from the local authority, and the subsequent programmes
of investment in its maintenance.
8. The sector has developed a successful
model for delivering services to those groups in society which
associations were established to serve. By virtue of their independence,
the sector has been able to respond in innovative and flexible
ways to meet the changing needs of their client groups, and developments
in the social policy of various governments. This innovation is
circumscribed by a regulatory regime which has also evolved to
reflect the changing characteristics of the sector, without interfering
with the independence of associations to conduct their own affairs
in an orderly manner.
9. Regulation of housing associations is
a relatively recent state sponsored activity (compared with the
historic origins of the sector). Its scope and objectives are
set out in primary legislation. The essence of the Housing Corporation's
regulatory regime is to ensure, for example, that housing associations,
registered with the Housing Corporation, deliver their constitutional
purposes, which must be consistent with the permissible purposes
of registered housing associations as set out in Housing Act 1996.
10. Our regulatory relationship with associations
is intended to ensure that governing bodies of associations are
responsible for the management of their associations' affairs
in accordance with the law and regulatory requirements.
11. The Corporation is clear in its view
that, the sector is independent of the state in its origin, is
responsible for its own performance and management, and that the
sector's effective operation and delivery of its purposes is contingent
on preservation and promotion of its independence from the state.
12. Given the nature of their activities
(which are often charitable in nature), it is relatively common
that housing associations will, in the course of carrying out
their business, assist public bodies in discharging their functions.
Given that most have the objective of housing those groups in
society who are less able to meet their housing needs through
the open market, this will particularly be the case in assisting
local authorities in the discharge of their statutory duties under
homelessness legislation.
APPROACH TO
PRODUCING REGULATORY
GUIDANCE FOR
HOUSING ASSOCIATIONS
13. The Housing Corporation published "The
Way Forward: Our Approach to Regulation" in 2002. This
includes our regulatory requirements of housing associations in
what is called the Regulatory Code and Guidance.
14. The approach adopted in the Regulatory
Code is consistent with our view of the independence of the sector
and that regulation should set outcomes for the sector, and not
define in detail how associations should manage their business.
15. The Code requires associations to comply
with the law, but does not reproduce detailed statutory requirements.
16. Our approach to providing information
is to underpin the regulatory requirements of the Code with good
practice disseminated primarily through a web based Bank of Good
Practice.
17. The sections of the Regulatory Code
which are most likely to be relevant to the provisions of the
Human Rights Act are set out separately at Annex 1.
18. We do not currently have plans to produce
specific guidance in relation to the implications of the Human
Rights Act for the sector. We also do not have plans to recast
existing regulatory guidance to make specific reference to the
Human Rights Act.
19. If we were to produce such guidance,
we would first wish to consider:
(a) the extent to which existing regulatory
requirements and good practice, particularly in relation to the
rights of housing association tenants, would, if properly and
thoroughly enacted by associations, where they are considered
to be public authorities (under HRA definition) provide evidence
of protection of human rights (as opposed to reworking existing
regulation to make explicit the HRA obligations of housing associations).
(b) what purpose the guidance would
serve, and whether it is consistent with or enhances our current
approach to providing guidance and information to housing associations.
INQUIRY QUESTIONS
In our view is the meaning of public authority
under the Human Rights Act, as interpreted by the courts, the
right one?
20. Yes:
— from our perspective, we do not believe
that it is reasonable that the nature or legal status of a long
established sector should be fundamentally changed in order to
address perceived or actual shortcomings in a separate piece of
legislation;
— to bring private or voluntary sector
bodies within the scope of public body definition beyond that
described in the cases at issue would have potentially far reaching
effects on the framework and funding mechanisms of a wide range
of public sector provision. It would, in our view, also be disproportionate,
and damaging to a sector which is generally recognised as being
successful in delivering services to disadvantaged sections of
the community, and which does not distribute surpluses from its
activities, but instead reinvests those surpluses in developing
its services.
What, in practice, might be expected to be
the impact of the definition of public authority applied by the
courts for the protection of human rights?
21. Dependent upon the particular circumstances
of any given case, and the arrangements which public bodies make
for the provision of public services, users of those services
may have to seek redress for breaches of their human rights from
organisations (public bodies) other than those which may be directly
responsible for the breach. This is the clear conclusion to be
drawn from the Court of Appeal's decision in the Leonard Cheshire
case.
What steps, if any, should be taken to address
any potential gaps in Human Rights Act protection and accountability,
following the Leonard Cheshire case?
22. In deeming that the Leonard Cheshire
Foundation (LCF) was not a public authority, the Court of Appeal
was not extinguishing the human rights of the appellants. Lord
Chief Justice Woolf stated that the LCF was not "standing
in the shoes of the local authority", and so the local authority
retained an obligation under Article 8 of the Convention to the
appellants. In other words, the Court simply directed them back
to the public authority which was legally responsible for the
provision of the services, regardless of how it chose to deliver
them. We think that this is a clear and reasonable approach. It
is, in our view, consistent with primary legislation which sets
out the responsibilities and obligations of public authorities
which can be used as the basis for pursuing claims for breaches
of human rights.
What alternative means, apart from 6(3)(b),
such as contractual terms, could effectively fill any potential
gaps in human right protection?
23. We think that the range of activities
undertaken by associations which may be public in nature is relatively
limited. In any given instance, it would be for a court to determine
on the particular facts of the case, but such activities may include:
— lettings and homelessness; where
local authority responsibilities have been contractually delegated
to associations, particularly stock transfer associations (as
opposed to provision of assistance under the Regulatory Code requirement
noted in Annex 1);
— private Finance Initiative (PFI)
contracts with local authorities to deliver services funded from
local authority Housing Revenue Accounts;
— other PFI projects, or similar contractual
arrangements, with public bodies other than housing authorities,
including:
provision of registered residential care/nursing
provision of domiciliary care
provision of intermediate care (which would require
an extension of permissible purposes
under the Housing Act 1996, and would have to be
funded by health authorities, or the
Department of Health);
— provision of support and care under
Supporting People arrangements (formal contractual arrangements
with local authorities on a scheme by scheme basis);
— provision of technical/maintenance/development
services under contract to housing authorities (and other public
bodies, eg under PFI).
24. The essence of each of these is that
a formal contractual agreement exists which delegates activities
which may be public in nature (it would be for courts to determine
in any given instance), rather than, eg in the case of lettings,
a regulatory requirement to generally assist local authorities
in the discharge of their duties.
25. We believe that the most effective way
of protecting individual service users' human rights is to ensure
that the terms of these arrangements are HRA compliant, rather
than to undermine the independent status of private sector providers
by bringing them within the definition of public body status under
the HRA.
26. This would be consistent with our Regulatory
Code requirements as noted above in relation to ensuring that
the rights and obligations of those who are party to legal arrangements
are made clear to them, including those who will use services
under contractual arrangements.
Annex 1
Relevant provisions of the Housing Corporation's
Regulatory Code
2.1 "Housing associations must operate
according to the law and their constitutions"
COMMENTS
We expect associations to comply with the law
generally. We generally expect associations to ensure that they
are aware of the law and take appropriate independent legal advice
to ensure that they fulfil this requirement. We do not act as
legal adviser or, in most cases, provide advice in particular
areas of statutory legislation. We may in certain cases draw associations'
attention to developments in law or government policy where they
may need to take legal advice to ensure that they comply with
the law.
2.3 "Housing associations must maintain
the highest standards of probity in all their dealings: . . .
only entering into relationships with other organisations when
the rights and obligations are clear to all"
COMMENTS
Our requirement is that associations maintain
these standards, and act in a reasonable and transparent way in
carrying out their purposes.
Where associations are entering into arrangements
such as those which have been the subject of case law, and which
the current inquiry of the Joint Committee is considering, we
would expect that associations take legal advice before entering
into such transactions so that they are clear of their obligations
under statutory legislation (including the Human Rights Act) and
under contract. We would also expect users of public services
under such arrangements to be provided with clear information,
generally by the public body responsible for the services, about
their rights (including, where appropriate, those set out in the
Human Rights Act). However, we have no locus in determining how
such public bodies should conduct their affairs.
"Housing associations must provide good
quality housing services for residents and prospective residents
. . . by offering the most secure form of tenure compatible with
the purpose of the housing and the sustainability of the community;
with agreements that clearly set out residents' and landlords'
rights and obligations . . . "
COMMENTS
This provision of the Code and the associated
guidance are long standing regulatory policy requirements of the
Corporation. As a principle, this regulatory requirement predates
the introduction of the Human Rights Act. It is a principle which
is at the heart of the original purposes of housing associations'
activities. It is our view that this long-standing principle is
entirely consistent with the Human Rights Act.
The fact that housing associations have this
as one of their core purposes illustrates the need for care in
how the role of private bodies is viewed by the courts. It would
be undesirable to erode the original voluntary purposes of housing
associations by directly or indirectly regulating them so as to
bring their activities any further within the definition of public
body functions.
3.6 "Housing associations must work
with local authorities to enable the latter to fulfil their duties,
to the homeless and people in priority housing need, and to the
vulnerable and those covered by the Government's Supporting People
policy"
COMMENTS
Where private or voluntary sector organisations,
in this instance housing associations, are generally required
to assist public bodies, we would view this as being a regulatory
requirement that exists in the public interest rather than because
it is a public body function. This is intended to:
— ensure that appropriate priority
is given to those in greatest need (confluence of public body
duties, and the charitable nature of housing associations' purposes);
— allow for housing associations to
exercise independence in the management of their business;
— minimise duplication of effort and
resource in managing access to scarce public benefit resources;
— ensure that assets provided with
the benefit of public sector financial assistance are used for
the purpose for which they were originally funded.
April 2003
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