7.Memorandum from The National Housing
Federation
KEY POINTS
— Housing associations' "non-public"
status is essential in allowing them to develop and improve affordable
housing; it would be put at risk by treating housing associations'
functions as being "of a public nature" for the purposes
of the Human Rights Act.
— We welcome the decision of the Court
of Appeal in the Leonard Cheshire case to define relatively
narrowly the concept of a "public function" for the
purposes of the Human Rights Act.
— The Leonard Cheshire decision
does not reduce claimants' rights under the Human Rights Act;
it simply places responsibility for those rights where it belongs,
in the public sector.
— State bodies should be encouraged
to respond to the Leonard Cheshire decision by writing
into their contracts with outside bodies an obligation to comply
with users' Convention rights.
1. INTRODUCTION
The National Housing Federation welcomes the
opportunity to submit evidence to the Joint Parliamentary Committee
on Human Rights. The Federation is the trade body for independent
social landlords (housing associations) in England. The Federation
has some 1,400 members, which operate on a non-profit basis and
provide between them some 1.5 million homes for people in housing
need.
2. THE IMPORTANCE
OF "PUBLIC
STATUS" ISSUES
2.1 The Joint Committee will understand
that "public status" is a very sensitive issue for housing
associations, with far-reaching ramifications. The implications
for their treatment under the Human Rights Act cannot be considered
in isolation from the wider issues.
2.2 On the proposition that registered social
landlords (RSLs) are not public bodies rest such important points
as their unamenability to judicial review (recently confirmed),
their exclusion from EU procurement rules, and their exclusion
from public sector borrowing rules. We point that RSLs are all
either companies, industrial and provident societies, or trusts,
none of which would normally be regarded as an emanation of the
state. Many were founded as a result of bequests or other private
gifts to provide housing for the needy and have operated ever
since on a voluntary non-profit basis, although they may have
accepted grants from the state if they help them further their
objectives. We are anxious to avoid any change that would jeopardise
the perception of RSLs as independent bodies.
2.3. One of these concerns stands out above
all. It has been a cornerstone of the housing policy of successive
Governments over the last fifteen years to encourage local authorities
to transfer their housing stock to housing associations. This
takes the housing outside the public sector so that loans may
be raised and spent without counting against central government
borrowing. This has allowed transfer landlords to undertake large
programmes of stock renewal and improvement from which many thousands
of tenants have benefited, work that could never have been carried
out had the housing remained in the public sector.
2.4 In addition, all housing associations,
whether or not they have been involved in stock transfer, are
free to raise and spend money without Treasury control. This means
they can fund improvement works and it has also allowed them to
complement Government funding with private borrowing, so they
have been able to develop far more housing than would have been
possible using Government grants alone.
2.5 By March 2002, private loan facilities
of some £26,028 million have been arranged by housing associations,
of which £19,813 million has been drawn down. It would not
have been possible to channel these vast sums into social housing
if associations were public bodies.
3. HOUSING ASSOCIATIONS,
TENANTS' RIGHTS,
AND THE
LEONARD CHESHIRE
RULING
3.1 As major social housing providers, Federation
members are closely concerned with tenants' legal rights. It is
important that the law should strike a fair balance, giving tenants
as much protection as is consistent with the objectives of the
housing, while allowing landlords to take effective action to
deal with breaches of tenancy.
3.2 We have had occasion recently to take
stock of our position on tenants' rights because of our involvement
with the Law Commission's comprehensive review of tenancy law,
which touched on the Human Rights Act at several points. As part
of this process, we developed five principles against which the
Law Commission's proposals should be tested:
— they should not jeopardise the independent
status of housing associations;
— they should equalise the duties on
and powers available to both housing associations and local authorities,
so far as is compatible with the first test;
— they should seek to promote stable
communities and sustainable tenancies;
— they should enable effective housing
management, including deterring anti-social behaviour and safeguarding
neighbours and the wider community;
— in addressing nuisance and anti-social
behaviour, they should be targeted at those who cause problems
and avoid stigmatising all tenants.
We suggest the same principles are helpful in
considering the application of the Human Rights Act.
3.3 In the light of these guiding principles,
our overall view is that housing associations, both as organisations
and in terms of their core functions, should not be regarded as
"public" for the purposes of the Human Rights Act.
3.4 For this reason we welcome the Court
of Appeal's decision in Leonard Cheshire. In particular,
we are encouraged by the Court's decision that the Leonard Cheshire
Foundation "manifestly" did not perform public functions.
Since the Human Rights Act was passed, many lawyers have argued
that the test for a function of a public nature is that responsibility
would pass to a public body if the function were not carried out
by a private body. In Leonard Cheshire, the Court of Appeal
decisively rejected that argument.
3.5 We do not think this should be seen
as a defeat or a setback for human rights advocates. The effect
of the Leonard Cheshire decision was not to deny the residents
their Convention rights. It was simply to focus the responsibility
for those rights in the appropriate quarter.
4. QUESTIONS
FOR ALL
RESPONDENTS
The Joint Committee has directed four questions
at all respondents. We reply to these as follows.
4.1 Is the meaning of "public authority"
under the Human Rights Act, as interpreted by the Courts, the
right one?
Obviously we are not in a position to judge
the merits of court decisions in legal terms but in terms of public
policy we think the Courts have, so far, struck approximately
the right balance. We are, however, concerned that there have
been a number of cases where the Courts have decided cases on
the basis that an association's actions would have been justified
under the Human Rights Act if the relevant function were "of
a public nature"; thus the case is resolved in the association's
favour but in a way that suggests that Convention rights are engaged.
We are also conscious that no case has yet come forward that addresses
explicitly the question of whether housing associations' core
functions are of "a public nature". We hope that when
such a case does arise it will be decided in the same way as Leonard
Cheshire.
4.2 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?
We hope that a relatively tight definition of
"public authority" will keep the focus of Convention
rights where it ought to be, on the state and its emanations,
and bodies that are discharging functions clearly on its behalf.
The references in the Convention to "public bodies"
and "functions of a public nature" are no accident;
they are a recognition of the unique position of the state by
reason of its financial and organisational resources, its accountability,
and its ability to coerce. The unique position of the state justifies
subjecting it to unique constraints.
This does not mean, of course, that private
individuals and organisations should be able to act just as they
please. They are constrained by certain Convention rights but
principally by the general law of the land. In the case of RSLs,
they are also subject to wide-ranging regulation by the Housing
Corporation. But they should not be subject to the special constraints
designed for the state; to do so would blur the focus of the Human
Rights Convention and deprive the use of the terms "public
body" and "public functions" of their meaning.
4.3 What steps, if any, should be taken
to address any potential gaps in Human Rights Act protection and
accountability, following the Leonard Cheshire case?
It is not clear at this stage whether any further
steps are necessary. The Leonard Cheshire case did not
say that the aggrieved residents' Convention rights had been extinguished.
On the contrary, it made it clear where they lay: that is, with
the local authority, which could discharge its duty by arrangement
with a private body, but could not delegate ultimate responsibility
for the way its duty was carried out. We submit this is the right
approach in policy terms. We hope it will be developed in future
rulings, so that public bodies understand that they cannot avoid
their responsibility to respect Convention rights by contracting
functions out.
4.4 Whether any alternative means, apart
from section 6(3)(b), (such as contractual terms) could effectively
fill any potential gaps in human rights protection?
If the Leonard Cheshire decision is sustained
and developed in future cases it is likely that public bodies
will deal with their continuing Convention liability by writing
into contracts clauses that, in effect, bind the contractor to
comply with the Convention. This is reasonable practice and should
be encouraged. It is likely that it will normally be the public
body that takes action against the contractor in the event of
any breach, but since such a contract is manifestly for the benefit
of third parties it may be possible for aggrieved service users
to take action against the contractor direct. Any legal action,
whether by the public body or the end user, should, however, be
clearly based on the contract, not on the Convention itself.
We do not favour the argument that the courts
themselves, being public bodies, have a responsibility to determine
private disputes to generate an outcome that would have been consistent
with the Convention had it applied to the actions of the parties.
Such an approach would have the effect of constraining private
bodies and individuals in a way the Convention does not intend.
It would, in effect, render meaningless the distinction between
public and private bodies, and the tighter constraints on the
former that the Convention is at such pains to lay down.
5. QUESTIONS
FOR THE
NATIONAL HOUSING
FEDERATION
Two further questions have been addressed specifically
to the National Housing Federation.
5.1 What proportion of publicly funded
local authority housing is provided by members of the National
Housing Federation, and by private and voluntary sector organisations
in general?
Virtually all housing associations of any size
are members of the Federation. The most recent figures (2002,
England only) are 2,685,243 homes owned or managed by local authorities
and 1,532,201 by housing associations; that is, housing associations
account for 36.3 per cent of the total social housing stock in
England. (For comparison, the total English housing stock in 2002,
all tenures, was 21,475,563.) Private and voluntary sector organisations
would not normally be publicly funded to provide housing. Many
charitable or benevolent organisations provide housing funded
from their own resources; we do not have any figures for this
but the total would be very small compared with local authority
or housing association provision.
5.2 Has the National Housing Federation
provided any advice or guidance to its members on the nature and
extent of their responsibilities under the Human Rights Act, following
recent cases on the definition of "public authority"
under the Act?
We have not issued any specific general guidance
in the light of recent cases. We routinely provide advice to individual
members at their request, and this sometimes touches on the Human
Rights Act. We issued guidance (copy attached) when the Act came
into force in 2000.
It is not generally our practice to lay down
standards of conduct for our members, except in general terms
that they should not bring the sector into disrepute. This is
because the great majority of our members are registered with
the Housing Corporation, which routinely issues regulations and
guidance covering the whole range of associations' activities.
If we attempted to take on this role it would lead to duplication,
and potentially it might bring us into conflict with the Corporation.
6. CONCLUSION
6.1 We understand that advocates of "public"
status for associations are motivated by a desire to equalise
tenants' rights, since obviously local authority decisions can
be challenged in court on Human Rights Act grounds. We agree that
equalisation of rights is desirable (see, for instance, our response
to the Law Commission's review of tenure, in which we advocate
a return to secure tenancies in the housing association sector),
but jeopardising our "non-public" status would be too
high a price to pay.
6.2 We would point out, moreover, that the
rights or RSL tenants are already protected in a number of ways.
The Independent Housing Ombudsman is available to hear the complaint
of any aggrieved RSL tenant, and can require the payment of compensation
or the granting of a new tenancy. The Housing Corporation, too,
has extensive regulatory powers (to which there is no equivalent
in the local authority sector) to act against oppressive or unreasonable
behaviour by any RSL. Last but not least, associations grant normally
grant full assured tenancies, rather than the assured shortholds
that are the norm in the private sector, thus conferring a strong
form of security of tenure and other tenants' rights.
6.3 It is therefore not necessary, even
when considering only tenants' rights and setting aside wider
issues, to apply "public status" to the core functions
of housing associations. When those wider issues are taken into
account, it becomes even clearer that associations' status should
not be compromised. "Non-public" status has allowed
associations to make a major contribution to the implementation
of Government housing policy, and successive Governments have
attached great importance to maintaining it. It has allowed associations
to deliver practical benefits for tenants and people in housing
need, and it is needed as much as ever if they are to continue
to develop new housing and undertake the very substantial works
necessary to achieve the "Decent Homes" standard by
the target date of 2010. Compromising associations' "non-public"
status would put all this at risk.
17 April 2003
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