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Clauses 89 and 90 - Procedure and conflict of interest
185. Clause 89 provides for the regulator to determine its own procedure and for the manner in which its procedure is made public. Clause 90 states that this procedure must include arrangements for dealing with conflicts of interest of members, employees or members of committees and sub-committees.
Clauses 91 and 92 - Committees and delegation
186. Clauses 91 and 92 enable the regulator to authorise a committee, a sub-committee, a member or an employee to exercise a function on its behalf. All committees or sub-committees will need to include at least one member of the regulator (but may also include non-members).
Clause 93 - Seal
187. This clause provides that a document executed under the seal is to be regarded as valid unless the contrary is shown, and that the seal may be authenticated by any person authorised to so do or by a member.
Clause 94 - Annual report
188. This clause requires the regulator to prepare and publish an annual report, as soon as is reasonably practicable after the end of each financial year. The contents must be a report on the performance of its functions during the preceding financial year. In particular, it will include a statement of the regulator's accounts, and specify any direction that the regulator has been given by the Secretary of State during the preceding year under clause 195. Having prepared the report, the regulator will send a copy of the report to the Secretary of State, who will then lay a copy before Parliament.
Powers
Clause 95 - General
189. This clause gives the regulator power to do anything it thinks necessary or expedient for the purpose of, or in connection with, the performance of a function conferred on it by this Part, or another enactment. In particular the regulator may do anything it thinks appropriate for advancing its fundamental objectives.
Clause 96 - Studies
190. This clause gives the regulator a power to commission studies or to carry them out itself with the objective of improving the economy, efficiency and effectiveness of registered providers. Where the regulator carries out or commissions such studies, it may publish a report.
Clause 97 - Financial assistance
191. This clause gives the regulator a power to give financial assistance to another person for the purpose of advancing its fundamental objectives as set out in clause 88.
192. Subsection (1) gives the regulator power to give financial assistance in connection with research, guidance, best practice and tenant involvement.
193. Subsection (2) sets out a range of means by which the regulator may give financial assistance, including grant, loan, or the defraying of expenditure on behalf of a person. Subsection (2)(d) notes that the regulator may also give financial assistance in any other way, with the specified exceptions of purchasing loan or share capital of a body corporate or the giving of a guarantee or indemnity.
194. Subsection (3) gives the regulator a separate power to give financial assistance to a registered provider by lending money or giving a guarantee or indemnity. Such assistance may only be given with the consent of the Secretary of State (subsection (4)) given with the approval of the Treasury.
Clause 98 - Evidence
195. This clause provides that the regulator may, in considering whether to exercise a power, have regard to information from any source including, in particular, from tenants, bodies representing tenants, local housing authorities, or an ombudsman.
Clause 99 - Information, advice &c.
196. This clause enables the regulator to publish ideas or information; to undertake research in relation to social housing; and to provide guidance, advice, education or training.
197. Subsection (2) enables the regulator to arrange for someone else to carry out all these activities on its behalf, and also joint working with other persons engaged in the work set out in subsection (1).
198. Subsection (3) specifies that advice may be given to unregistered and prospective housing associations. This provision replicates section 77 of the Housing Associations Act 1985.
Money
Clause 100 - Remuneration
199. This clause provides for the regulator to make payments to appointed members and employees. Subsection (1) enables the regulator to pay remuneration, allowances, pensions and gratuities to Board members although subsection (2) makes clear that rates and eligibility will be determined by the Secretary of State. Subsection (3) provides, if the Secretary of State considers there are special circumstances, for the regulator to make compensation payments to a person who ceases to be an appointed member.
200. Subsection (4) gives the regulator the power to pay its employees remuneration, allowances, pensions and gratuities.
Clause 101 - Charging
201. This clause allows the regulator to charge for giving advice, conducting research or providing other services. This replaces the power of the Housing Corporation under section 77 of the Housing Associations Act 1985.
Clause 102 - Assistance by Secretary of State
202. This clause enables the Secretary of State to make payments to the regulator by way of grant or loan, and for those payments to be subject to conditions.
Clause 103 - Borrowing
203. This clause specifies that the regulator may borrow by way of an overdraft or otherwise, for the short-term management of its finances; or from the Secretary of State. It may not borrow otherwise.
204. This replaces the wider borrowing powers of the Housing Corporation under section 92 of the Housing Associations Act 1985. Those powers will not be needed by the regulator as it will not be investing in affordable housing.
Clauses 104 and 105 - Accounts and Financial year
205. Clause 104 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 to the Comptroller and Auditor General. Clause 105 defines the regulator's financial year.
Relationship with other bodies
Clause 106 - Co-operation with the HCA
206. Subsection (1) requires the regulator to co-operate with the HCA.
207. Subsection (2) requires the regulator to consult the HCA on matters likely to interest it. This mirrors a parallel provision at clause 40, requiring the HCA to co-operate with the regulator, and to consult the regulator on matters likely to interest it.
Clause 107 - Direction to the HCA
208. 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 may only be made in respect of the HCA's power to give financial assistance under clause 22 in connection with social housing.
209. 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 may 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 203 (and the inquiry is not concluded),
- the regulator has received notice in respect of the registered provider under clause 145 (moratorium), or
- the regulator has appointed an officer of the registered provider under clause 268 (and the person appointed has not vacated office).
210. 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 while allowing others. It also means that the regulator could prohibit financial assistance even where, for example, a funding agreement is already in place.
211. Subsection (4) prevents the regulator from issuing a direction prohibiting grant to a registered provider where that grant is to be given in respect of discounts given by the provider on disposals of dwellings to tenants. This ensures that the Regulator's powers do not interfere with the HCA's statutory duty to pay grants under clause 39 (duty to give financial assistance in connection with certain disposals).
212. Subsection (5) states that a direction shall have effect until withdrawn.
Information
Clause 108 - Collection
213. Clause 108 gives the regulator, for purposes connected with its functions, the power to require documents or information from any person it believes may possess them, concerning the financial or other affairs of registered providers or the activities or proposed activities of a registered provider or a person who has applied to become a registered provider.
214. The regulator is likely to use this power to follow up concerns raised by tenants, local authorities or others by asking for specific information from the provider in addition to standard performance information obtained under clause 201. The regulator may ask for the same types of information from profit-making registered providers as from non-profit providers.
215. Subsection (2) provides that a requirement may not be imposed on a person other than the body to which the document or information relates, unless the body has been required to provide the document or information but failed to do so; or the regulator thinks the body is unable to provide it.
216. Subsection (3) provides that the regulator may specify the form and manner in which it is to be provided and when and where it is to be provided.
217. Subsection (4) permits the regulator to copy or record the documents or information required by it under this clause.
218. Subsection (5) specifies that it is an offence to fail to comply with a request for information made by the regulator under this power unless the person has a reasonable excuse. Subsection (3) of clause 109 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.
219. 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 109 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.
220. 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 (6) of clause 109 provides that such an order may include a provision for costs.
Clause 109 - Section 108: supplemental
221. Subsection (1) of clause 109 limits the power to require information in clause 108 such that the regulator cannot require a person to disclose anything that they would be entitled to refuse to disclose in High Court proceedings on the grounds of legal professional privilege.
222. 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 whose affairs or activities the documents or information relates or the subsidiary or associate of the registered provider.
223. Subsections (5) provides that prosecutions may only be brought by or with the consent of the regulator or the Director of Public Prosecutions.
Clause 110 - Disclosure
224. Clause 110 governs the way in which information may be disclosed to and disclosed by the regulator in certain circumstances.
225. 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 (8) 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.
226. Subsection (2) provides for the regulator to disclose information to a public authority (as defined in subsection (8)) 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.
227. Subsection (3) provides that the regulator may disclose information to a person acting on its behalf (but who is not a public authority) for a purpose connected with the regulator's functions, for example an appointed auditor.
228. Subsections (4), (6) and (7) 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.
229. Subsection (5) means that a public authority or the regulator will not be able to disclose information under this clause if doing so would breach a statutory prohibition on disclosure imposed by other legislation.
Chapter 3 - Registration
Introduction
Clause 111 - Overview
230. This clause describes the purpose of this Chapter which is to establish a register of providers of social housing.
Clause 112 - The register
231. Subsection (1) of clause 112 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 replaces the current requirement on the Housing Corporation under section 1 of the 1996 Act.
232. Subsection (2) of clause 112 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 113 - Eligibility for registration
233. Subsection (1) of clause 113 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 114. "English body" is defined in clause 80.
234. 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.
235. Registration is not compulsory for persons that provide social housing as defined by clause 69. However, grant funding might, for example, be conditional on being registered.
236. 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.
237. Subsection (3) requires that the body must satisfy any relevant criteria that have been set by the regulator in respect of:
- other arrangements for its management.
238. Subsection (4) requires that before the regulator sets any criteria for eligibility for registration, the regulator must consult:
- one or more bodies representative of the interests of registered providers, and
- one or more bodies representative of the interests of tenants.
Clause 114 - Local authority non-registrable bodies
239. This clause sets out the exceptions to clause 113(1).
240. Subsection (2) specifies that local housing authorities, as defined in section 1 of the Housing Act 1985, are not eligible for registration.
241. Subsection (3) specifies that county councils are not eligible for registration.
242. Subsection (4) specifies that a person controlled by an authority that is within subsections (2) or (3) is not eligible for registration.
243. Subsection (5) gives the Secretary of State the power to make regulations defining when a person is controlled by an authority for the purposes of subsection (4).
244. Subsection (6) provides that the definition of person controlled by a local authority may be expressed by reference to a document identified in regulations under section 21(2)(b) of the Local Government Act 2003.
Clause 115 - Profit-making and non-profit organisations
245. Subsection (1) of this clause provides that the register kept under clause 112 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.
246. Subsections (2) to (6) define a non-profit organisation.
247. Subsection (2) specifies a registered or non-registrable charity as a non-profit organisation.
248. 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.
249. 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.
250. Subsection (8) defines a profit-making organisation as any organisation which is not a non-profit organisation.
251. These definitions are the basis on which the regulator will make the designation in the register provided for in subsection (1).
252. 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 116 - Entry
253. Subsection (1) of this clause provides that the regulator shall register any person who is eligible for registration as defined in clause 113 and who applies to the regulator to be registered.
254. 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.
255. Subsection (3) specifies that this clause is subject to clause 117 (fees).
256. 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 118 or 119.
257. 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 117 - Fees
258. This clause gives the regulator the power to set fees for registration. The regulator may make the initial registration under clause 116 conditional on payment of a fee, and may make continued registration conditional upon payment of annual fees.
259. 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.
260. 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.
261. Subsection (5) provides that fees will be set in accordance with principles which aim to ensure that so far as 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.
262. Subsection (6) specifies that the principles under subsection (5) for setting fees:
a) shall provide for clause 97(3) (the regulator's power to give financial assistance to a registered provider by lending money or giving a guarantee or indemnity with the consent of the Secretary of State) to be disregarded for the purpose of subsection (5)(a),
b) may provide for specified or potential expenditure under the remainder of clause 97 (financial assistance) to be disregarded.
263. Subsection (7) specifies that in preparing the principles, the regulator shall consult the Secretary of State and persons representing the interests of fee-payers.
264. Subsection (8) specifies that the regulator's accounts shall show both fees received and fees outstanding.
Clause 118 - De-registration: compulsory
265. Subsection (1) gives the regulator the power to remove a body from the register, if it thinks that the body-
- is no longer eligible (as provided for in clauses 113 and 114)
- has ceased to carry out activities, or
266. 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.
267. Subsection (3) requires the regulator to take all reasonable steps to inform a body that it has been deregistered on the grounds that it is no longer eligible for registration or has ceased to carry out activities. This will ensure that the body knows it no longer has to comply with regulation, though will still be required by clause 171 to seek disposal consent (see clause 185).
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