Housing And Regeneration Bill - continued          House of Lords

back to previous text

609.     Subsection (7) provides that, in relation to an amendment which requires consent, the requirement to send copies of resolutions to the registrar of companies under section 30 of the Companies Act 2006 is only satisfied if it is accompanied by a copy of the regulator's consent under subsection (3). Failure to comply with the requirement to send copies of resolutions under section 30 of the Companies Act 2006 is an offence.

610.     Subsection (8) gives the Secretary of State power, by order, to amend the list in subsection (2).

Guidance

Clause 212 - Use of intervention powers

611.     The regulator must produce guidance for registered providers on how it uses, and intends to use the powers that it has under the provisions of Chapters 6 and 7. It will have regard to this guidance in using those same powers.

Clause 213 - Consultation

612.     Before giving guidance under clause 202, the regulator must consult bodies representative of registered providers, bodies representing the interests of the tenants of social housing, and the HCA.

Managers of social housing

Clause 214 - Accreditation

613.     This clause allows the regulator to operate a scheme for the purpose of accrediting persons who provide services in connection with the management of social housing.

614.     Subsection (2) provides that the regulator may approve a scheme operated by someone else - a trade body for example. Subsection (3) provides that approval may be withdrawn.

615.     Subsection (6) provides that standards set under clause 191 may refer to accreditation.

Chapter 7 - Enforcement powers

Clause 215: exercise of enforcement powers

616.     This clause applies where the regulator is deciding whether to exercise a power under Chapter 7, which contains the regulator's enforcement powers, which power under Chapter 7 to exercise, or how to exercise a power under Chapter 7. It provides that in all these circumstances, the regulator shall consider:

(a)      the desirability of registered providers being free to choose how to provide services and conduct business;

(b)      whether the failure or other problem concerned is serious or trivial;

(c)      whether the failure or other problem is a recurrent or isolated incident;

(d)      the speed with which the failure or other problem needs to be addressed.

Clause 216 - Overview

617.     This clause describes what an enforcement notice is. It is to require a registered provider to do (or not do, or to stop doing) certain things in order to resolve specified failures or other problems.

Clause 217 - Grounds for giving notice

618.     This clause specifies the grounds on which the regulator may give an enforcement notice. Subsection (1) specifies that the regulator must be satisfied that one of the grounds for issuing an enforcement notice applies and that an enforcement notice is the appropriate intervention power to use, whether alone or as a potential precursor to further action. As the regulator must be satisfied that there are grounds to use an enforcement notice, it will have to have established the facts to a degree that justifies it directing a registered provider to act in a specified way.

619.     Subsections (2) to (11) specify the cases where an enforcement notice is applicable as required by subsection (1)(a) as follows:

  • that a registered provider has failed to meet a standard of social housing established by the regulator under clauses 191 or 192,

  • that the affairs of a registered provider have been mismanaged,

  • that the registered provider has failed to comply with an earlier enforcement notice

  • that the registered provider has failed publish information in accordance with a requirement under clause 227(3) or 239(3),

  • that it is required to protect the interests of tenants,

  • that it is necessary to protect the assets of a registered provider,

  • that a registered provider has failed to comply with an undertaking that it has given to the regulator as provided for in clause 125,

  • that the registered provider has failed to pay an annual fee under clause 117(2),

  • that an offence under this Part has been committed by a registered provider

  • that a registered provider has failed to comply with an order made by an ombudsman appointed by virtue of clause 124.

620.     Subsection (12) provides that where the regulator is satisfied that an offence has been committed in respect of a registered provider by an individual (eg a member of staff), the regulator may serve an enforcement notice on the individual rather than the provider and, in such cases, references in this Part of the Bill to registered provider can be read as references to that person.

Clause 218 - Content

621.     This clause sets out what an enforcement notice must include. It must specify which of the cases in clause 217 are the grounds for the enforcement notice, the specific action which the registered provider must take which is the substance of the notice, the date by when the specified action must be taken, and the effect of clauses 212 to 224.

622.     Subsection (2) permits the regulator to specify in an enforcement notice that the notice must be published in a specified manner

Clause 221 - Notifying HCA

623.     This clause requires that, if the regulator gives an enforcement notice, it should send a copy to the HCA.

Clause 222 - Appeal

624.     This clause provides that a registered provider who has been served with an enforcement notice may appeal against it to the High Court.

Clause 223 - Withdrawal

625.     This clause gives the regulator the power to withdraw an enforcement notice at any time by giving written notice to the registered provider on whom the enforcement notice has been served.

Clause 224 - Sanction

626.     Subsection (1) gives the regulator the power to consider the use of its other intervention powers if the registered provider has not complied with the contents of an enforcement notice that the regulator has issued.

627.     Subsection (2) provides that where the enforcement notice has been served on a person under clause 217(12), the regulator may only either use the powers to require the payment of a fine as set out in clauses 225 to 234, or take steps to instigate a prosecution in relation to the offence which provided grounds for service of the enforcement notice.

628.     Subsection (3) provides that a person who has been served with an enforcement notice under Case 9 of clause 217 may be prosecuted for the offence which gave grounds for the enforcement notice only if they have not complied with that enforcement notice.

Penalty

Clause 225 - Overview

629.     This clause describes the power to impose fines to penalise failures by registered providers.

Clause 226 - Grounds for imposition

630.     This clause specifies the grounds on which the regulator may decide to require registered providers to pay fines. As well as being satisfied that one of the grounds specified in this clause applies, the regulator must also be satisfied that a fine is the appropriate penalty for the identified problem.

631.     Subsections (2) to (7) of this clause specify the cases where the regulator may issue a fine. These cases are where:

  • the registered provider has failed to meet a standard of social housing established under clauses 191 or 192,

  • the affairs of the registered provider have been mismanaged,

  • the registered provider has failed to comply with an enforcement notice,

  • the registered provider has failed to comply with an undertaking that it has given to the regulator,

  • the registered provider has failed to pay an annual fee under section 117(2), and

  • where offences under this Part of the Bill have been committed by the registered provider.

632.     Subsection (8) provides that where the regulator is satisfied that an offence has been committed in respect of a registered provider by an individual, the grounds for imposing a penalty are as in subsection (7), and the regulator may require the individual rather than the provider to pay the fine. This subsection also provides that, in such cases, references in this Part of the Bill to a registered provider can be read as references to that person.

633.     Subsection (9) requires that the regulator must be satisfied beyond reasonable doubt in respect of the grounds at subsection (7).

Clause 227 - Imposition

634.     This clause provides that a penalty is imposed by a written notice being served on a registered provider. Subsection (2) requires the notice to specify which of the cases listed in subsections (2) to (7) of clause 226 is the basis for the notice, the amount of the penalty that must be paid, how the penalty must be paid, the deadline for the payment of that fine, and any interest or additional penalty payable in the event of late payment.

635.     Subsections (3) and (4) require that the penalty notice explain the effect of clauses 233(1), (3) and (6), and clause 234. These state that a penalty is treated as a debt to the regulator; that interest is treated as penalty; that, if an offence is punished with a penalty, it may not also be punished through prosecution; and that the provider can appeal to the High Court.

636.     Subsection (5) provides for the Secretary of State to make further regulations about the period for payment of fines, the content of the penalty notice and the way in which a penalty notice may be served.

Clause 228 - Amount

637.     Subsection (1) provides that the amount of the fine for a case covered by the ground in clause 226(6) may be no more than the maximum amount that the court could impose in those cases.

638.     Subsection (2) specifies that, other than where the ground for imposition is set out in clause 226(6), the maximum amount of penalty that the regulator may impose is £5,000.

639.     Subsection (3) gives the Secretary of State the power to amend the maximum penalty specified by order.

Clause 229 - Warning

640.     This clause sets out a warning procedure which it calls a "pre-penalty warning". This process must be carried out before a fine can be imposed by a penalty notice as set out in clause 227. The pre-penalty warning must be given to the provider concerned and must include the following-

  • the grounds which the regulator is satisfied are met and are the basis for the fine,

  • a warning that the regulator is considering imposing a fine on the specified grounds,

  • an indication, if the regulator is able to give one, of the likely amount of the fine,

  • an explanation of the arrangements specified in clauses 230 to 234 for:

      a)     making representations concerning the contents of the warning,

      b)     what is done with the proceeds of the fine,

      c)     how a penalty notice may be enforced; and

      d)     rights of appeal.

Clause 230 - Representations

641.     This clause allows providers issued with a warning to make representations to the regulator about its proposed action. The warning issued under clause 217 must provide for a minimum period for the provider to make representations to the regulator.

642.     Subsection (2) specifies that the minimum period will be at least 28 days, beginning on the date on which the registered provider receives the pre-penalty warning.

643.     The representations may pertain to any matter connected with the contents of the warning, but in particular with whether a fine should be imposed, or the likely amount of the fine.

644.     Subsection (4) provides that at the end of the period for representations the regulator must consider any representations that have been made, and then decide whether to impose the fine.

Clause 231 - Notifying HCA

645.     This clause requires that, if the regulator imposes a penalty, it must send a copy of the penalty notice to the HCA

Clause 232 - Destination

646.     This clause specifies what the regulator must do with money that it receives from fines it has imposed on registered providers. Subsection (2) provides for the regulator to deduct from that money the direct costs of administering the penalty procedure, and a share of its overall expenditure that is proportionate to the effort and resource required for administration of the penalty procedure. Subsection (3) provides that any balance remaining will be paid to the HCA to be used, at the HCA's discretion, for investment in social housing.

Clause 233 - Enforcement

647.     This clause specifies how fines will be enforced, and provides for late payment or non-payment of fines. Fines are treated as a debt to the regulator once a penalty notice is issued under clause 227.

648.     Subsection (2) gives the Treasury a power to make regulations permitting the regulator to charge interest on fines that are not paid by the date specified in the penalty notice and to impose additional fines where the original fine is not paid by the specified deadline. In such cases, subsection (3) provides that the additional sums are also treated as fines, and that these additional amounts may have the effect of increasing the penalty above the limit set by clause 228.

649.     Subsection (4) provides for how interest rates may be set for interest charges on late payment of penalties as provided for in subsection (2).

650.     Subsection (5) gives a discretionary power to the regulator to offer an early payment discount if the provider pays the fine in advance of the date specified in the penalty notice.

651.     Subsection (6) specifies that if the penalty notice is served on a person under clause 214 subsection (7), he or she may not be prosecuted for the offence which is the ground for requiring the payment of a fine.

Clause 234 - Appeal

652.     This clause gives a provider who has been served with a penalty notice the right to appeal to the High Court against the regulator's imposition of the penalty, or its amount, or both.

Compensation

653.     Clauses 235 to 244 describe the arrangements for the regulator to exercise a power to require a registered provider to pay compensation to certain classes of people.

Clause 235 - Overview

654.     This clause describes the nature of the power to require a registered provider to pay compensation.

Clause 236 - Grounds for award

655.     This clause specifies the grounds on which the regulator may require a registered provider to pay compensation. The regulator must be satisfied either that the registered provider has failed to meet a standard of social housing established by the regulator under clauses 191 or 192 of this Part, or that the registered provider has failed to comply with an undertaking that it has given to the regulator.

656.     The regulator must also be satisfied that requiring a registered provider to pay compensation is appropriate, whether alone or in combination with the use of one or more of the regulator's other enforcement powers.

Clause 237 - Nature

657.     This clause indicates those circumstances under which compensation may be awarded. Subsection (1) provides that it should be awarded to a person or persons who have suffered as a result of the failure that forms the basis for awarding compensation as defined by clause 236.

658.     Subsection (2) restricts the person or persons eligible for compensation to those who are tenants or occupiers of social housing, but provides that compensation can be made to individual tenants or occupiers of a registered provider, or to groups of them, or to all of a provider's tenants or occupiers.

Clause 238 - Social housing ombudsman compensation

659.     This clause provides for the regulator's power to require a provider to pay compensation to be co-ordinated with the arrangements for approved ombudsman schemes. All registered providers must be a member of an approved ombudsman scheme under clause 124 and those schemes may provide for the ombudsman to determine that one of its members should pay compensation in respect of a case brought by an individual against that member.

660.     Subsection (1) provides that where this is the case, the regulator may not direct a registered provider to pay compensation to the same person for the same reason.

661.     Subsection (2) however permits the regulator to direct the provider to pay compensation in such cases where the ombudsman has awarded compensation, but the provider has not paid it.

Clause 239 - Imposition

662.     This clause specifies the process and content for imposing a direction to a provider to pay compensation. The direction to pay compensation is done by the regulator giving a written notice, which is called a "compensation notice", both to the registered provider who must pay the compensation, and to the person or persons who are to be compensated.

663.     Subsection (2) provides that compensation notices must set out:

  • the grounds on which compensation is awarded, which must be one or more of the grounds specified in clause 236,

  • the amount of the compensation award,

  • the person or persons who are to be compensated,

  • any interest or additional compensation payable in the event of late payment, and

  • the period within which that compensation must be paid.

664.     Subsection (4) requires that the notice explain the effect of clauses 243(1) and (3), and clause 244.

665.     Subsection (5) requires the Secretary of State to make regulations about the period within which compensation must be paid, and gives the Secretary of State the power to make regulations about the form and content of compensation notices and the manner in which a compensation notice may be given

Clause 240 - Impact

666.     This clause requires the regulator to take account of any information available to it about the financial situation of the registered provider when considering awarding compensation and when considering the amount. In particular it must consider the likely impact on the provider's ability to provide services and avoid jeopardising its financial viability, existing financial commitments, and ability to remedy the problem.

Clause 241 - Warning

667.     This clause sets out a warning procedure. Warning must be given before compensation can be imposed by a compensation notice as set out in clause 239. Subsection (1) requires that the pre-compensation warning must be given to the registered provider concerned and must include the following-

  • the grounds which the regulator is satisfied are met and are the basis for awarding compensation,

  • a warning that the regulator is considering awarding compensation to specified persons,

  • an indication, if the regulator is able to give one, of the likely amount of the compensation award,

  • an explanation of the arrangements specified in clauses 242 to 244 for:

    o     making representations concerning the contents of the warning,

    o     how a compensation notice may be enforced; and

    o     rights of appeal.

668.     Subsection (2) requires that the regulator consult the ombudsman for the scheme to which the registered provider belongs before issuing a pre-compensation warning.

669.     Subsection (3) requires the regulator to give the HCA, and any other person that it thinks appropriate, a copy of the pre-compensation warning. In doing so, subsection (4) sets out that it should particularly take into account, when considering to whom it would be appropriate to send a copy, any person who has provided information as a result of which the regulator is considering making an award of compensation.

670.     Subsection (5) requires the regulator to indicate in its pre-compensation warning whether the regulator would accept a voluntary undertaking under section 125 instead of compensation.

671.     Subsection (6) provides that the regulator may combine the pre-compensation warning with warnings about the use of its other enforcement powers.

Clause 242 - Representations

672.     This clause makes arrangements for providers issued with a warning to make representations to the regulator about its proposed action. The warning issued under clause 241 must provide for a minimum period for the provider to make representations to the regulator.

673.     Subsection (2) specifies that the minimum period must be at least 28 days beginning with the date on which the registered provider receives the pre-compensation warning.

674.     The representations may pertain to any matter connected with the contents of the warning, but in particular with whether compensation should be awarded, and the likely amount of the compensation.

675.     Subsection (4) provides that at the end of the period for representations the regulation must consider any representations that have been made, and then decide whether to direct the registered provider to pay compensation.

Clause 243 - Enforcement

676.     This clause specifies how compensation notices will be enforced, and makes provisions for late payment or non-payment of compensation. Compensation is treated as a debt to the person or persons to whom it has been awarded.

677.     Subsection (2) gives the Treasury a power to make regulations permitting the regulator to charge interest on compensation that is not paid by the date specified in the compensation notice and to award additional compensation where the original compensation award is not paid by the specified deadline. Subsection (3) provides that in such cases, the additional sums are also treated as compensation.

678.     Subsection (4) provides for how interest rates may be set for interest charges on late payment of penalties as provided for in subsection (2).

Clause 244 - Appeal

679.     This clause gives a provider who has been served with a compensation notice the right to appeal to the High Court against the regulator's award of compensation, or the amount of compensation awarded, or both.

Management etc.

Clause 245 - Overview

680.     This clause describes the powers in this Chapter as being enforcement powers in relation to how providers manage their affairs or are constituted.

 
previous Section Bill Home page continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search Page enquiries ordering index

© Parliamentary copyright 2008
Prepared: 2 April 2008