Housing And Regeneration Bill - continued          House of Lords

back to previous text

Clause 246 - Management tender

681.     Subsection (1) specifies that the regulator may use this power where it is satisfied that a registered provider has failed to meet standards set under either clause 191 or 192, or that its affairs in relation to social housing have been mismanaged, as defined in clause 274.

682.     If the regulator is satisfied that one of the conditions in subsection (1) is met, subsections (2) and (3) gives it the power to require the registered provider to tender out the management of its social housing, in whole or in part. The regulator will specify the process that the provider is to follow in putting the services out to tender and making an appointment as a result of that process.

683.     The extent of the services to be tendered out may be restricted either by reference to the type of services concerned, or in relation to a specific part or parts of the social housing stock owned by the registered provider.

684.     The regulator must specify certain matters if it exercises this power, as follows:

  • the constitution of the panel which has the responsibility for selection, which must include provision for ensuring tenants' interests will be represented on that panel,

  • provision for ensuring that the procurement process follows best practice, and

  • the terms and conditions on which the manager is to be appointed, that will include the setting of the required standards, how those standards will be monitored and enforced, and resources.

Clause 247 - Section 246: Supplemental

685.     Subsection (1) requires that the regulator, before it requires a registered provider to out its management functions under tender under clause 246(2), must give the registered provider a notice which:

  • states the grounds on which it may decide to require the provider to tender out its management functions,

  • warns the provider that it is considering using this power, and

  • explains the effect of the clause.

686.     Subsection (2) specifies that the notice must specify a period during which the registered provider may make representations to the regulator. The period must be at least 28 days and begin on the date the provider receives the notice.

687.     The notice served under clause 247(1) must be copied to the HCA, and to any other person that the regulator thinks appropriate. In determining who the regulator thinks is appropriate for this purpose, it must have regard to any person who has provided information that has directly or indirectly led the regulator to satisfying itself that the use of this power is warranted.

688.     The notice served under clause 247(1) must advise the registered provider on whom it is served about the provisions for the provider to make voluntary undertakings to the regulator under clause 125, and the extent to which it would accept an undertaking instead of using this power.

689.     Subsection (5) allows the regulator to use this enforcement power in conjunction with some of the other enforcement powers that it has under Chapter 7.

690.     Subsection (6) provides that in deciding whether to require a management tender, the regulator must have regard to the views of the relevant tenants, the registered provider, the HCA and, if appropriate, any relevant local housing authority.

691.     Subsection (7) requires the regulator to send the HCA notice of its final decision to impose a requirement.

692.     A registered provider served with a notice by the regulator under this clause has a right of appeal to the High Court.

Clause 248 - Management transfer

693.     The powers set out in these clauses are exercisable following an inquiry as provided for under clause 203, or an audit under clause 207.

694.     Subsection (2) provides that the regulator may require a registered provider to transfer the management of some or all of its management functions to another specified person.

695.     The regulator may use this power where it is satisfied that one of the conditions specified in subsection (1) is met, which are that-

  • a registered provider has failed to meet the requirements of a standard set by the regulator under clause 191 or 192,

  • the affairs of the registered provider have been mismanaged, in respect of social housing,

  • some or all of a registered provider's management of its social housing is likely to be improved by the transfer of those management functions.

696.     Subsections (3) to (5) set out the nature of the requirement that will be specified by the regulator.

697.     Subsection (3) provides that the regulator may determine the scope of the requirement to transfer management.

698.     Subsection (4) provides that the requirement will specify the terms and conditions of the appointment, including the remuneration of the person to whom the management is to be transferred, and that these will be determined in accordance with the scope of the management functions to be transferred.

699.     Subsection (5) gives the person to whom the management functions are to be transferred the powers necessary to carry out the activities specified in the requirement. The powers may be specified by the regulator in the requirement. In addition the person to whom management is transferred by the requirement will have any other powers in relation to the registered provider's business that are necessary to give effect to the requirement.

Clause 249 - Section 248: supplemental

700.     This clause specifies the process by which the power in clause 248 is exercised. Following a statutory inquiry, and having decided that it should direct the transfer of management, subsection (1) requires the regulator to serve the registered provider with a notice specifying-

  • which of the grounds set out in clause 248(1) applies,

  • that it is considering directing the transfer of the registered provider's management functions as a consequence, and

  • setting out the effects of this clause.

701.     Subsection (2) specifies that notice must specify a period during which the registered provider may make representations to the regulator. The period must be at least 28 days and begin on the date the provider receives the notice.

702.     The regulator must send a copy of that notice to the HCA and to any other person that it thinks appropriate, with particular consideration to any person who has been involved in identifying to the regulator the matters that form the basis for the regulator's use of this power

703.     The notice must draw to the registered provider's attention the provisions of clause 125 which provide for a registered provider to make a voluntary undertaking to the regulator at any time on any matter, and the notice must also indicate the extent to which the provision of a voluntary undertaking under that provision would be accepted instead of, or in mitigation of, the direction to transfer management which the regulator is considering.

704.     The notice may be combined with notices about the use of other enforcement powers available under Chapter 7. Subsection (6) provides that the regulator should have regard to the views of (a) relevant tenants, (b) the registered provider, (c) the HCA, and (d) if the regulator thinks it appropriate, any relevant local housing authority, in deciding whether to direct a registered provider, following an inquiry, to transfer management to a specified person.

705.     Subsection (7) requires the regulator to notify the HCA of any requirement to transfer management functions to a specified person.

706.     Subsection (8) gives the registered provider subjected to a requirement under clause 248(2) the right of appeal to the High Court.

Clause 250 - Appointment of manager

707.     This clause gives the regulator the power either to appoint an individual as manager of the registered provider, or to require the registered provider to appoint an individual as manager as set out in subsection (2).

708.     The regulator may do this if it is satisfied that a registered provider has failed to meet a standard set out in either clause 191 or 192, or that its affairs have been mismanaged in relation to social housing.

709.     Subsections (3) to (5) set out the nature of the requirement or the appointment that will be specified by the regulator.

710.     Subsection (3) provides that the regulator may determine the matters in respect of which the manager is to be appointed.

711.     Subsection (4) provides that the appointment of a manager, or the requirement to appoint a manager, will specify the terms and conditions of appointment, including the remuneration of the manager, and that these will be determined in accordance with the scope of the appointment of the manager, or the requirement to appoint a manager under subsection (3).

712.     Subsection (5) gives the appointed manager the powers necessary to carry out the activities specified in the requirement or the appointment. The powers may be specified by the regulator in the requirement of the appointment. In addition, the appointed manager will have any other powers in relation to the registered provider's business that are necessary to give effect to the requirement of the terms of the manager's appointment.

Clause 251 - Section 250 supplemental

713.     Before it imposes a requirement under subsection (2) of clause 250 the regulator must serve a notice on the registered provider specifying which of the grounds listed in subsection (1) of that clause apply, warning that it is considering the use of the power set out in clause 250, and explaining the provisions of clause 251.

714.     The effect of subsection (2) is that notice must specify a period during which the registered provider may make representations to the regulator. The period must be at least 28 days and begin on the date the provider receives the notice.

715.     Subsection (3) provides that the regulator must send a copy of that notice to the HCA and to any other person that it thinks appropriate, with particular consideration to any person who has been involved in identifying to the regulator the matters that form the basis for the regulator's use of this power.

716.     Subsection (4) provides that the notice must draw to the registered provider's attention the provisions of clause 125 which provide for a registered provider to make a voluntary undertaking to the regulator at any time on any matter, and the notice must also indicate the extent to which the provision of a voluntary undertaking under that provision would be accepted instead of, or in mitigation of, the appointment of a manager or the direction to appoint a manager which the regulator is considering.

717.     Subsection (5) provides that the notice may be combined with notices about the use of other enforcement powers available under Chapter 7.

718.     Subsection (6) requires the regulator to notify the HCA if it appoints a manager or imposes a requirement on a registered provider to appoint a manager.

719.     Subsection (7) gives the regulator the power to require the appointed manager to report to it in relation to matters specified in the manager's appointment.

720.     Subsection (8) gives the registered provider the right of appeal to the High Court.

Clause 252 - Transfer of land

721.     Clauses 252 and 253 replace paragraph 27 and 29 of Schedule 1 to the 1996 Act.

722.     This clause applies to non-profit registered providers only.

723.     Subsection (1) sets out the cases where this clause applies. These cases are:

  • the provider has failed to meet a standard under clauses 191 or 192,

  • there has been mismanagement of a provider's affairs in relation to social housing,

  • transfer of the land of a provider would be likely to improve the management of that land.

724.     Subsection (2) gives the regulator power to require that the registered provider should transfer its land either to the regulator or to another non-profit registered provider.

725.     Subsection (3) specifies that this power may not be used in respect of a registered charity.

726.     Subsection (4) provides that this power may be used in respect of a charity that is not registered with the Charity Commission, but that the charity's land may only be transferred to another charity whose objects the regulator thinks are similar to those of the transferring charity.

Clause 253 - Section 252: supplemental

727.     Subsection (1) provides that a transfer under clause 252 shall be on terms specified in or determined in accordance with the regulator's formal requirement.

728.     Subsection (2) specifies that the price attached to the transfer shall be at least the amount certified by the district valuer as the amount that the property to be transferred would fetch if sold by a willing seller to another non-profit registered provider.

729.     Subsection (3) provides that the terms of the transfer will include provision for the payment of debts or liabilities in respect of the land to be transferred, whether or not they are secured by a charge on the land.

730.     Subsection (4) requires that the Secretary of State must consent to a requirement for a transfer of land under clause 252, both in respect of the transfer itself, and the terms of that transfer.

Clause 254 - Amalgamation

731.     This clause relates only to non-profit registered providers. Subsection (1) sets out the cases where this clause applies. These cases are:

  • a registered provider which is an industrial and provident society has failed to meet a standard under clauses 191 or 192,

  • the affairs of a registered provider which is an industrial and provident society have been mismanaged in relation to social housing,

  • the amalgamation of an industrial and provident society with another industrial and provident society would be likely to improve the management of its social housing.

732.     Subsection (2) gives the regulator power to bring about the amalgamation of the society with another industrial and provident society.

733.     Subsection (7) provides that any body created by virtue of an amalgamation must be registered by the regulator and designated as a non-profit organisation.

Restrictions on dealings

Clause 255 - Restrictions on dealings during inquiry

734.     This clause allows the regulator to make an order to restrict the transactions which a non-profit registered provider may enter into or the payments it makes, and may order anyone holding money or securities on behalf of the provider not to part with them. This clause applies where an inquiry is in progress and:

(a)      the regulator has reasonable grounds for believing the provider has failed to meet a standard and it is in the interests of tenants or its assets require protection;

(b)      as a result of an interim report from an inquiry, the regulator is satisfied that the provider has failed to meet a standard or its affairs have been mismanaged.

735.     The restrictions in the order are automatically lifted 6 months from the date the final report from the inquiry is issued, or the Regulator can lift it sooner. This power may only be used in relation to a registered charity if the charity has received public assistance (defined in clause 273).

Clause 256 - Restrictions on dealings following inquiry

736.     This clause gives the regulator similar powers to those in clause 255, but following rather than during an inquiry. An order under this clause has effect until revoked by the regulator.

Clause 257 - Restrictions on dealings: supplemental

737.     This clause is supplemental on clauses 255 and 256. It requires the Regulator to take all reasonable steps to give at least 14 days' notice to the provider and the person holding money or securities on its behalf. Contravention of an order is an offence punishable by fine.

Suspension and removal of officers

Clause 258 - Suspension during inquiry

738.     This clause applies where-

(a)     the regulator has reasonable grounds for believing the provider has failed to meet a standard and it is in the interests of tenants or its assets require protection;

(b)      as a result of an interim report from an inquiry, the regulator is satisfied that the provider has failed to meet a standard or its affairs have been mismanaged.

739.     The regulator may suspend an officer, employee or agent who it considers contributed to that failure or mismanagement. The suspension comes to an end 6 months after the final report, or the regulator can end it sooner. The regulator may only suspend an officer of a registered charity if it has received public assistance and must notify the Charity Commission.

Clause 259 - Removal or suspension following inquiry

740.     This clause gives the regulator similar powers to those under clause 258, but permits permanent removal following (rather than during) an inquiry, and suspension pending a decision on permanent removal. The regulator must take all reasonable steps to give at least 14 days' notice to the person and the provider.

Clause 260 - Suspension under section 258 or 259: supplemental

741.     This clause is supplemental to clauses 258 and 259. It allows the regulator to give directions to the registered provider about the performance of the suspended or removed person's functions or any other matter arising from the suspension, and allows the regulator to appoint a person to perform the suspended person's functions.

Clause 261 - Disqualification of removed person

742.     This clause disqualifies anyone from acting as an officer of a registered provider if they have been removed (not suspended) under clause 259, or under parts of previous Acts which now only apply to Wales. The regulator may waive a disqualification if the person applies for a waiver. If they do act as an officer while disqualified, their acts are not invalid by reason only of the disqualification - if their acts were automatically void, this could cause problems for the provider.

Clause 262 - Register of disqualified persons

743.     This clause requires the regulator to keep a register of disqualified persons and waivers which is publicly available.

Clause 263 - Acting while disqualified: offence

744.     This clause makes it an offence for a person to act as an officer while disqualified, which can make them liable to imprisonment or a fine.

Clause 264 - Acting while disqualified: other consequences

745.     This clause permits the regulator to require repayment of part or all of any benefits received by a person acting as an officer while disqualified.

Clause 265 - Removal of officers

746.     This clause replicates the effect of paragraphs 4 and 5 of Schedule 1 to the 1996 Act. The clause gives the regulator the power to remove officers from the governing bodies of registered providers that have been designated as non-profit providers by the regulator. Subsection (2) defines an officer for each of the constitutional forms of a non-profit provider, which are a registered charity, an industrial and provident society or a registered company.

747.     Subsections (3) to (9) specify the seven cases under which the regulator may remove an officer, which are:

    ?????????     where the officer has been adjudged to be bankrupt,

    ?????????     where the officer has made an arrangement with creditors,

    ?????????     where the officer has been subject to a disqualification order or a disqualification undertaking under the Company Directors Disqualification Act 1986 (or the equivalent statutory provision for Northern Ireland),

    ?????????     where the officer has been subject to an order under section 429(2) of the Insolvency Act 1986 (which occurs where a person fails to make a payment under a county court administration order under the County Courts Act 1984),

    ?????????     where the officer is disqualified under section 72 of the Charities Act 1993 from being a charity trustee (whether this is in relation to their position as an officer of the registered provider that is a charity or as an officer of a different charity),

    ?????????     where the officer is incapable of acting by reason of mental disorder,

    ?????????     where the officer is impeding the proper management of the registered provider by reason of absence or failure to act.

Clause 266 - Section 265: supplemental

748.     Clause 266 is supplemental on clause 265. It provides that before making an order under clause 265 the regulator must give the officer concerned and the registered provider 14 days' notice.

Clause 267 - Appeal against removal or suspension

749.     This clause gives anyone removed or suspended under clauses 257, 258 or 265 a right of appeal to the High Court.

Clause 268 - Appointment of new officers

750.     This clause gives the regulator the power to appoint a person as an officer of a non-profit registered provider. Subsection (1) specifies that the regulator may do this where:

    a.     it is to replace an officer removed under clause 265,

    b.     the registered provider has no officers on its governing body, or

    c.     the regulator thinks that the additional officer is necessary for the proper management of the registered provider's affairs.

751.     Subsection (2) specifies that "officer" for this clause has the same meaning as in clause 265. Subsection (3) specifies that the regulator may appoint more than a minority of the officers of a registered provider only if the provider has fewer officers than required by its constitution.

752.     Subsection (4) says that the regulator's power in subsection (1) overrides any restrictions in the registered provider's constitution on the eligibility requirements for officers, or the number of officers that the registered provider may have.

753.     Subsection (5) requires that an order made by the regulator under subsection (1) must specify the period for which, and the terms on which, the person is appointed as an officer. It also provides that the regulator may renew the appointment when the period specified in the order under subsection (1) expires, and that the new officer appointed by the regulator may resign or retire as allowed in the registered provider's constitution.

754.     Subsection (6) provides that an officer appointed by the regulator under subsection (1) has the same standing, in terms of rights, powers and responsibilities, as if he or she had been appointed as an officer under the constitution of the provider.

755.     Subsection (7) provides that the regulator may only make an appointment in relation to a registered charity if one of the conditions in clause 273 is fulfilled (which are the conditions that the registered charity has received either homes or financial assistance that are relevant to the functions of the regulator under the specified statutory provisions), and the regulator has consulted the Charity Commission before making the order under subsection (1).

756.     Subsection (8) enables the Secretary of State to provide for other circumstances in which the regulator may appoint more than a minority of the officers of a registered provider.

 
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