Select Committee on Delegated Powers and Regulatory Reform Eighth Report

Appendix 1: Housing and Regeneration Bill

MEMORANDUM BY THE DEPARTMENT FOR COMMUNITIES AND LOCAL GOVERNMENT

1.  This Memorandum is prepared by the Department for Communities and Local Government and identifies the provisions in the Housing and Regeneration Bill which confer power to make delegated legislation. It explains the purpose of the delegated power proposed; why the matter is to be dealt with in delegated legislation; and the nature and justification for any Parliamentary procedures which apply.

BACKGROUND AND PURPOSE OF THE BILL

2.  The purpose of the Housing and Regeneration Bill is to support the delivery of new housing, to secure the regeneration and development of land in England and to reform the regulation of social housing.

3.  The Bill reshapes the organisational arrangements for delivering housing and regeneration policy, and implements key aspects of the Government's consultation published in June 2007 - 'Delivering Housing and Regeneration: Communities England and the future of social housing regulation'. This explained the proposals for a new agency and offered stakeholders an opportunity to comments on its roles and responsibilities and suggested how it might operate. The Housing Green Paper, 'Homes for the Future: more affordable, more sustainable' published in July 2007, also set out the Government's plans to increase the supply of housing to deliver 3 million new homes by 2020.

4.  The Bill will also the regulation of social housing by establishing a new body to regulate social housing in England in line with the recommendations of Professor Martin Cave's report into the regulation of social housing "Every Tenant Matters - a review of housing regulation".

5.  The Bill also makes a number of reforms to the law relating to housing and related matters.

OVERVIEW OF THE BILL

6.  Part 1 of the Bill establishes an independent, new non-departmental public body called the "Homes and Communities Agency". It will bring together: functions of the Urban Regeneration Agency and the Commission for the New Towns[1]; the investment functions of the Housing Corporation; and the delivery of certain Departmental funding programmes.

7.  It will enable the new agency to improve the supply and quality of housing, including new social and affordable housing in sustainable, mixed tenure estates; to secure the development and regeneration of land or infrastructure in England; to support in other ways the creation, regeneration or development of communities in England or their continued well-being; and to contribute to the achievement of sustainable development in England, all with a view to meeting the needs of people living in England.

8.  Part 2 of the Bill establishes the Regulator of Social Housing as an independent organisation controlled by a board appointed by the Secretary of State. It will take over the Housing Corporation's responsibility for regulating registered social landlords in England, but with enhanced powers. The Department has announced its intention to extend the remit of the Regulator of Social Housing to local authority owned housing in England, although this will require further primary legislation.

9.  Part 3 of the Bill contains a number of reforms to housing law and related matters.

Chapter 1 of Part 3

10.  This part of the Bill applies to England and Wales, and establishes an obligation that every seller of a new home should before a sale is agreed provide the buyer with information on the sustainability of that home. This will consist either of a certificate of assessment of the home against approved standards for sustainability with a rating of its performance, or a statement that no such assessment has been made. It is this requirement for either a certificate of sustainability or a statement of non-assessment that is meant by the expression 'mandatory rating.

11.  Standards for sustainability already exist in the Code for Sustainable Homes, developed by the Department for Communities and Local Government and Building Research Establishment Ltd. The Code has operated hitherto on a voluntary basis in England only, beginning in spring 2007. It contains a number of sustainability categories that aim to cover the full range of sustainability concerns, social, economic and environmental, from site clearance onwards throughout the life of a building. Building according to given standards within each of the categories will earn a number of points, which will contribute in turn to an overall star rating of one to six against the Code. The star rating requires attainment of at least a minimum standard in each of the five compulsory categories- energy use and carbon dioxide emission, water use, materials, surface water run-off, and waste. The developer must also earn points in the further categories, pollution, health and well-being, management during construction and then occupation of the home, and ecology, but not necessarily in all four of them. Points and the star rating are assessed by a qualified person and a certificate given. Assessment will have begun at the design stage, and is finalised at the end of construction once it is verified that the building has been built according to specification. It is not proposed however that the attainment of a Code rating itself be mandatory. Code standards exceed in all cases the necessary minimum requirements of building regulations made under the Building Act 1984 (1984 c.55). It is for this reason that those developing new properties for sale will have the option of making a statement that there will be no sustainability assessment made.

12.  The aim of the provisions is to encourage the attainment of high sustainability standards in new properties by ensuring that buyers are given sustainability information and are able to compare sustainability performance. Consultation has taken place ending in October 2007 on the introduction of mandatory rating against the Code for Sustainable Homes. It is proposed to use the powers sought in the first instance to approve the present Code in England. The Code energy standards will provide underpinning for future building regulations imposing higher standards of energy performance, and, as building regulations requirements develop, the Code will be adjusted so that it continues to point to attainable best practice.

13.  Where assessment is chosen but the home is incomplete at sale, an interim certificate predicting the eventual rating must be first be given, and a final certificate must be given subsequently once it is practicable to do so.

14.  The provisions provide also for identification of the persons who are qualified to assess sustainability, the approval of accreditation schemes for assessors, registration of certificates, possible extension of mandatory rating to converted buildings and non-dwellings, enforcement, disclosure and ancillary matters.

Chapter 2 of Part 3

15.  This part of the Bill applies to England and Wales and contains provisions which amend section 27AB of the Housing Act 1985, which requires local authorities to co-operate with tenants who wish to take over the management of their homes and amend Schedule 3A of that Act which requires mandatory ballots of tenants before the disposal of certain housing stock. It contains a new provision, which will be inserted in the Housing Act 1985, which will require local authorities to co-operate with tenants who wish to arrange for the transfer of their homes to another social landlord.

16.  This part makes provision for the creation of Family Intervention Tenancies which are tenancies which will be available to local authority and registered social landlords which may be offered to persistent anti social tenants who have agreed to enter into a family intervention project programme and will receive behaviour support services.

17.  This part amends Part 4 of the Housing Act 1985 and Part 1 of the Housing Act 1988 to prevent the further creation of "tolerated trespassers" and to make provision for regularising the position of those former tenants that have acquired that status.

Chapter 3 of Part 3

18.  This part of the Bill applies to England and Wales and contains provisions which will implement the changes to the Housing Revenue Account system proposed in the Housing Green Paper to encourage local authorities to invest in new housing and to provide more local control over income and investment decisions. It also responds to an outstanding ECHR judgement on Gypsy and Traveller rights in relation to local authority sites.

19.  Part 4 of the Bill contains supplementary and final provisions such the power to make orders and regulations, consequential and transitional provisions, and provisions relating to the extent and commencement of the Bill.

ABBREVIATIONS AND ACRONYMS

20.  The following abbreviations and acronyms are used in this Memorandum-

the HC - the Housing Corporation;

the HCA - the Homes and Communities Agency;

the Regulator - the Regulator of Social Housing;

the URA - the Urban Regeneration Agency;

the ALA 1981 - the Acquisition of Land Act 1981;

the HAA 1985 - the Housing Associations Act 1985;

the LRHUDA 1993 - the Leasehold Reform, Housing and Urban Development Act 1993;

the HA 1996 - the Housing Act 1996.

PROVISIONS FOR DELEGATED LEGISLATION

PART 1: THE HOMES AND COMMUNITIES AGENCY

Clause 9 and Schedule 2 : Acquisition of Land

Power conferred on: The HCA and the Secretary of State

Power exercisable by: Order

Parliamentary procedure: None, or in certain cases Special Parliamentary Procedure

21.  Clause 9 provides that the HCA may acquire land compulsorily if authorised to do so by the Secretary of State. Clause 9 also gives effect to Schedule 2, which makes further provision in relation to the acquisition of land by the HCA. The procedure for compulsorily acquiring land requires the HCA to make a compulsory purchase order ("CPO"), which the Secretary of State may subsequently confirm, with or without modifications.

22.  Although the enabling power is set out on the face of the Bill, the order making power itself is incorporated by virtue of Schedule 2, which in turn applies the ALA 1981 to the compulsory acquisition of land under clause 9 with modifications (which include specifying the HCA as an acquiring authority for certain provisions of the ALA 1981). The ALA 1981 sets out the procedure to be followed in the preparation, making and confirmation of a CPO. This is an accepted procedure which has been incorporated into most enabling Acts which authorise the compulsory purchase of land by local and public authorities, and government departments. The procedure set out in the ALA 1981 is also incorporated in the existing provisions in LHRUDA 1993, on which this power is modelled.

23.  Statutory safeguards are built into the procedure, which require certain persons to be notified of the order and also specify publicity requirements enabling any person to make an objection. The Secretary of State will consider the objections before a decision is made as to whether or not to confirm the order. If an objection is made, which is not withdrawn, the Minister is required to hold a public inquiry or otherwise to arrange for the objector to be heard by an inspector. The Minister can only proceed by written representation by consent. Given the safeguards enshrined in the formal procedural requirements it is our view that it is not necessary for this power to be subject to any formal Parliamentary scrutiny procedure.

24.  In accordance with the separate procedure set out in the ALA 1981 in respect of land forming part of a common, open space or fuel or field garden allotment, an order for the compulsory acquisition of such land will be subject to special parliamentary procedure unless the Secretary of State is satisfied that equivalent land has been or will be given in exchange or that other limited circumstances apply and certifies accordingly. Special parliamentary procedure would ensure a high level of parliamentary scrutiny in such cases.

CLAUSE 11: POWERS TO DEAL WITH LAND ETC. AND SCHEDULE 3: MAIN POWERS IN RELATION TO LAND OF THE HCA

Part 2 of Schedule 3: Powers to extinguish public rights of way

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: None

25.  Part 2 of Schedule 3 confers power on the Secretary of State to extinguish by order any public right of way over land of the HCA and sets out the procedure for making the order. The power to make the order and the order making procedure is on the face of the Bill [and, in our view, is legislative rather than delegated.

26.  The Secretary of State may only exercise this power if satisfied that an alternative right of way has been, or will be, provided, or that an alternative is not required. In addition, there are sufficient procedural safeguards set out in the legislation which deal openly with the extinguishment of public rights of way. The Secretary of State must publish a notice which must also be served on both the planning authority in whose area the land is situated and the relevant highway authority, stating the effect of the order and provide sufficient time (not less than 28 days) to enable objections to the order to be made. The Secretary of State not only has a duty to consider objections which are not withdrawn in the prescribed manner but also has a power, before making a final decision, to give the objector an opportunity to appear before, and be heard by, a person appointed for the purpose by the Secretary of State. The Secretary of State also has the power before a final decision is made to hold a public inquiry into the objection made under this Part if the Secretary of State considers that the matters raised by the objection require investigation by inquiry.

27.  In addition, where an order under this Part is made and any electronic communications apparatus is installed for the purposes of an electronic communications code network under, in, on, over, along or across the land over which the right of way subsisted, provision is made for the operator to remove, or to serve notice on the HCA of intention to abandon, the apparatus within a three month period from the date the right of way is extinguished. The operator is entitled to recover the expense of providing any substitute apparatus from the HCA as a result of the removal or abandonment of the apparatus.

28.  The power to make the order together with the statutory order making procedure is broadly similar to provisions contained in other legislation (such as the Regional Development Agencies Act 1998) which are followed as accepted and familiar procedure. In our view it is not necessary for this power to be subject to any formal parliamentary scrutiny procedure. Adequate procedural safeguards exist for public notification and opportunities for fair representation by all the parties to the order when an objection has been made.

29.  The power to make an order under this Part includes a standard power to vary or revoke such orders and make supplementary, incidental consequential, transitional, transitory or saving provision.

Part 3 of Schedule 3: Powers in relation to burial grounds and consecrated land etc.

Power conferred on: Secretary of State

Power exercisable by: Regulations

Parliamentary procedure: Negative resolution

30.  Part 3 contains a regulation making power in relation to the use of burial grounds, consecrated land and any other land connected to religious worship which at the time of acquisition included a church or other building (or the site of a church or building) used for worship. The regulations may set out "prescribed requirements": in the case of burial grounds which have been used for the burial of the dead, the power of the HCA to use the land does not arise until the prescribed requirements have been complied with; in the case of consecrated land and other land connected to religious worship, use is subject to the prescribed requirements.

31.  The regulations should deal with both general and incidental matters relating to the disposal of land (paragraph 22) as well as make provision in respect of the removal and reinterment of human remains and the disposal of monuments (paragraph 23). The regulations must secure that any use of land which needs to comply with the Regulations is, so far as possible, subject to an "appropriate level of control".

32.  Specific provision has been made for regulations setting out prescribed requirements in relation to the removal and reinterment of human remains and the disposal of monuments. Paragraph 23 requires the persons in whom the land is vested to publish notice of their intention to carry out the removal and re-internment of any human remains or the disposal of any monuments. The regulations must make provision for personal representatives or relatives of any deceased persons to enable them to undertake the removal and reinterment of the remains of the deceased and the disposal of any monument commemorating the deceased and also requiring also the persons in whom the land is vested to meet expenses (subject to a prescribed amount).

33.  The regulations also require compliance with such reasonable conditions as may be imposed, in the case of consecrated land, by the bishop of the diocese in respect of certain matters and, in any case, with any directions given by the Secretary of State.

34.  These provisions need to be left for delegated legislation. Despite the fact that no regulations have been made under the equivalent power in LHRUDA 1993 power, it is our view that the provisions are still required given the HCA has wider objects than the URA and as a consequence the likelihood of acquiring this type of land is greater. It is therefore anticipated that regulations will be made under this provision in the Bill. There is precedent for future regulations, as similar regulations have effect under the Town and Country Planning Act 1990, (the Town and Country Planning (Churches, Places of Religious Worship and Burial Grounds) Regulations 1950 (S.I. 1950/792)). In our view regulations made under the power in the Bill are suitable for the negative resolution procedure because they will make detailed provisions in line with the detailed requirements set out on the face of the Bill, hence it would not be good use of parliamentary time to require a higher level of scrutiny.

CLAUSE 12 AND SCHEDULE 4: POWERS IN RELATION TO, AND FOR, STATUTORY UNDERTAKERS

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary Procedure: None, or in certain cases Special Parliamentary Procedure  

35.  Part 1 of Schedule 4 enables the Secretary of State and the appropriate Minister to make an order where a notice for the extinguishment of rights of undertakers, or the removal of apparatus belonging to undertakers, has been served by the HCA on a statutory undertaker, and it is opposed by the undertaker. The order may embody the provisions of the notice with or without modifications. This Part is modelled on paragraph 12 of Schedule 20 to the LHRUDA 1993. Orders under this Part would be made in respect of a private dispute between the HCA and a statutory undertaker so it is our view that they do not require parliamentary scrutiny.

36.  Part 2 of Schedule 4 enables the Secretary of State and the appropriate Minister to make an order where a statutory undertaker serves a notice on the HCA claiming that development to be carried out on HCA land will require the removal or re-siting of the undertaker's apparatus and therefore claiming the right to enter on the land and carry out such works, and the HCA oppose the notice. The order may either confer the right to enter the land and carry out works for the removal, or re-siting, of the apparatus or confer modified rights. This Part is modelled on paragraph 14 of Schedule 20 to the LHRUDA 1993. Orders under this paragraph Part are, again, in respect of a private dispute between the HCA and a statutory undertaker so it is our view that they do not require parliamentary scrutiny.

37.  Part 3 of Schedule 4 enables the Secretary of State and appropriate Minister to provide for an extension or modification of the functions of particular statutory undertakers in relation to land in respect of which any of the HCA functions under Part 1 of the Bill are being, or have been, exercised. This power is only to be exercised where the undertaker or the HCA has made representations to the Secretary of State and appropriate Minister on the subject, and where certain conditions are satisfied. A detailed procedure is set out in subsequent provisions, which includes a requirement on either the undertaker or the HCA (depending on who made the representation) to publish a notice and serve copies, as directed by the Secretary of State and appropriate Minister, and a duty on the Secretary of State and appropriate Minister to consider objections. The Secretary of State and appropriate Minister also have various discretionary powers in relation to the procedure. Examples of orders which may be made under this Part are given in paragraph 18 and include an order giving powers to statutory undertakers to acquire land (whether compulsorily or by agreement) and to apply enactments relating to the acquisition of any such land.

38.  This Part of the Schedule is modelled on paragraphs 15, 16 and 18 of the LHRUDA 1993. Orders under this Part of the Schedule are subject to special parliamentary procedure in all cases, so are subject to a high degree of parliamentary scrutiny, which we consider appropriate because the power is to extend or modify the functions of statutory undertakers and may therefore alter their statutory powers. The provisions of the Statutory Orders (Special Procedure) Act 1945 (as amended) apply to any orders subject to special parliamentary procedure.

39.  Part 4 of Schedule 4 gives the appropriate Minister power to relieve a statutory undertaker of the need to meet an obligation in relation to the carrying on of their undertaking where the undertaker has made representations to the appropriate Minister on the subject and where the appropriate Minister is satisfied that meeting some or all of the obligation has become impracticable as a result of particular acts and events under the Bill (for example, the extinguishment of a right or imposition of any requirement). The appropriate Minister may direct the undertaker to publish a notice and/or serve notices on persons, or descriptions of persons, specifying when any objections must be made and the manner in which they should be made. If an objection is made and not withdrawn, and the matter is not otherwise dealt with, the Minister has a duty to consider the grounds of the objection. Subsequent provisions set out procedural stages to be followed by the Minister at their discretion. This Part is modelled on paragraphs 17 and 18 of the LHRUDA 1993. Orders under this Part of the Schedule are subject to special parliamentary procedure in cases where an objection to the making of the order is properly made and not withdrawn, so in such cases an order is subject to a high degree of parliamentary scrutiny, which we consider appropriate. Where an objection is not properly made, or is withdrawn before the order is made, the order will not be subject to special parliamentary procedure and it is our view that it is not necessary for such an order to be subject to parliamentary scrutiny in the absence of a valid objection.

40.  Paragraph 40 of Part 4 of the Schedule includes power for the relevant Secretary of State and/or appropriate Minister to make orders under this Schedule which make supplementary, incidental, consequential, transitional, transitory or saving provisions. This is modelled on paragraph 15(5)(d) of LHRUDA 1993, although in that Act the implication is that the power only applies in relation to orders extending or modifying a statutory undertaker's powers and duties. A provision such as this is a standard provision in relation to a power to make orders and we consider it appropriate to apply to all orders under this Schedule, without it affecting the level of formal procedure in relation to those orders.

CLAUSES 13 TO 18: POWERS OF THE SECRETARY OF STATE TO MAKE DESIGNATION ORDERS

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: Negative Resolution for clause 13 orders; Affirmative resolution for clause 14(8) orders; Road Traffic Regulation Act 1984 applies to orders under clause 17

41.  Clause 13 enables the Secretary of State by order to designate an area in England provided one of two conditions are met. Condition 1 is that the area is suitable for development and it is appropriate for the HCA to be the local planning authority for the whole or any part of the area. Condition 2 is that it is appropriate for the provisions in relation to the adoption of a private street in the designated area (clauses 15 and 16) and/or the making of a traffic regulation order in relation to a private street in the designated area (clause 17), to apply in relation to that area.

42.  A designation order may provide that the HCA will be the local planning authority for the whole or any part of the designated area for all, or specified, permitted purposes and for all, or specified, kinds of development.

43.  There is a general power in clause 14 to apply certain provisions relating to local planning authorities to the HCA where it is to be the local planning authority for the area designated in the order. In addition an order may confer other planning-related functions (specified in sub clause (7) as "relevant functions") on the HCA. The order may provide that the HCA may exercise these planning-related functions instead of, or concurrently with, the local authority or any other person who exercises those functions.

44.  A designation order may also specify that any enactment is to apply to the HCA with or without modification, or that any enactment is not to apply to the HCA.

45.  This order making power is based on existing provisions in the LRHUDA 1993 (sections 170 to 173). The power to designate an area under the LRHUDA has been used once previously in the Milton Keynes (Urban Area and Planning Functions) Order 2004, S.I. 2004/932.

46.  The order making power in clause 13 differs from the power in section 170 of the LRHUDA 1993 in two main ways. Firstly under the Bill any area in England may be designated where the Secretary of State considers the area is suitable for development and one of the conditions is met, unlike under LRHUDA where only urban areas in England, suitable for urban development, and where one of the conditions is met, may be designated. Secondly, under the Bill the HCA may have additional planning functions conferred upon it in relation to the designated area. In particular it may be made responsible for the preparation and maintenance of the Local Development Framework. This will enable the HCA to have a role in the strategic planning of an area, as well as control over individual proposals for development.

47.  In addition to the designation order making power under the LRHUDA 1993, there is a similar power under section 149 of the Local Government, Planning and Land Act, which enables the Secretary of State to provide by order that an urban development corporation shall be the local planning authority for the whole or any part of its area. This power is subject to the negative resolution procedure. Examples of two recent such orders are; the London Thames Gateway Development Corporation (Planning Functions) Order 2005, S.I. 2005/2721 and the Olympic Delivery Authority (Planning Functions) Order 2006, SI 2006/2185.

48.  It is therefore an established procedure and power which in our view is suitable to be reserved to delegated legislation. The negative resolution procedure allows for maximum flexibility with an appropriate level of Parliamentary control which enables the HCA to promote its objects of improving the supply of housing and securing the regeneration or development of land in England.

49.  In addition, under sub clause 8 of clause 14, the Secretary of State has power to amend the definition of "planning related provisions" or "relevant functions" (as defined in sub clause (7)). An order under this power will be subject to the affirmative resolution procedure by virtue of clause 303(3)(a) as it may amend primary legislation.

50.  Where a designation order provides for clause 17 to apply in relation to a designated area, the Secretary of State may make a traffic regulation order in relation to a private street if the HCA makes representations to the Secretary of State that an order should be made and the Secretary of State considers that the traffic authority do not intend to make such an order in relation to that private street. An order under this power may contain any provision in relation to the private road which the Secretary of State could have made in a traffic regulation order if the Secretary of State had been the traffic authority. The Road Traffic Regulation Act 1984 applies to an order under clause 17, including the order-making procedure set out in that Act.

CLAUSE 26: FINANCIAL LIMITS

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: Draft to be approved by a resolution of the House of Commons

51.  This clause provides a ceiling on the maximum borrowings of the HCA and is coupled with an order making power which enables the Secretary of State to increase the borrowing limit up to a maximum of £3,000 million. The clause is modelled on paragraph 7 of Schedule 18 to the LRHUDA 1993 and also draws on section 93 of the HAA 1985 which respectively place financial limits on the borrowings of the URA and the HC. Presently the upper limit on the aggregate borrowings of the URA stands at £2,000 million. In the case of the HC the upper limit of its aggregate borrowings stands at £2,300 million. Clause 26 adopts this figure.

52.  With the expanded remit of the new Agency and the likelihood that it will use its investment powers extensively it is possible that it may have to increase its borrowing from time to time. Accordingly an order making power is considered necessary to give effect to such an important financial change whilst maintaining a suitable level of Parliamentary scrutiny through the laying of the draft instrument for approval by the House of Commons.

CLAUSE 28: DIRECTIONS AS TO SURPLUS FUNDS

Power conferred on: Secretary of State

Power exercisable by: Direction

Parliamentary procedure: None

53.  This clause is modelled on paragraph 6 of Schedule 18 to the LHRUDA 1993. It enables the Secretary of State to direct the Agency to pay to the Secretary of State such sums as may be specified, that the Agency may hold by way of surplus in its capital or revenue accounts. Before making any direction the Secretary of State must consult the Agency.

54.  This provision is of an administrative nature and given that the requirement to consult provides an inbuilt safeguard to ensure the Secretary of State acts reasonably before coming to a decision about the HCA's surplus funds and exercising the direction making power, it is our view that it is not necessary for this power to be subject to any formal Parliamentary scrutiny procedures.

CLAUSE 39: INFORMATION IN RELATION TO SOCIAL HOUSING

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: Negative Resolution

55.  This provision enables the Secretary of State to order the HCA to produce information from time to time about its provision of accommodation for the purposes of social housing and the consequences of that accommodation being social housing. For example, the intention is that where funding is provided by the HCA for the purposes of providing housing, the HCA will be required to notify the recipient about which housing will be social housing and thus should be transferred to a registered provider of social housing, if the recipient is not such a provider.

56.  The need for subordinate legislation is because this will allow flexibility about the level of detail; the frequency at which and to whom such information should be disclosed and so would not be suitable for detailed provision to be made on the face of the Act.

57.  As this is essentially an administrative procedure, it is our view that the negative resolution procedure provides an adequate level of scrutiny.

CLAUSE 49: DIRECTIONS BY THE SECRETARY OF STATE

Power conferred on: Secretary of State

Power exercisable by: Direction

Parliamentary procedure: None

58.  Any directions given under Part 1 of the Bill may be of a general or specific nature and must be published as soon as reasonably practicable after they have been given, except in the case of directions given under paragraph 7 of Schedule 1 (HCA's procedure or that of its committees or sub-committees).

59.  The Department considers it to be necessary to have such direction making powers in circumstances where a body with significant responsibilities and budget is not acting in a way that is consistent with the objects and powers with which it has been vested. The direction making power provides the flexibility to enable the Secretary of State to act quickly in particular circumstances. For example where, the HCA might be at risk of breaching state aid rules.

CLAUSES 51 AND 52: ABOLITION OF THE URA AND THE CNT

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: None

60.  These clauses enable the Secretary of State to abolish the URA and the CNT on an appointed date. The HCA will assume all the property rights and liabilities of the URA and CNT as of the date of dissolution and as provided in accordance with the transfer scheme made under clause 53 and Schedule 6.

61.  This is an administrative procedure and accordingly the Department considers that there is no requirement for any parliamentary procedure.

CLAUSE 55: INTERIM ARRANGEMENTS

Power conferred on: Secretary of State

Power exercisable by: Notice

Parliamentary procedure: No procedure

62.  This clause enables the Secretary of State to require the URA or the Commission for the New Towns to provide staff, premises, facilities or other assistance on a temporary basis to the HCA or the Welsh Ministers. It is intended to allow arrangements to be made to facilitate the establishment of the HCA and the transfer of functions to it.

63.  This is an administrative procedure and accordingly the Department considers that there is no requirement for any parliamentary procedure.

PART 2: THE REGULATOR OF SOCIAL HOUSING

64.  The delegated powers in the clauses in this Part are to be exercised by the Secretary of State, the Regulator or Treasury Ministers.

CLAUSE 66: THE DISSOLUTION OF THE HOUSING CORPORATION

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: Negative Resolution

65.  This clause enables the Secretary of State to make an order abolishing the HC on an appointed date. Any order made under this provision must provide for the transfer of the property rights and liabilities of the HC and may make consequential amendments of enactments referring to the HC. An order may also require the HC to assist the Regulator pending dissolution.

66.  The provision is necessary because the details arrangements, including the timing, for the dissolution of the HC and the transfer of its assets, which will be divided between the HCA and the Regulator, are not suitable for inclusion in primary legislation.

67.  Although an order made under this provision is essentially an administrative matter relating to the abolition of the HC the fact that such order can make consequential amendments to legislation means that it should be subject to parliamentary scrutiny and the Department considers that the negative resolution procedure is appropriate.

CLAUSE 71: LOW COST HOME OWNERSHIP

Power conferred on: Secretary of State

Power exercisable by: Regulations

Parliamentary procedure: Affirmative Procedure

68.  Clause 71 defines of "low cost home ownership accommodation" by reference to the conditions specified in sub clauses (2) and (3) and the definitions of "shared ownership arrangements" and "equity percentage arrangements" in sub clauses (4) and (5) Sub clause (7) gives the Secretary of State the power to make regulations amending any of the elements of the definition.

69.  The delegated power is necessary to ensure that the legislation can continue to be effective by providing the necessary flexibility to allow the regulatory regime to take account of changing circumstances in the provision of social housing.

70.  Because the exercise of the power will alter primary legislation the Department considers that it is appropriate that it should be subject to the affirmative procedure.

CLAUSE 73: REGULATIONS

Power conferred on: Secretary of State

Power exercisable by: Regulations

Parliamentary procedure: Affirmative Procedure

71.  Clause 73 gives the Secretary of State the power to make regulations to provide that specified property or property of a specified class is or is not to be treated as social housing for the purposes of Part 2 of the Bill. Social housing is defined in the Bill as either "low cost rental accommodation" (defined in clause 70) or "low cost home ownership accommodation" (defined in clause 71).

72.  The regulations will allow the Secretary of State to provide that property is to be treated as social housing even if it does not satisfy the definitions contained in clauses 70 and 71, where he thinks that the property is of a kind or is provided in circumstances that serve the needs of a group whose needs are not adequately served by the commercial housing market.

73.  The delegated power is necessary to ensure that the legislation can continue to be effective by providing the necessary flexibility to allow the regulatory regime to take account of changing circumstances in the provision of social housing.

74.  Because the exercise of the power will affect the application of primary legislation the Department considers that it is appropriate that it should be subject to the affirmative procedure.

CLAUSE 77: LEAVING THE SOCIAL HOUSING STOCK: REGULATOR'S DIRECTION

Power conferred on: The Regulator

Power exercisable by: Direction

Parliamentary procedure: None

75.  This clause will give the Regulator the power, if requested to do so by a registered provider, to make a direction that a specified dwelling which has ceased to fall within the definition of low cost rental accommodation or low cost home ownership shall cease to be social housing.

76.  The delegated power is necessary to ensure the efficient management of the social housing stock. The exercise of the power by the Regulator would be subject to the Regulator's fundamental objectives which are set out in clause 88 of the Bill.

77.  This provision is of an administrative nature and given that it can only be exercised on the application of the provider the Department considers that it is not necessary for this power to be subject to any formal Parliamentary scrutiny procedures.

CLAUSE 78: HOUSING STOCK UNDER THE HOUSING ACT 1996

Power conferred on: Secretary of State

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

78.  Clause 78 provides that all property owned by a registered social landlord will be social housing for the purposes of Part 2 of the Bill, even if it does not satisfy the requirements set out in clause 71(1), unless it ceases to be social housing in accordance with the provisions of clauses 74 to 77 of the Bill or it falls within one of the exceptions specified in the clause. Four categories of housing are specified in sub clauses (4) to (7), and sub clause (8) gives the Secretary of State power to make regulations specifying other kinds of property that will constitute exceptions for the purposes of the clause.

79.  The delegated power is necessary because some registered social landlord have a varied portfolio of properties that they have built up over the years and may have properties in respect of which regulation would not be appropriate. Some of these types of property have been identified in the Bill, but it is recognised that this list may not be complete so the power is necessary to make any adjustments that are needed.

80.  As this is essentially a tidying up exercise, the Department considers that the negative resolution procedure provides an adequate level of scrutiny.

CLAUSE 114: LOCAL AUTHORITY NON-REGISTRABLE BODIES

Power conferred on: Secretary of State

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

81.  Clause 114 sets out which providers of social housing are not eligible for registration with the regulator under clause 113. These are a local housing authority, a county council or a body controlled by such an authority. Sub clause (5) gives the Secretary of State the power to make regulations defining when a body is controlled by a local housing authority or a county council for the purposes of the exception.

82.  Because there is no definition of "control" in the Bill the issue of whether a body is or is not controlled by a local housing authority or a county council will be determined by the regulator having regard to both fact and law, and his decision will be subject to review by the Courts. However, it is possible that arrangements may be put in place which would not satisfy the test of control as provided in the Bill and we would want the flexibility to make regulations to ensure that they were.

83.  Although the effect of the regulations would be to modify the application of primary legislation, the modification proposed is essentially of a limited nature and the Department considers that the negative resolution procedure is appropriate.

CLAUSE 115: PROFIT-MAKING AND NON-PROFIT ORGANISATIONS

Power conferred on: Secretary of State

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

84.  Clause 115 sets out the conditions that will determine whether a body is a non-profit organisation or a profit-making organisation for the purposes of registration as a provider of social housing. A non-profit organisation, other than a registered charity, must satisfy three conditions one of which is that a purpose of the body is the provision of or the management of social housing, another requirement is that any other purpose of the body must be connected with or incidental to the provision of social housing. Sub-clause (7) gives the Secretary of State the power to make regulations to provide that a specified purpose is or is not to be treated as connected with or incidental to the provision of social housing. A body which is not eligible for registration as a non-profit organisation is treated as a profit-making organisation.

85.  The delegated power is necessary to ensure that the regulatory regime is sufficiently flexible to adapt to the changing circumstances of providers of social housing.

86.  Although the effect of the regulations would be to modify the application of primary legislation, the modification permitted by the power would be of a limited nature and would only affect the ability or otherwise of new non-profit organisations to register and the Department considers that the negative procedure is appropriate for the regulations.

CLAUSE 127: DIRECTIONS

Power conferred on: The Regulator

Power exercisable by: Direction

Parliamentary procedure: None

87.  This clause gives the Regulator the power to give directions to registered providers about the preparation of their accounts. The power must be exercised with a view to ensuring that accounts are prepared in proper form and present a true and fair view of the state of affairs of each registered provider in relation to its social housing activities and the disposition of funds and assets which are or have been in its hands in connection with those activities.

88.  The Regulator may make a direction that applies generally or only to specified cases, circumstances or registered providers, but a direction that relates to more than one registered provider can only be made after the Regulator has consulted one or more bodies that appear to the Regulator to represent the interests of registered providers.

89.  The delegated power is necessary to ensure that the Regulator has access to the appropriate information to carry out its regulatory functions.

90.  This provision is of an administrative nature and given the requirement for the Regulator to obtain the consent of the Secretary of State where the direction is to apply to more than one registered provider, in the Department's view it is not necessary for this power to be subject to any formal Parliamentary scrutiny procedure.

CLAUSE 131: EXEMPT COMPANIES : REPORTING ACCOUNTANT

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: Negative Resolution

91.  Clause 131 provides which persons are eligible to prepare the accountants report required by clause 129 for companies, other than registered charities, that are exempt from the audit requirements of the Companies Act 2006. One of the conditions of eligibility is that the person is a member of one of the bodied listed in sub clause (4). Sub clause (5) gives the Secretary of State the power to make an order amending the list of bodies in sub clause (4).

92.  The delegated power is necessary to allow the list of bodies to be amended to take account of changing circumstances. Sub clause (4) lists nine bodies, other bodies may emerge that would be suitable for inclusion in the list, some of the bodies listed may change their names or merge with other bodies and it would be desirable to be able to amend and update the list without the need for primary legislation.

93.  As this is essentially an administrative procedure, the Department considers that the negative resolution procedure provides an adequate level of scrutiny.

CLAUSES 144 AND 145: PREPARATORY STEPS: NOTICE AND MORATORIUM

Power conferred on: Secretary of State

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

94.  Clauses 144 and 145 set out the steps that must be taken in order to bring a moratorium on the disposal of land by the registered provider. Clause 144 provides that the steps specified in the table, which relate to the winding up of a company or an industrial and provident society or the appointment of an administrator only have effect if the person specified has given a notice to the Regulator. Clause 145 provides that the steps specified in the table have the effect of beginning a moratorium on the disposal of land by the registered provider.

95.  In respect of each clause the Secretary of State has power to make an order which prescribes that an additional step to enforce a security over land held by a registered provider will be subject to the requirement to give notice under clause 144 or will lead to the start of the moratorium.

96.  The power is necessary to ensure that the moratorium powers remain effective by providing a means amending them to take account of changes in insolvency practice with the need for primary legislation and in this regard it is significant that not all the steps specified in the table in clause 145 relate to statutory procedures. The Department considers that the negative procedure is appropriate for such orders.

CLAUSE 168: EXTENSION OF CLAUSES 166 AND 167

Power conferred on: Secretary of State

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

97.  Clauses 166(Transfer of property) and 168 (Supplemental) make provision about the transfer of property by the Regulator from a registered provider that has been dissolved or wound up. Clause 168 gives the Secretary of State power to make regulations extending these provisions to a registered provider which is a charity but is not a registered company.

98.  The delegated power is required so as to provide the flexibility to extend this provision to registered providers that are charities if it becomes apparent that this is desirable.

99.  The Department consider that the negative resolution procedure provides the necessary level of Parliamentary oversight for this power.

CLAUSES 191, 192 AND 194: PROVISION OF SOCIAL HOUSING, MANAGEMENT AND CONSULTATION

Power conferred on: The Regulator

Parliamentary procedure: None

100.  Clauses 191 and 192 of the Bill give the Regulator the power to set standards which registered providers of social housing may be required to comply with. Standards set by the Regulator can only relate to the nature, extent and quality of the accommodation or facilities provided by them. Sub clause (2) of clause 191 sets out a non-exhaustive list of the matter that may be specified in a direction. These range from the nature and extent of the housing demands to be addressed to the level of rent and the registered provider's contribution to the environmental, social and economic well being of the area in which there property is situated. Clause 192 also allows the Regulator to set standards for non-profit registered providers relating to the management of their financial and other affairs.

101.  Standard may be of general application or make different provision for or relate to specified cases, circumstances or areas. Before setting standards the Regulator is required by clause 194 to consult organisations representing the interests of registered providers and tenants, the HCA and the Secretary of State.

102.  The delegated power is necessary for two reasons. The first is that it would not be appropriate to set out the detailed standard in primary legislation. The second is that it is considered necessary that this power should be given to the Regulator to enable it to have the flexibility to introduce or modify standards in the light of changing circumstances.

103.  The Department does not consider that there is any need for any Parliamentary procedure in respect of the this power as Secretary of State's power of direction in clause 195 provides as adequate safeguard.

CLAUSE 193: CODE OF PRACTICE

Power conferred on: The Regulator

Parliamentary procedure: None

104.  Clause 193 gives the Regulator the power to issue a code of practice which relates to a matter addressed by a standard under clause 191. As the Regulator's power to set standards is not subject to any Parliamentary process the Department does not consider it appropriate to require any formal Parliamentary procedure in respect of the code of practice.

CLAUSE 195: DIRECTION BY THE SECRETARY OF STATE

Power conferred on: Secretary of State

Power exercisable by: Direction

Parliamentary procedure: None

105.  Clause 195 allows the Secretary of State to issue directions to the Regulator, in limited circumstances, for two purposes. The first is to require the Regulator to exercise the power to set standards, the second is to direct the Regulator about the content of a particular standards.

106.  The power is necessary to ensure that the Regulator does exercise the power to set standards and will allow the Secretary of State to specify the content of those standards should he consider that necessary.

107.  This provision broadly replicates section 76 of the Housing Associations Act 1985 which gave the Secretary of State power to issue directions to the Housing Corporation about the performance of its functions. That power is not subject to any Parliamentary procedure.

CLAUSE 199: INSPECTION

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: Negative resolution

108.  Clause 199 gives the Regulator the power to arrange for an inspection to be made in respect of a registered provider's performance of its functions in relation to the provision of social housing or its financial affairs. Sub-clause 6 gives the Secretary of State power to make an order to authorise the Regulator to charge fees for inspections. Before making an order the Secretary of State must consult the Regulator, one or more bodies representing the interests of registered providers, and the Audit Commission. If an order is made the Regulator will be responsible for prescribing the scale of fees to be charged after consultation with the Secretary of State and bodies representing the interests of registered providers.

109.  The delegated power is required to give further flexibility in the regulatory regime by making the decision as to whether fees should be charged for inspections one that can be taken after the Bill has passed in to law and making that decision one which is subject to further Parliamentary scrutiny through the negative resolution procedure.

CLAUSE 209: INDUSTRIAL AND PROVIDENT SOCIETIES: CHANGE OF RULES

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: Negative Resolution

110.  Clause 209 provides that the Regulator's consent is required prior to any change of rules by an industrial and provident Society which relates to the matters listed in sub clause (2). This refers to any change which alters the society's objects, makes provision about the distribution of assets to members or enables the association to become, or cease to be an associate or subsidiary of another body. Sub clause (8) gives the Secretary of State power to make an order to amend the list of matters in sub clause (2).

111.  Clause 209 is based on a power contained in paragraph 9 of Schedule 1 to the 1996 Act which required that the HC's consent was required in respect of any change to the rules of an industrial and provident society, other than a change of name or registered office. Clause 209 imposes more limited requirements and the delegated power is necessary to ensure that the regulatory regime remains robust.

112.  Although the effect of the order would be to modify the application of primary legislation, the modification permitted by the power would be of a limited nature and the Department considers that the negative procedure is appropriate for the order.

CLAUSE 211: COMPANIES: CHANGE OF ARTICLES

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: Negative Resolution

113.  Clause 211 provides that the Regulator's consent is required prior to any change to the articles of association of a registered company which relates to the matters listed in sub clause (2). This refers to any change which alters the company' objects, makes provision about the distribution of assets to members or enables the company to become, or cease to be an associate or subsidiary of another body. Sub clause (8) gives the Secretary of State power to make an order to amend the list of matters in sub clause (2).

114.  Clause 211 is based on a power contained in paragraph 11 of Schedule 1 to the 1996 Act which required that the HC's consent was required in respect of any change to the memorandum and articles of association of a company, other than a change of name or registered office. Clause 211 imposes more limited requirements and the delegated power is necessary to ensure that the regulatory regime remains robust.

115.  Although the effect of the order would be to modify the application of primary legislation, the modification permitted by the power would be of a limited nature and the Department considers that the negative procedure is appropriate for the order.

CLAUSE 227: IMPOSITION

Power conferred on: Secretary of State

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

116.  Clause 227 sets out the procedure to be followed by the Regulator when serving a penalty notice. A penalty notice must specify the grounds on which the penalty is imposed, the amount of the penalty, how the penalty must be paid, and any interest to be paid. In the event of late payment and the period within which it must be paid. Sub-clause (5) specifies that the Secretary of State shall make regulations about the period within which any penalty must be paid and gives the Secretary of State power to make other regulations about the form and content of a penalty notice and the manner in which a penalty notice is to be given.

117.  The delegated power is necessary for three reasons. The first is to ensure that it is the Secretary of State and Parliament through the negative resolution procedure that will determine the period within which a penalty will be required to be paid. The second reason is to provide for flexibility in setting the period both in setting the initial period and allowing for an opportunity to adjust later having regard to experience. The third reason is to allow the Secretary of State the flexibility to specify the form and content of a penalty notice and other procedural matters which are not appropriate for primary legislation.

118.  As this is essentially an administrative procedure, the Department considers that the negative resolution procedure provides an adequate level of scrutiny.

CLAUSE 228: AMOUNT

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: Negative Resolution

119.  Clause 228 specifies the maximum amount of penalty that may be imposed by the Regulator for any Case specified in clause 226, apart from case 6 where the penalty is limited to the maximum fine that could be imposed by a magistrate's court. Sub clause (2) sets the maximum penalty at £5,000. Sub-clause (3) allows the Secretary of State to make an order to amend the amount of penalty specified in sub-clause (2) .

120.  The delegated power is necessary to give the flexibility to change the maximum amount of the penalty without the need for further primary legislation.

121.  As this is essentially an administrative procedure, the Department considers that the negative resolution procedure provides an adequate level of scrutiny.

CLAUSE 233: ENFORCEMENT

Power conferred on: Treasury Ministers

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

122.  Sub clause (2) gives the power to Treasury Ministers power to make regulations authorising the Regulator to charge interest on any penalty not paid during the period specified under clause 227 or to impose additional penalties where the penalty is not paid during that period.

123.  The delegated power is necessary to give the flexibility to allow the flexibility to allow the Regulator to charge interest or impose additional financial penalties. As the matters concerned relate to finance it is appropriate that this should be under the control of the Treasury and there are many precedents for a provision of this type.

124.  The Department considers that the negative resolution procedure provides the appropriate level of Parliamentary scrutiny.

CLAUSE 239: IMPOSITION

Power conferred on: Secretary of State

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

125.  Clause 239 sets out the procedure to be followed by the Regulator when serving a compensation notice. A compensation notice must specify the grounds on which the compensation is to be awarded, the amount of the compensation, the person to whom it is to be paid, any interest to be paid in the event of late payment and the period within which it must be paid. Sub-clause (5) specifies that the Secretary of State shall make regulations about the period within which any compensation must be paid and gives the Secretary of State power to make other regulations about the form and content of a compensation notice and the manner in which a penalty notice is to be given.

126.  The delegated power is necessary for three reasons. The first is to ensure that it is the Secretary of State and Parliament through the negative resolution procedure that will determine the period within which compensation will be required to be paid. The second reason is to provide for flexibility in setting the period both in setting the initial period and allowing for an opportunity to adjust later having regard to experience. The third reason is to allow the Secretary of State the flexibility to specify the form and content of a compensation notice and other procedural matters which are not appropriate for primary legislation.

127.  As this is essentially an administrative procedure, the Department considers that the negative resolution procedure provides the appropriate level of scrutiny.

CLAUSE 243: ENFORCEMENT

Power conferred on: Treasury Ministers

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

128.  Clause 243 provides that compensation awarded by the Regulator under clause 239 is to be treated a debt owed to the person to whom it is awarded.

129.  Sub clause (2) gives the power to Treasury Ministers power to make regulations authorising the Regulator to award interest on any compensation not paid during the period specified under clause 239 or to impose additional penalties where the compensation is not paid during that period.

130.  The delegated power is necessary to give the flexibility to allow the flexibility to allow the Regulator to charge interest or award compensation. As the matters concerned relate to finance it is appropriate that this should be under the control of the Treasury and there are many precedents for a provision of this type.

131.  The Department considers that the negative resolution procedure provides the appropriate degree of Parliamentary scrutiny.

CLAUSES 255,256 AND 257: RESTRICTIONS ON DEALINGS DURING AND FOLLOWING AND INQUIRY AND SUPPLEMENTAL

Power conferred on: The Regulator

Power exercisable by: Order

Parliamentary procedure: None

132.  Clause 255 applies in two situations the first is where an inquiry under clause 203 (Inquiry) is in progress and either the Regulator has reasonable grounds for believing that a non-profit registered provider has failed to meet a standard under clauses 191 or 192 or that its affairs have been mismanaged and the interests of its tenants or its assets require protection; the second is where the an interim report has been produced under clause 204 (Inquiry: supplemental) and the Regulator is satisfied that the registered provider has failed to meet a standard or its affairs have been mismanaged.

133.  The Regulator may make order orders; under sub clause (4) to a bank or other person who holds money or securities on behalf of the registered provider preventing them from parting with the money or securities without the Regulator's consent; or under sub clause (5) to the registered provider restricting the transactions that may be entered into by that registered provider or the nature and amounts of the payments that may be made by it and may provide that transactions may note be entered into without the Regulator's consent.

134.  An order under clause 255 ceases to have effect at the end of a period of six months starting with date on which the inquirer's final report under clause 204 is made, but may be revoked or extended by the Regulator.

135.  Clause 256 applies where as a result of an inquiry under clause 203 or an audit under clause 207 the Regulator is satisfied that a non-profit registered provider has failed to meet a standard under clauses 191 or 192 or that it s affairs have been mismanaged.

136.  The Regulator may make order orders; under sub clause (4) to a bank or other person who holds money or securities on behalf of the registered provider preventing them from parting with the money or securities without the Regulator's consent or under sub clause (5) to the registered provider restricting the transactions that it may enter into or the nature an amounts of payments that it may make and may provide that transactions may note be entered into without the Regulator's consent.

137.  An order under clause 256 ceases to have effect only when it revoked by the Regulator.

138.  Before making an order under clause 255 or 256 the Regulator must take all reasonable steps to give notice to the registered provider or to any other person to whom the order is directed.

139.  Contravention of an order under clauses 255(4) or 256(4) constitutes a criminal offence on summary conviction with a fine not exceeding level 3 on the standard scale.

140.  The delegated powers are necessary to give the Regulator the power to protect the assets of a non-profit registered provider which may be or has been found to have in breach of standards or subject to mismanagement. The powers are modelled on the existing powers available to the HC under section 42 of the 1996 Act. The powers are essentially administrative rather than legislative and the Department does not consider that any Parliamentary procedure would be appropriate and none is required under the provisions of the 1996 Act.

CLAUSES 258, 259 AND 260: SUSPENSION DURING INQUIRY, REMOVAL OR SUSPENSION FOLLOWING AN INQUIRY AND SUPPLEMENTAL

Power conferred on: The Regulator

Power exercisable by: Order/directions

Parliamentary procedure: None

141.  Clause 258 applies in two situations the first is where an inquiry under clause 203 (Inquiry) is in progress and either the Regulator has reasonable grounds for believing that a non-profit registered provider has failed to meet a standard under clauses 191 or 192 or that its affairs have been mismanaged and the interests of its tenants or its assets require protection; the second is where the an interim report has been produced under clause 204 (Inquiry: supplemental) and the Regulator is satisfied that the registered provider has failed to meet a standard or its affairs have been mismanaged.

142.  The Regulator may make an order suspending an officer, employee or agent of the registered provider who it thinks has contributed to the failure or mismanagement.

143.  An order under clause 259 ceases to have effect at the end of a period of six months starting with date on which the inquirer's final report under clause 204 is made, but may be revoked before that date by the Regulator.

144.  Clause 259 applies where as a result of an inquiry under clause 203 or an audit under clause 207 the Regulator is satisfied that a non-profit registered provider has failed to meet a standard under clauses 191 or 192 or that its affairs have been mismanaged.

145.  The Regulator may make an order removing an officer, employee or agent of the registered provider who it thinks has contributed to the failure or mismanagement, and pending such a decision by the Regulator he may make an order suspend the officer employee or agent for up to six months.

146.  Where the regulator exercises the power to suspend or remove a person under clauses 258 or 259 it may give directions to the registered provider about the performance of the suspended persons functions or any other matter arising form the suspension, including appointing a person to perform that person's functions.

147.  The delegated powers are necessary to give the Regulator the power intervene in the management of the non-profit registered provider which may be or has been found to have been in breach of standards or subject to mismanagement. The powers are modelled on the existing powers available to the HC under paragraph 24 of Schedule 1 to the 1996 Act. The powers are essentially administrative rather than legislative and the Department does not consider that any Parliamentary procedure would be appropriate and none is required under the provisions of the 1996 Act.

CLAUSES 265,266, 267 AND 268: REMOVAL OF OFFICERS AND APPOINTMENT OF NEW OFFICERS

Power conferred on: The Regulator

Power exercisable by: Order

Parliamentary procedure: None

148.  Clause 265 specifies the circumstances in which the Regulator can make an order to remove an officer of a non profit registered provider and clause 266 specifies the circumstances in which the regulator can appoint a person as an officer of a non-profit registered provider.

149.  The powers under clause 265 are exercisable in relation to a director or trustee of a registered charity, a committee member of an industrial and provident society or the director of a company (other than a registered charity) which is a non-profit registered provider. The power may be exercised if the officer has been adjudge bankrupt, made an arrangement with creditors, is subject to a disqualification order under the Company Directors Disqualification Act 1986, is subject to an order under section 429(2) of the Insolvency Act 1986, is disqualified under section 72 of the Charities Act 1993, is incapable of acting by reason of a mental disorder, or is impeding the proper management of the registered provider by reason of absence or failure to act.

150.  Before making an order the Regulator must take all reasonable steps to give at least 14 days' notice to the officer and the registered provider. A person removed or suspended may appeal to the High Court.

151.  Clause 268 gives the Regulator power to appoint a person as an officer of a non-profit registered provider either to replace an officer removed under clause 265, or where there are no officers or the Regulator thinks that an additional officer is necessary for the proper conduct of the body's affairs. The Regulator may not usually appoint a majority of the board or governing body of the registered provider.

152.  In the case of registered provider that is a registered charity the Regulator may only exercise the power to appoint an officer if the charity has received public assistance, as defined in clause 273, and after consulting the Charities Commission.

153.  The delegated powers are necessary to give the Regulator the power intervene in the management of the non-profit registered provider to ensure that unsuitable persons are not involved in the management of the body or to strengthen the management of the body.

154.  The powers are modelled on the existing powers available to the HC under Part 2 of Schedule 1 to the 1996 Act. The powers are essentially administrative rather than legislative and the Department does not consider that any parliamentary procedure would be appropriate and none is required under the provisions of the 1996 Act.

PART 3: OTHER PROVISIONS ABOUT HOUSING

CLAUSES 278 TO 292 AND SCHEDULE 9

Power conferred on: Secretary of State/Welsh Ministers

Power exercisable by: Order/Regulations

Parliamentary procedure: Negative Resolution/Affirmative procedure

155.  Clause 278 establishes the fundamental duty to provide the sustainability information before sale. It establishes four powers to make regulations. The first is in sub clauses (3)(b) and (10) to prescribe the occasion on or period within which a final certificate must be supplied, which may be after completion of the sale, after supply of an interim certificate. This is essentially a matter of administrative detail, and one in which flexibility is needed to adapt it in the light of practical experience. It is suitable therefore to be settled in delegated legislation using the negative procedure. The second is sub clauses (5), power to make regulations to require supply of information at an earlier stage to a prospective purchaser. This is designed to facilitate comparison and informed decision-making by buyers by bringing the duty forward to an earlier stage of the buying process. It is the detail of the timing of the duty only which is to be settled. This is appropriately left to delegated legislation using the negative procedure.

156.  The third and fourth are powers in clause 278 (6) and (7) to make regulations to provide for exceptions to the principal duties, and impose alternative duties in relation to the supply of information in the case of those exceptions. It is not possible to predict all the circumstances which may arise and make compliance with the principal duty impracticable or unduly burdensome. A delegated power is appropriate to deal with such cases. The effect of any exception will be deregulatory, and suitable therefore for the negative procedure. Any alternative duty will moreover remain restricted to the supply of information, and be confined to the narrow circumstances in which the exception arises. In the circumstances as described, the alternative duties are suitable to be settled by delegated legislation and for the negative procedure to be used.

157.  Clause 279 on the meaning of sustainability provides in sub clauses (2) for the appropriate national authority to prescribe sustainability standards by regulations. It lists a number of specific purposes for which those standards may be prescribed. The scope of the standards is accordingly strictly defined, and the detailed provision, depending as it does among other things on practical experience and developing technologies, is appropriately left to delegated legislation using the negative procedure.

158.  Sub clause (3) provides for the addition, removal or amendment of the purposes in sub clause (2) by regulations. The list of purposes is of its nature non-exhaustive and liable to amendment as the standards develop with technical progress and experience in practice. The scope of such amendment is moreover circumscribed by the scope of sustainability, which is a distinct and recognisable concept. Amendment of the list is thus also suitably dealt with by a delegated power. The power is one to add to, alter or amend primary legislation, and is therefore made subject to the affirmative procedure in accordance with normal principles.

159.  Clause 280 deals with authorised assessors. Sustainability assessment is to be carried out only by these persons. Sub clause (2) gives to the appropriate national authority a power to make general provision by regulations about authorised assessors. Sub clause (3) provides that such regulations must specify the persons or descriptions of persons who are to be authorised assessors. These sub clauses will allow the appropriate national authority to specify that those persons who are accredited to perform assessments under the present voluntary scheme may do so also for the purposes of mandatory rating. The Department and the Welsh Assembly Government may also wish to review arrangements for accreditation in the future. Sub clauses (1) to (4) allow the flexibility to do both, as sub clause (4) introduces powers in sub clause (5) to (9) that are available in the event that regulations under sub clause (2) make provision that authorised assessors be persons accredited under a scheme approved by the appropriate national authority. The Department considers that the general provision about authorised assessors, including specification of who such persons are to be, is appropriately dealt with by delegated legislation, as these will concern detailed considerations of matters such as competence and good management. For the same reason, the negative procedure will be appropriate for them.

160.  Clause 280 (5) to (9) provide for the appropriate national authority to make provision about accreditation schemes by regulations (sub clause (5)). Accreditation is a central mechanism for ensuring the quality of the assessment process. The clause provides for regulations to be made under which the appropriate national authority shall be empowered to approve one or more accreditation schemes to which those who assess sustainability of properties and issue certificates must belong, and to include provision for the charging of reasonable fees under the schemes (sub clause(6)). The approval of a scheme will thus be an administrative act under the regulations. This will facilitate competition between candidates to run accreditation schemes, and allow the active monitoring of schemes, including withdrawal of approval. The approval power in the regulations must, nonetheless, by sub clause (7), contain provision for seven separate principal criteria concerning the operation of a scheme, which criteria may be added to (sub clauses (7)(g) and (8)). Thus the clause makes very clear outline provision for the matters on which the appropriate national authority must be satisfied in relation to accreditation. Sub clause (9) allows provision to be made in particular in relation to documents with which the scheme is concerned, including terms for their production. The Department considers that the clause is based overall on an appropriate balance between powers in primary and delegated legislation. The matters left to delegated legislation are essentially ones of administration, and the negative procedure is accordingly suitable to be used.

161.  Clause 281 empowers the appropriate national authority to make provision about a register of certificates, to be kept by or on behalf of the authority or by such other person as may be specified (sub clauses (1) to (3)). The regulations may provide for reasonable registration and inspection fees and govern disclosures from and access to the register (sub clauses (4) to (7)). Regulations may provide for interim certificates and other documents to be included on the register (sub clauses (9) and (10)). The clause provides for a summary offence with a fine not exceeding level 5 on the standard scale for breach of the disclosure provisions under the regulations (sub clauses (8)). The Department considers that the clause delegates power to deal with questions of a detailed administrative character, and is appropriate therefore for delegated legislation using the negative procedure.

162.  Clause 284 and Schedule 9 cover penalty charge notices for breaches of the seller's duties to supply certificates or a statement in clause 278 and of the duty in clause 283 to provide copies of such documents to officers of enforcement authorities. Schedule 9 paragraph 2 provides for the appropriate national authority to prescribe in regulations a penalty charge not to exceed £1000. This allows adjustment to reflect price inflation and the effectiveness of the penalty as a deterrent. Given the upper limit set in the clause, it is appropriate to allow the appropriate national authority to fix the sum in delegated legislation using the negative procedure. Schedule 9 paragraph 11 provides for the appropriate national authority to make in regulations supplementary or incidental provision to the provisions of the Schedule, including the form of notices, methods for payment, service, and circumstances in which a charge may not be given. The paragraph is restricted in its general scope to making provision ancillary to the rest of the Schedule and is conventional in character. Of the particular powers, those to deal with form of notices, methods of payment and service are purely administrative in character. The power to provide for circumstances in which penalty charges may not be given will allow the appropriate national authority to deal with any applications of the duties that may result in excessive burdens in classes of case not identified as yet, and is deregulatory in character. Provision made under any of these headings or under the general scope of the paragraph is suitable to be dealt with in delegated legislation by the negative procedure.

163.  Clause 287 empowers the appropriate national authority by regulations to suspend and revive the operation of the fundamental duty in clause 278. This is a necessary provision in order for the appropriate national authority to deal with any situation arising which may interfere with the operation of the housing market in relation to the working of the clauses and regulations made thereunder. It is an ad hoc power suitable for the negative procedure to be used, as it is for the similar provision in Housing Act 2004 (c.34) section 162.

164.  Clause 288 provides for the appropriate national authority to make regulations concerning disclosure of sustainability certificates, interim certificates, statements of non-assessment, and of information derived from such documents or collected for the purpose of preparing them (sub clause (1)). Sub clause (2) provides that breach of such regulations will be a summary offence punishable by a fine not exceeding level 5 on the standard scale. Data protection legislation will protect the essential interests of confidentiality of persons concerned in any such disclosure. It is accordingly appropriate to leave the detail of permitted disclosure to delegated legislation, and for this to be by the negative procedure.

165.  Clause 289 gives to the appropriate national authority power to make regulations for the general purposes, or any particular purpose of the Chapter, or in consequence of any provision made under the Chapter or for giving full effect to it (sub clause (1)). Such regulations may in particular provide for:

166.  the form and content of certificates and statements of non-assessment, or for the form and content of such documents to be such as the appropriate national authority may approve(sub clause(2)(a) and (b) and (3));

• ways in which sustainability standards can be met (sub clause (2)(c));
• the issue of guidance (sub clause (2)(d)); and
• any interaction between provision under the Chapter with provision made by other enactments in relation to home information packs or energy performance certificates (sub clause (2)(e)).

167.  For certificates and guidance this would thus be a power to be exercised administratively, needing as it does to be used flexibly in response to situations arising. This power though broadly defined is conventional in character and is clearly designed only to allow provision ancillary to other provision in or under the Chapter. The power to provide for ways of meeting standards will allow for regulations to establish presumptions of compliance by following principles in any guidance, and is useful ancillary provision to assist dutyholders. Power to deal with interaction with legislation for home information packs or energy performance certificates is desirable because of the possible overlaps in provision, and will allow for better regulation principles to prevail in such circumstances. The entire clause is accordingly suitable to be the subject of delegated legislation, and for the negative procedure to be used.

168.  Clause 290 (1) to (5) gives the appropriate national authority power by regulations to extend the Chapter to conversions and to non-residential properties. There are no immediate plans to extend the powers to either category, but the clauses are equally suitable for use in those categories when the time comes. The extension is suitable to be dealt with by delegated powers therefore. The importance of the extension of the duty is such, particularly in relation to non-residential properties, however that the Department considers the affirmative procedure to be more appropriate.

169.  Clause 290 (6) and (7) provide powers for regulations to amend the definition of a purchaser in clause 291 (1). The latter defines a purchaser as a person who either has made an offer to purchase a residential property, or has purchased it. The powers allow only for extension of the definition, and in particular to those who are taking steps with a view to deciding whether to make such a purchase. They correlate with the power in clause 278(5) for regulations to require supply of information at an earlier stage than the agreement for sale. These are powers to amend primary legislation, and are thus suitable for the affirmative procedure in accordance with normal principles.

170.  Clause 291 provides for interpretation. Sub clause (1) defines the 'relevant interest' in property in respect of which the Chapter imposes regulations upon sale as (a) a freehold interest, (b) 'such leasehold interests as may be prescribed; or (c) an option to acquire either. There is accordingly a power to prescribe the leasehold interests which are to be covered. The clauses apply only to the sale of a lease, as distinct from the simple grant of a rental lease at a rack rent. The identification of the leasehold interests whose sale is to be covered is therefore a matter of legislative detail, and needs to be adaptable to changes in practice in the market. It is suitable to be left to delegated legislation and for the negative procedure to apply.

171.  Clause 291 (4) defines the point at which the construction of a property is finished, and sub clause (4)(e) 'meets any other prescribed requirements' gives the appropriate national authority power to add to the definition. This is a matter of legislative detail, designed to allow refinement of the definition from time to time in the light of practical needs. It is suitable to be left to delegated legislation and for the negative procedure to apply.

CLAUSE 294: MANAGEMENT AGREEMENTS; EXTENDING THE REQUIREMENTS TO CO-OPERATE

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: Negative Resolution

172.  This clause amends the existing order making power in section 27AB of the Housing Act 1985. That section gives the Secretary of State the power to make regulations imposing requirement on a local housing authority where a tenant management organisation serves notice on the authority proposing that authority should enter into a management agreement with the authority.

173.  It amends that provision by extending the range of matters that that may be required by the regulations to include: the provision of prescribed information, the taking prescribed steps and complying with prescribed time limits.

174.  The extension of the power is necessary to ensure that the regulations made under 27AB can provide a more comprehensive framework to permit transfers of management to a tenant management organisation.

175.  The existing powers conferred on the Secretary of State are exercisable in England by the Secretary of State and Wales by the Welsh Ministers.

CLAUSE 295: REQUIREMENTS TO CO-OPERATE IN RELATION TO CERTAIN DISPOSALS OF LAND

Power conferred on: Secretary of State/Welsh Ministers

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

176.  Clause 295 confers a new right on tenants of a local housing authority to require the authority to consider a proposal for the transfer of the ownership of the property occupied by them. The provision is closely modelled on section 27AB of the Housing Act 1985, which makes similar provision in relation to a proposal for the transfer of management of part of that authority's housing stock to a tenant management organisation. The detailed provision will be set out in regulations made, in respect of England, by the Secretary of State and in respect of Wales by the Welsh Ministers.

177.  The delegated power is necessary because this will allow flexibility about the level of detail; to be included in the regulations which would not be suitable for primary legislation.

178.  The Department considers that the negative resolution procedure provides an adequate level of scrutiny.

CLAUSE 296: FAMILY INTERVENTION TENANCIES: GENERAL

Power conferred on: Secretary of State/the Welsh Ministers

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

179.  Clause 297 creates a new tenancy ("a family intervention tenancy") that can be granted by local authorities and registered social landlords to tenants who are at risk of or have been evicted from their assured or secure tenancy.

180.  The clause provides the appropriate national authority with the power to make regulations to amend the contents of the notice that local authority and registered social landlords are required to serve before a family intervention tenancy is entered into.

181.  The purpose of the power is to allow for the contents of the notice to be changed by secondary legislation. As these are new types of notice it may be that the matters prescribed in the primary legislation will be insufficient or too onerous and it is necessary that the appropriate authority have the flexibility to change these requirements without the need for primary legislation.

182.  In addition, the notice must contain advice to the tenant as to how he may obtain advice and assistance in relation to the notice. The clause provides the appropriate national authority with the power by regulation to make provision about the type of advice that should be included in the notice. It is appropriate that this level of detail is provided for by secondary legislation and this will also provide the flexibility to revise the requirements if necessary without the need for primary legislation.

183.  The Department considers that that the negative resolution procedure provides an adequate level of scrutiny in respect of both of the powers in this clause.

CLAUSE 297: CERTAIN FAMILY INTERVENTION TENANCIES: TERMINATION

Power conferred on: Secretary of State/the Welsh Ministers

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

184.  Clause 297 sets out the procedure for terminating a FIT tenancy by the local authority. The local authority must serve a notice on the tenant stating that the authority has decided to serve a notice to quit on the tenant. Both this notice, and any notice to quit that is served, must contain advice to the tenant as to how the tenant may be able to obtain assistance in relation to the notice. The clause confers a power on the appropriate national authority to make regulations about the type of advice to be included in such notices.

185.  The clause also provides a power enabling the appropriate national authority to prescribe by regulations the procedure to be followed in connection with a review of the local authority's decision to issue a notice to quit. The clause also provides that regulations may in particular specify the description of person who will make the decision on a review; specify the circumstances in which the tenant is entitled to an oral hearing on a review, specify whether and by whom the tenant is entitled to be represented at such a hearing. The power will be subject to the negative resolution procedure.

186.  The review procedure is to be provided for in secondary legislation for the following reasons: this is the most efficient means for providing this information (rather than lengthy clauses in the Bill), the matters included in the procedure may need to be amended or revoked depending on how the measures work in practice; and there is precedent for a similar regulation making power in respect of introductory tenancy and demoted tenancy review procedure.

187.  The power to make provision about the type of advice to be provided in notices is appropriate for secondary legislation because this would need to be described with a level of detail which is not appropriate for primary legislations and will provide the flexibility to allow the requirements to be revised to suit changing circumstances.

188.  The exercise of these powers, which will be exercised by the Secretary of State in respect of England and by the Welsh Minister s in Wales, is unlikely to be controversial and they do not allow for the amendment, repeal or modification of any enactment. The Department considers that the exercise of these powers should be subject to the negative resolution procedure.

CLAUSE 298 AND SCHEDULE 10: POSSESSION ORDERS RELATING TO CERTAIN TENANCIES

Power conferred on: The Secretary of State/the Welsh Ministers

Power exercisable by: Order

Parliamentary procedure: Affirmative procedure/Negative Resolution

189.  This clause gives effect to Schedule 10 (Possession orders relating to certain tenancies) which contains seven delegated powers.

190.  Paragraph 16 of Schedule 10 provides that a new tenancy of the dwelling-house let under the original tenancy is treated as arising on the commencement date, between the ex-landlord and the ex-tenant, if three conditions are satisfied. The first of these conditions is that the "home condition" is met. Paragraph 16 sets out requirements in relation to the home condition, and in 16(7) gives the appropriate national authority power by order made under the negative resolution procedure to provide for particular cases or descriptions of case, or particular circumstances, where the home condition is met where it would not otherwise be met.

191.  Paragraph 18 provides that the terms and conditions of the original tenancy immediately before it ended will apply to the new tenancy, subject to sub-paragraphs (2) to (6) which set out details of modifications and limitations. 18(4) gives the appropriate national authority power by order made under the negative resolution procedure to provide for other modifications of the terms and conditions of the new tenancy.

192.  Paragraph 19 deals with the application of statutory provisions relating to secure, assured, introductory or demoted tenancies to such a tenancy arising as a new tenancy under Part 2 of the Schedule, and 19(4) gives the appropriate national authority power by order subject to the affirmative procedure to modify any provision made by or under an enactment in its application to a new tenancy.

193.  Paragraph 21 provides that for relevant purposes the original tenancy and the new tenancy must be treated as the same tenancy which continued uninterrupted throughout the termination period. Three relevant purposes are listed in 21(2), and in addition the appropriate national authority is given a power to specify any other purpose by order subject to the affirmative procedure.

194.  Paragraph 21(3) gives the court a power to order that the original tenancy and the new tenancy are to be treated as the same and continuous for the purpose of a relevant claim, so that the claim may apply to the termination period. A relevant claim is defined in 21(4) as being a claim by either ex-landlord or ex-tenant against the other for breach of the tenancy agreement, or a claim by the ex-tenant against the ex-landlord for breach of statutory duty. In addition, by paragraph 21(4)(c) a relevant claim is any other claim of a description specified by the appropriate national authority by order subject to the affirmative procedure.

195.  Paragraph 22 provides that the fact that occupants who were ex-tenants at the time were or were not allowed to vote does not mean that consultation requirements were not complied with. Specific consultation requirements are listed in 22(2)(a), and in addition by 22(2)(b) the appropriate national authority is given a power to specify by an order subject to the negative resolution procedure any other consultation requirements.

196.  Paragraph 23(2) gives the appropriate national authority power by order subject to the negative resolution procedure to provide for Part 2 of the Schedule to apply in relation to an original tenancy which was a joint tenancy subject to such additional modification.

197.  The delegated powers are necessary to enable the application of Schedule 10 to be modified to take account of situations that may arise in the application of the provisions of the Schedule that could not be anticipated when drafting the provisions. Where the effect of the modification could have the effect of making a significant alteration to the primary legislation, the order making power is subject to that affirmative procedure, in other case the Department considers that the negative resolution procedure provides the appropriate degree of Parliamentary scrutiny.

CLAUSE 300 : SHARED OWNERSHIP LEASES: EXTENDED PROTECTION FOR CERTAIN LEASES

Power conferred on: Secretary of State/Welsh Ministers

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

198.  Clause 300 amends Schedule 4A to the Leasehold Reform Act 1967 ("the 1967 Act") in relation to the exercise of rights of enfranchisement by tenants of houses. Paragraphs 3A(1)(b) and 3A(2)(b), (c), (e) and (f) give power to the appropriate national authority (the Secretary of State in England, and the Welsh Ministers in Wales) to prescribe in regulations conditions that must be satisfied if a lease granted by a provider of shared ownership housing, other than a housing association, is to be excluded from the operation of Part 1 (enfranchisement provisions) of the 1967 Act.

199.  There are already powers to prescribe conditions relating to shared ownership leases under Schedule 4A. This clause supplements those existing powers. Paragraph 5 of Schedule 4A provides that regulations made under Schedule 4A may make different provision for different cases or descriptions of case, including different provision for different areas and may contain such incidental, supplementary or transitional provisions as the appropriate national authority considers appropriate.

200.  The exercise of these powers are unlikely to be controversial and they do not allow for the amendment, repeal or modification of any enactment. The Department considers that it is appropriate that the regulation making powers should be subject to the negative resolution procedure.

CLAUSE 301: SHARED OWNERSHIP LEASES: PROTECTION FOR HARD TO REPLACE HOUSES

Power conferred on: Secretary of State/Welsh Ministers

Power exercisable by: Order/Regulations

Parliamentary procedure: Negative Resolution

201.  Clause 300 also amends the Leasehold Reform Act 1967 by adding a new paragraph 4A. Paragraph 4A(2) gives power to the appropriate national authority (the Secretary of State in England, and the Welsh Ministers in Wales) to designate by order an area as a protected area where they consider it is appropriate to do so to support the provision in the area of houses, or types of houses, which are available for occupation in accordance with shared ownership arrangements.

202.  Paragraph 4A(3 ) requires the appropriate national authority to publish the criteria which will be taken into account in deciding whether to designate an area as a protected area and paragraph 4A(4) requires it to consult stakeholders likely to be affected. It is similar to the power to designate by order and area as a rural area under section 1AA of the 1967 Act.

203.  Paragraph 4A(6) provides that an order made under paragraph 4A may contain such incidental, supplemental, transitory, transitional or saving provisions as the appropriate national authority considers appropriate.

204.  Paragraphs 4A(1)(ab) and 4A(1A)(b), (c) and (e) give powers to the appropriate national authority to prescribe by regulations conditions that must be satisfied if a lease granted by a provider of shared ownership housing situated in an area that is designated as a protected area is to be excluded from the operation of Part 1 (enfranchisement provisions) of the 1967 Act. There are already powers to prescribe conditions relating to shared ownership in Schedule 4A to the 1967 Act. Paragraph 5 of Schedule 4A provides that regulations made under Schedule 4A may make different provision for different cases or descriptions of case, including different provision for different areas and may contain such incidental, supplementary or transitional provisions as the appropriate national authority considers appropriate.

205.  The exercise of these powers is unlikely to be controversial and they do not allow for the amendment, repeal or modification of any enactment. The Department considers that it is appropriate that the order making power should be subject to the negative resolution procedure.

CLAUSE 302 AND SCHEDULE 11: SERVICE CHARGES: PROVISION OF INFORMATION AND DESIGNATED ACCOUNTS

Power conferred on: Secretary of State/Welsh Ministers

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

206.  Schedule 11, which is given effect by this clause makes changes to the requirements in the Landlord and Tenant Act 1985 ("the 1985 Act") and the Landlord and Tenant Act 1987 ("the 1987 Act") regarding the information that landlords must supply to service charge payers and how service charge monies are to be held.

207.  Paragraph 2 replaces section 21 of the 1985 Act. Section 21(1) gives the appropriate national authority (the Secretary of State in England, and the Welsh Ministers in Wales) power to make regulations about the provision, by landlords of dwellings to each tenant by whom service charges are payable, of information about service charges. Section 21(2) sets out the matters that should be dealt with in those regulations. In particular, the regulations must require a landlord to provide information about the service charges of the tenant and any "associated service charges" (defined in section 21(8)) and the relevant costs relating to those service charges. Section 21(3) provides that (subject to any exceptions) the regulations must require that a report by a qualified person be supplied with the statement. Section 21(4) sets out the matters about which provision may be made in the regulations. In particular the regulations may make provision about the information and reports that need to be provided, the periods in relation to which they are to be provided, the times at or by which they need to be provided, and the form and manner in which they may be provided. The regulations may also describe the persons who are "qualified persons" for the purposes of preparing the report that must accompany the information supplied by the landlord. Section 21(5) provides that the power under subsection (1) to make regulations is not limited in any way by the provisions of subsections (2) to (4).

208.  Section 21(6) provides that regulations made under section 21 may make different provision for different cases or descriptions of case or for different purposes, and make such supplementary, incidental, consequential, transitional or saving provision that the appropriate national authority considers appropriate.

209.  Paragraphs 11,12 and 13 amend section 42A of the 1987.Act. These amendments will allow one or more trust funds containing service charge monies held on behalf of different groups of service charge payers to be held in one designated client account.

210.  Section 42A(2A) provides that the appropriate national authority (the Secretary of State in England, and the Welsh Ministers in Wales) may by regulations ensure that a payee who holds more than one trust fund in the same designated account cannot move any of those funds to another designated account unless conditions specified in the regulations are met.

211.  By section 42A(9A) the regulations may make provision about the circumstances in which a contributing tenant who has reasonable grounds for believing that a payee has not complied with a duty imposed on him by the regulations may withhold payment of service charges, the period for which payment may be withheld and the amount that may be withheld.

212.  By section 42A(10A) regulations made under section 42A may make different provision for different cases, including provision for different areas, and may contain such supplementary, incidental, consequential, transitional, transitory or saving provision as the appropriate national authority considers appropriate.

213.  The powers in the 1985 Act to make provision about the information that is to be provided to tenants about service charges, and in the 1987 Act to make provision about the manner in which service charge monies are held, are appropriate for secondary legislation because these matters will need to be described with a level of detail which is not appropriate for primary legislation. The powers will provide the flexibility to allow the requirements to be revised to suit changing circumstances.

214.  The powers provided for in new section 21 of the 1985 Act partially re-enact powers contained in the existing section 21 that is being replaced.

215.  The powers in section 42A(9A) of the 1987 Act are similar to the power under section 42A(9) for a contributing tenant to withhold payment of a service charge if he has reasonable grounds for believing that the payee has failed to comply with the duty imposed on him by section 42A)(1), being the duty to hold any sums standing to the credit of any trust fund in a designated account at a relevant financial institution.

216.  The exercise of these powers is unlikely to be controversial and they do not allow for the amendment, repeal or modification of any enactment. The Department considers that the regulation making power should be subject to the negative statutory instrument procedure.

CLAUSE 307:FORMER RIGHT TO BUY AND OTHER FLATS: SERVICE CHARGE LOANS

Power conferred on: Secretary of State

Power exercisable by: Order

Parliamentary procedure: Negative Resolution

217.  Sections 450A, B and C of the Housing Act 1985, already give the Secretary of State the power to make regulations providing for mandatory or discretionary loans by "housing authorities" (i.e. social landlords, including both local authorities and registered social landlords) to leaseholders who bought under the right to buy. The clause will allow the power to be widened to enable the regulations to include discretion to the landlords to whom they apply to make loans on equity share rather than interest-bearing terms.

218.  The existing powers conferred on the Secretary of State are exercisable in England by the Secretary of State and Wales by the Welsh Ministers.

CLAUSE 308: FORMER RIGHT TO BUY AND OTHER FLATS: EQUITY SHARE PURCHASES

Power conferred on: Secretary of State/the Welsh Ministers

Power exercisable by: Regulations

Parliamentary procedure: Negative Resolution

219.  Sections 450A and B of the Housing Act 1985 provide respectively for the right to a loan in certain cases after exercise of the right to buy, and for a power to make loans in other cases. The provisions apply to "housing authorities" (broadly, social landlords, including both local authorities and registered social landlords). Provision for such loans is to be made by the appropriate national authority by regulations. Section 450C of the Act contains supplementary provisions regarding the regulations. Clause 307 adds a new section 450D. This gives the appropriate national authority power to make regulations providing that a landlord may, with the leaseholder's agreement, purchase an equitable share in his or her flat for the purpose of assisting the leaseholder to meet some or all of the service charge payments. The regulations must provide that the payment for the equitable share should take the form of cancelling the service charge bill.

220.  The delegated power is necessary to allow for matters to be contained in the purchase scheme of a more detailed nature than is usually included in primary legislation, such as the calculation of the purchase price. The Department considers that the negative resolution procedure is appropriate for this type of regulations

CLAUSE 310 AND SCHEDULE 10: DISPOSALS OF DWELLING-HOUSES BY LOCAL AUTHORITIES

Power conferred on: Secretary of State/the Welsh Ministers

Power exercisable by: Order

Parliamentary procedure: Negative Resolution

221.  Clause 310 amends the Housing Act 1985 (and other legislation). The intention of the amendments is to remove the requirement that local authorities must apply to the Secretary of State annually to be included in a large scale disposals programme for a particular financial year. The amendments do, however, retain the requirement that the exchequer costs of such disposals must be considered before consent is granted.

222.  Paragraph 1(2)(c) of Schedule 13 ensures that the provision that the appropriate national body may make assumptions as to what the exchequer costs might be is retained in the amended legislation and also retains the definition of "large scale disposal" (inter alia) for the purpose of those cost calculations. "Large scale disposal" means a disposal of one or more dwelling-houses by a local authority to a person where the number of dwelling-houses included in the disposal; and the number of dwelling-houses which, in the relevant period, have previously been disposed of by the authority to that person, or that person and any of the person's associates taken together, exceeds 499. The appropriate national body, the Secretary of State in England and the Welsh Ministers in Wales, is also given the power by order to change the number of dwelling-houses from 499 in that definition, and to change the length of the relevant period in that definition. The power is unchanged from the existing legislation (section 135 (2) of the Leasehold Reform, Housing and Urban Development Act 1993).

223.  Any order will be subject to the negative resolution procedure. This is the same procedure as for the existing power the Department considers that this should apply to the extended power.

PART 4: SUPPLEMENTARY AND FINAL PROVISIONS

CLAUSE 318: ORDERS AND REGULATIONS, CLAUSE 319: CONSEQUENTIAL AMENDMENTS AND REPEALS AND CLAUSE 320: TRANSITIONAL, TRANSITORY OR SAVING PROVISION

Powers conferred on: Secretary of State/the Welsh Ministers

Power exercisable by: Order

Parliamentary procedure: Negative Resolution/Affirmative procedure

224.  Clause 318 enables the Secretary of State or the Treasury to make orders or regulations and Welsh Ministers to make orders by statutory instrument which make general, or subject to exceptions or for specified cases or description of case and for different purposes, areas or different cases or different cases or description of case. An order under this clause includes power to make supplementary, incidental, consequential, transitional, transitory or saving provisions.

225.  This clause also identifies particular provisions within the Bill that are subject to either the affirmative or negative resolution procedures.

226.  Clause 319 deals with consequential amendments and repeals which are contained in Schedule 11. It enables the Secretary of State by order to amend or repeal primary or secondary legislation for a consequential or supplementary purpose, that has not been addressed in Schedule 11, the power is also exercisable by the Welsh Ministers in respect of matters relating to any functions exercisable by them.

227.  Any order which amends or repeals primary legislation will follow the affirmative procedure. Any order which amends or repeals secondary legislation which itself was subject to the affirmative procedure, the affirmative procedure will follow, otherwise the negative procedure will apply.

228.  Clause 320 enables the Secretary of State and the Welsh Ministers by order to make such transitional, transitory or saving provision in connection with the coming into force of the provisions in the Bill.

229.  The powers under these three clauses are commonly provided in primary legislation of this type and simply ensure that full effect can be given to the provisions in the Bill.

Department for Communities and Local Government

April 2008

---

1   The Urban Regeneration Agency and the Commission for the New Towns operate in partnership under the name "English Partnerships". Back