Twenty Ninth Report Contents

Instruments of interest

Draft Client Money Protection Schemes for Property Agents (Approval and Designation of Schemes) Regulations 2018

Draft Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2018

12.These draft Regulations have been laid by the Ministry of Housing, Communities and Local Government (MHCLG). They make it mandatory for letting and managing agents in the private rented sector to be members of an approved Client Money Protection (CMP) scheme. The aim is to ensure that any money held by an agent on behalf of a tenant or landlord is protected, and that the tenant or landlord can be reimbursed if the agent goes bankrupt or commits fraud. The industry estimates that letting agents currently hold approximately £2.7 billion on the behalf or tenants or landlords, including rent payments or money to pay for repairs and maintenance. While membership of a CMP scheme is not mandatory at present, the industry estimates that around 60% of agents are already members of such a scheme.8 According to MHCLG, the draft Regulations implement the recommendation of a review chaired by Baroness Hayter and Lord Palmer of Childs Hill into the operation of CMP schemes in the lettings sector. The review concluded that membership of a Government approved or designated scheme should be made mandatory. The draft Regulations also set out requirements for approved CMP schemes and enable the Secretary of State to designate a Government-administered CMP scheme should the markets fail to provide such schemes at any point in the future.

Terrorism Act 2000 (Enforcement in Different Parts of the United Kingdom) Order 2018 (SI 2018/521)

13.This Order closes a legislative gap that the Home Office has identified in relation to the investigation of terrorist financing. The instrument makes investigative powers that have been ordered by a court under the Terrorism 2000 Act (TACT) to investigate terrorist financing, inter-operable in the UK’s three legal jurisdictions (England and Wales, Scotland or Northern Ireland). This will enable those who are carrying out an investigation in one jurisdiction, to easily obtain information or evidence from another jurisdiction. While inter-operability between jurisdictions currently exists with regard to some orders made under TACT, such as restraint orders, there are no provisions for it in relation to terrorist financing. The Home Office explains that the Order addresses this legislative gap, and brings the application of the terrorism investigation powers under TACT in line with the equivalent criminal investigation powers under the Proceeds of Crime Act 2002. The Home Office says that this will ensure clarity and consistency across both the terrorist and criminal financing asset recovery regimes.

Children’s Homes (England) (Amendment) Regulations 2018 (SI 2018/540)

14.These Regulations will enable secure schools that are set up as academies to be approved as secure children’s homes, so that they can provide accommodation for children who are serving a custodial sentence. The Ministry of Justice (MoJ) says that this change reflects a shift in the ethos of how children and young people are cared for while in custody. According to MoJ, the average size of the young custodial population has fallen significantly over the last decade, from over 3,000 young people in 2006/07, to fewer than 1,000 in 2016/17, but those young people who remain in custody are often challenging and have complex needs. A lack of educational attainment, substance misuse, self-harm and suicide, mental health issues and learning difficulties are particular concerns. The MoJ explains that these complex needs are better met in more child and education focused settings and that the Government intends to replace all Young Offender Institutions and Secure Training Centres with secure schools. This instrument aims to facilitate the setting up of secure schools which are registered as both a 16 to 19 academy and a secure children’s home, in support of the intended shift towards a more child-centred and education-focussed custodial provision.

Prison and Young Offender Institution (Amendment) Rules 2018 (SI 2018/549)

15.This instrument will enable governors of prisons and young offender institutions to introduce their own local privilege policies without approval by a senior official on behalf of the Secretary of State. Privilege policies aim to encourage prisoners to take an active part in their rehabilitation by rewarding them for positive and responsible behaviour with privileges, such as giving them extra time to spend outside their cells. The Ministry of Justice (MoJ) explains that while governors will need to adhere to the 2013 Prison Service Instructions (PSI) which set out minimum standards for local policies on incentives and earned privileges, the new rules will give them greater flexibility and authority over how incentives are used in their prisons. The MoJ is currently reviewing the PSI, with a view to replacing them with a new Policy Framework that will give more authority to governors. The MoJ says that these new Rules on local privilege policies are in line with the approach that will be taken for the new Framework. As part of the Government’s commitment to make the entire closed prison estate non-smoking, the Rules also remove tobacco as a privilege for prisoners, and add matches, lighters, e-cigarettes and vaping devices to the list of articles that may attract a fine if brought into prison without authorisation. The MoJ explains that this is to address health and safety concerns and deter offenders from trying to profit from smuggling them into prison in order to circumvent the smoking ban.


8 Department for Communities and Local Government, Client Money Protection, March 2017: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/603365/Client_Money_Protection_Working_Group_Report.pdf [accessed 16 May 2018].




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