Schedule 11: Registered social landlords
682.Schedule 11 makes amendments to the Housing Associations Act 1985, and the Housing Acts 1988 and 1996.
683.The relevant authority's (the Housing Corporation in relation England and the National Assembly for Wales in relation to Wales) powers to make or recover grants were previously restricted to matters that it had previously "determined" i.e. included in a formal statement (known as a "determination") published after consultation with bodies representative of registered social landlords (RSLs), and subject to the approval of the Secretary of State. Revised determinations were previously required not only to introduce new grant programmes but also for minor changes to detailed procedural arrangements related to grant payment and recovery of existing grant.
684.Paragraph 1 removes the requirement on the relevant authority to make formal determinations concerning procedural (but not policy) matters relating to the giving or recovery of grant under section 87 of the Housing Associations Act 1985.
685.Paragraphs 3 and 4 remove the requirement on the relevant authority to make formal determinations (as described in the note for paragraph 1 above) concerning procedural (but not policy) matters relating to the giving or recovery of grant under sections 50(2) and 52(2) of the Housing Act 1988 respectively.
686.Paragraphs 5 and 6 remove the relevant authority's requirement that RSLs account separately for surplus rental income gained from properties funded by grant before 1988 (the Rent Surplus Fund).
687.Paragraphs 8 to 10 remove the requirement on the relevant authority to make formal determinations (as described in the note for paragraph 1 above) concerning procedural (but not policy) matters relating to the giving or recovery of grant under sections 18(2), 20(3) and 21(3) of the Housing Act 1996 respectively.
688.Paragraph 11 amends the side note to section 28 of the Housing Act 1996, and to section 28(6) of that Act, to reflect the removal of the requirement on RSLs to account separately for Rent Surplus Fund income (see note in respect of paragraphs 5 and 6 above).
689.Paragraph 12 increases the penalties previously specified in section 31(2)(b) of the Housing Act 1996 which apply where a person commits the offence of altering, suppressing or destroying a document required by the relevant authority in connection with the conduct of its regulatory powers under section 30 of that Act. Subparagraph (1) extends the range of maximum penalty appropriate on conviction on indictment from a fine not exceeding the statutory maximum, to imprisonment for a term not exceeding two years or a fine, or both. Subparagraph (2) provides that the revised range of penalty does not apply in relation to any offence committed before subparagraph (1) comes into force.
690.Paragraph 13 extends the scope of statutory guidance issued by the relevant authority as currently listed in section 36(2) of the Housing Act 1996. In particular subparagraph (3) introduces a new subsection (2A) to section 36 of that Act adding governance, effective management and financial viability as matters about which the relevant authority can give statutory guidance and therefore have regard to when considering whether action needs to be taken in accordance with section 36(7). Subparagraph (4) extends section 36(7) to permit the relevant authority to consider whether action needs to be taken where there has been misconduct in the affairs of an RSL.
691.Paragraph 14 amends paragraph 1(2) of Schedule 1 to the Housing Act 1996, to clarify that an RSL, which is a member of a Group Structure, may transfer funds to another RSL which is either a subsidiary or associate within that Group.
692.Paragraph 15 amends paragraph 15 of Schedule 1 to the Housing Act 1996, in respect of the arrangements concerning the transfer of an RSL’s net assets on dissolution or winding up. Subparagraph (2) extends the scope of paragraph 15(1)(b) of Schedule 1 to the Housing Act 1996 to include a company which is also a registered charity. Subparagraph (3) removes an anomaly which could otherwise have the potential to result in the assets of a charitable RSL, in the event of its dissolution or winding up, being passed to a non-charitable RSL.
693.Paragraph 16 introduces a new paragraph 15A to Schedule 1 of the Housing Act 1996 which allows the Secretary of State to extend the provisions in paragraph 15 to apply to charitable RSLs which do not fall within the scope of paragraph 15(1), as amended, that is, charitable housing associations.
694.As such RSLs operate under a variety of constitutions, there are different ways in which such an RSL may be dissolved, wound up, or simply ceases to exist. As it would be too cumbersome to specify all the circumstances in which paragraph 15 is to apply to the RSL on the face of the Act, the Secretary of State may make regulations which will set out the circumstances in which the extension will apply and any modifications to paragraph 15 which may be considered necessary for that particular extension. Subparagraph (3) of new paragraph 15A specifies that regulations under this paragraph requiring the transfer of property of the charity will have effect notwithstanding anything in the terms of the RSL's trusts, nor any resolution, order or other thing done in connection with the termination of the charity.
695.Paragraphs 17 to 21 make new provision allowing smaller RSLs to provide the relevant authority with accountant’s reports rather than full audited accounts. Subparagraph (3) substitutes new subparagraphs (5) to (8) to paragraph 16 of Schedule 1 to the Housing Act 1996.
696.New subparagraphs (5) and (6) retain the current position for those RSLs where they are required to provide audited accounts under any other enactment's, and requires a copy of the accounts for all RSLs to be furnished to the relevant authority within six months of the end of the period to which they relate.
697.New subparagraph (7) introduces new rules where by virtue of any enactment the RSLs accounts are not required to be audited, for example these rules would apply to RSLs registered as a company under the Companies Act 1985 who, by virtue of section 249A are not required to provide fully audited accounts, but instead must provide an accountant’s report.
698.New subparagraph (8)(a) of paragraph 16 to Schedule 1 of the Housing Act 1996 requires that RSLs to whom new subparagraph (7) applies, must provide the relevant authority with a copy of the reporting accountant’s report within six months of the end of the period to which they relate. New subparagraph (8)(b) requires that such a report contain a statement from the reporting accountant giving their opinion on whether the RSL’s accounts comply with the requirements laid down under paragraph 16 of Schedule 1 of the Housing Act 1996 (general requirements as to accounts and audit).
699.Paragraph 18 introduces new paragraph 16A of Schedule 1 to the Housing Act 1996 specifying the criteria under which an RSL is permitted to provide the relevant authority with a reporting accountant’s report in place of full audited accounts where the RSL is a company registered under the Companies Act 1985. Similarly paragraph 19 replaces paragraph 17 of Schedule 1 to the Housing Act 1996 specifying criteria in respect of RSLs which are industrial and provident societies, and paragraphs 20 and 21 amend and supplement paragraph 18 of Schedule 1 to the Housing Act 1996 in respect of RSLs which are charities.
700.In each case the relevant authority will retain the power to direct an RSL to appoint a qualified auditor to audit its accounts and balance sheet for that year, and forward to the relevant authority a copy of the auditor's report, irrespective of the new criteria.
701.Paragraph 22 amends paragraph 19 of Schedule 1 to the Housing Act 1996 regarding compliance with accounting requirements. Subparagraph 22(2)(a) and (b) amend paragraph 19 to reflect the new arrangements exempting small RSLs from the need to produce fully audited accounts. Subparagraph 22(2)(c) amends subparagraph 19(2) by increasing the maximum fine from level 3 to level 5 where a responsible person, as defined in paragraph 19(1), fails to comply with the accounting requirements as defined in paragraph 19(2). Subparagraph 22(3) provides that the increased maximum penalty does not apply in relation to any offence committed before subparagraph 22(2) comes into force.
702.Subparagraph 22(4) introduces a new provision permitting the High Court, on the application of the relevant authority, to make an order that default arising from an offence under paragraph 19 of Schedule 1 to the Housing Act 1996 be made good, and that all incidental costs and expenses are borne by the RSL or by any of its officers who are responsible for the default.
703.Paragraph 23 introduces a new provision in paragraph 19 of Schedule 1 to the Housing Act 1996. It exempts auditors or reporting accountants from their duty of confidentiality, where giving to the relevant authority, in good faith, information or an opinion on a matter which has become apparent in respect of an RSL while acting in the capacity of auditor or reporting accountant of that RSL. Subparagraph 23(2) specifies this exemption as applying whether or not the auditor or reporting accountant is responding to a request from the relevant authority.
704.Paragraphs 24 and 25 introduce additional powers for a person conducting a statutory inquiry into the affairs of an RSL under Part 4 of Schedule 1 to the Housing Act 1996. Subparagraph 4A of paragraph 20 of Schedule 1 introduces a provision permitting the person or persons conducting an inquiry to determine the procedures which are to be followed in connection with it. Subparagraph 20 (7) of Schedule 1 to the Housing Act 1996 is amended to permit an interim or final report under that paragraph to be published in such manner as the relevant authority considers appropriate. A new subparagraph 8 is introduced to paragraph 20 of Schedule 1 to the Housing Act 1996, permitting a local authority, if it thinks fit, to contribute to the expenses of the relevant authority in connection with a statutory inquiry conducted under paragraph 20.
705.Paragraph 25 inserts a new paragraph 20A in Schedule 1 to the Housing Act 1996. New subparagraph 20A(1) enables the person or persons conducting the statutory inquiry to serve a notice to direct another person to attend at a specified time and place, and to give evidence and/or produce specified documents relating to any matter relevant to the inquiry. New subparagraph 20A(2) permits the person or persons conducting the inquiry to take evidence on oath or otherwise require the person examined to make and subscribe a declaration of truth. New subparagraph 20A(5) ensures that a notice given by the person or persons conducting an inquiry will be subject to the same enforcement arrangements as set out in section 31 of the Housing Act 1996, in respect of a notice given by the relevant authority under section 30 of that Act, except that increased penalties for a person guilty of an offence will apply as set out in subparagraph 20A(6).
706.New subparagraph 20A(7) introduces a new measure which will make a person liable to the penalties in subparagraph 20A(6), where, in purported compliance with a notice given under new paragraph 20A, that person knowingly or recklessly provides any information which is false or misleading in a material particular. New subparagraph 20A(8) requires that proceedings for an offence under subparagraph 20A(7) may be brought only by or with the consent of the relevant authority or the Director of Public Prosecutions.
707.Paragraph 26 adds new subparagraphs 4, 5 and 6 to paragraph 21 of Schedule 1 to the Housing Act 1996, to introduce new offences in relation to the powers of a person appointed by the relevant authority to conduct a statutory inquiry into the affairs of an RSL. In particular new subparagraph 21(4) increases the level of penalty maximum for offences under subparagraph 21(3). New subparagraph 21(5) will make a person liable to the penalties in new subparagraph 21(4), where, in purported compliance with a notice given under new paragraph 21 of Schedule 1 to the Housing Act 1996, that person knowingly or recklessly provides any information which is false or misleading in a material particular. New subparagraph 21(6) requires that proceedings for an offence under subparagraph 21(5) may be brought only by or with the consent of the relevant authority or the Director of Public Prosecutions.