Management etc.
Section 246 - Overview
710.This section introduces sections 247 to 255, which give the regulator powers in relation to the management and constitution of registered providers.
Section 247 - Management tender
711.Subsection (1) specifies that the regulator may use this power where it is satisfied that a registered provider has failed to meet standards set under either section 193 or 194, or that its affairs in relation to social housing have been mismanaged, as defined in section 275.
712.If the regulator is satisfied that one of the conditions in subsection (1) is met, subsections (2) and (3) gives it the power to require the registered provider to put out to tender the management of its social housing, in whole or in part. The regulator will specify the process that the provider is to follow in putting the services out to tender and making an appointment as a result of that process.
713.The extent of the services to be tendered out may be restricted either by reference to the type of services concerned, or in relation to a specific part or parts of the social housing stock owned by the registered provider.
714.The regulator must specify certain matters when it exercises this power, as follows:
the constitution of the panel which has the responsibility for selection, which must include provision for ensuring tenants’ interests will be represented on that panel,
provision for ensuring that the procurement process follows best practice, and
the terms and conditions on which the manager is to be appointed, that will include the setting of the required standards, how those standards will be monitored and enforced, and resources.
Section 248 - Section 247: Supplemental
715.Subsection (1) requires that before the regulator requires a registered provider to implement the process under section 247(2), it must give that provider a notice which specifies the grounds on which action may be taken, warns the provider that it is considering action under this section, and explains the effect of the section.
716.Subsections (2) and (3) provide that the notice must specify a period during which the registered provider may make representations to the regulator, and that the period must be at least 28 days and begin on the date the provider receives the notice.
717.Subsection (4) provides that the notice must be copied to the HCA, and to any other person that the regulator thinks appropriate, having regard to any person who has provided information as a result of which the notice is given.
718.Subsection (5) provides that the notice served under section 247(1) must advise the registered provider on whom it is served about the provisions for the provider to make voluntary undertakings to the regulator under section 125, and the extent to which it would accept an undertaking instead of using this power under 247(2).
719.Subsection (6) allows the regulator to issue the notice in conjunction with warning notices for other enforcement powers under Chapter 7.
720.Subsection (7) provides that in deciding whether to use this power, the regulator must have regard to the views of relevant tenants, the registered provider, the HCA and, if appropriate, any relevant local housing authority.
721.Subsection (8) requires the regulator to send the HCA notice of its final decision to impose a requirement.
722.Subsection (9) states that a registered provider served with a notice by the regulator under this section has a right of appeal to the High Court.
Section 249 - Management transfer
723.The powers set out in these sections are exercisable following an inquiry as provided for under section 206, or an audit under section 210.
724.Subsections (2)and (3) provide that the regulator may require a registered provider to transfer the management of some or all of its management functions to another specified person. Transfer of management functions may only be imposed with the Secretary of State’s consent (both as to the transfer and the terms).
725.The regulator may use this power where it is satisfied that one of the conditions specified in subsection (1) is met, which are that-
the affairs of the registered provider have been mismanaged, in respect of social housing,
some or all of a registered provider’s management of its social housing is likely to be improved by the transfer of those management functions.
726.Subsection (4) set out the nature of the requirement that will be specified by the regulator and provides that the regulator may determine the scope of the requirement to transfer management.
727.Subsection (5) provides that the requirement will specify the terms and conditions of the appointment, including the remuneration of the person to whom the management is to be transferred, and that these will be determined in accordance with the scope of the management functions to be transferred.
728.Subsection (6) gives the person to whom the management functions are to be transferred the powers necessary to carry out the activities specified in the requirement. The powers may be specified by the regulator in the requirement. In addition the person to whom management is transferred by the requirement will have any other powers in relation to the registered provider's business that are necessary to give effect to the requirement.
Section 250 - Section 249: supplemental
729.This section specifies the process by which the power in section 249 is exercised. Following a statutory inquiry, and having decided that it should direct the transfer of management, subsection (1)requires the regulator to serve the registered provider with a notice specifying-
which of the grounds set out in section 249(1) applies,
that it is considering directing the transfer of the registered provider’s management functions as a consequence, and
setting out the effects of this section.
730.Subsections (2) and (3) provide that the notice must specify a period during which the registered provider may make representations to the regulator. The period must be at least 28 days and begin on the date the provider receives the notice.
731.Subsection (4) provides that the regulator must send a copy of that notice to the HCA and to any other person that it thinks appropriate, with particular consideration to any person who has been involved in identifying to the regulator the matters that form the basis for the regulator’s use of this power
732.Subsection (5) provides that the notice must draw to the registered provider’s attention the provisions of section 125 which provide for a registered provider to make a voluntary undertaking to the regulator at any time on any matter, and the notice must also indicate the extent to which the provision of a voluntary undertaking under that provision would be accepted instead of, or in mitigation of, the direction to transfer management which the regulator is considering.
733.Subsection (6) provides that the notice may be combined with notices about the use of other enforcement powers available under Chapter 7.
734.Subsection (7) provides that the regulator should have regard to the views of (a) relevant tenants, (b) the registered provider, (c) the HCA, and (d) if the regulator thinks it appropriate, any relevant local housing authority, in deciding whether to direct a registered provider, following an inquiry, to transfer management to a specified person.
735.Subsection (8) requires the regulator to notify the HCA of any requirement to transfer management functions to a specified person.
736.Subsection (9) gives the registered provider subjected to a requirement under section 249(2) the right of appeal to the High Court.
Section 251 - Appointment of manager
737.This section gives the regulator the power either to appoint an individual as manager of the registered provider, or to require the registered provider to appoint an individual as manager as set out in subsection (2).
738.The regulator may do this if it is satisfied that a registered provider has failed to meet a standard set out in either section 193 or 194, or that its affairs have been mismanaged in relation to social housing.
739.Subsections (3) to (5) set out the nature of the requirement or the appointment that will be specified by the regulator.
740.Subsection (3) provides that the regulator may determine the matters in respect of which the manager is to be appointed.
741.Subsection (4) provides that the appointment of a manager, or the requirement to appoint a manager, will specify the terms and conditions of appointment, including the remuneration of the manager, and that these will be determined in accordance with the scope of the appointment of the manager, or the requirement to appoint a manager under subsection (3).
742.Subsection (5) gives the appointed manager any powers specified in the requirement or appointment, and any other powers in relation to the registered provider’s business that it requires for the purposes specified in the requirement or appointment. These specifically include the power to enter into agreements and take other action on behalf of the registered provider.
Section 252 - Section 251 supplemental
743.Before it imposes a requirement under subsection (2) of section 251 the regulator must serve a notice on the registered provider specifying which of the grounds listed in subsection (1) of that section apply, warning that it is considering the use of the power set out in section 251, and explaining the provisions of section 252.
744.The effect of subsections (2) and (3) are that the notice must specify a period during which the registered provider may make representations to the regulator. The period must be at least 28 days and begin on the date the provider receives the notice.
745.Subsection (4) provides that the regulator must send a copy of that notice to the HCA and to any other person that it thinks appropriate, with particular consideration to any person who has been involved in identifying to the regulator the matters that form the basis for the regulator’s use of this power.
746.Subsection (5) provides that the notice must draw to the registered provider’s attention the provisions of section 125 which provide for a registered provider to make a voluntary undertaking to the regulator at any time on any matter, and the notice must also indicate the extent to which the provision of a voluntary undertaking under that provision would be accepted instead of, or in mitigation of, the appointment of a manager or the direction to appoint a manager which the regulator is considering.
747.Subsection (6) provides that the notice may be combined with notices about the use of other enforcement powers available under Chapter 7.
748.Subsection (7) requires the regulator to notify the HCA if it appoints a manager or imposes a requirement on a registered provider to appoint a manager.
749.Subsection (8) gives the regulator the power to require the appointed manager to report to it in relation to matters specified in the manager’s appointment.
750.Subsection (9) gives the registered provider the right of appeal to the High Court.
Section 253 - Transfer of land
751.Sections 253 and 254 permit the regulator to transfer the land of a registered provider and broadly replicate paragraph 27 and 29 of Schedule 1 to the 1996 Act.
752.Subsection (1) provides that this section applies if as a result of an inquiry under section 206 or an audit under section 210, the regulator is satisfied that the affairs of a provider have been mismanaged in relation to social housing, or that transfer of the land of a provider would be likely to improve the management of that land.
753.Subsection (2) gives the regulator power to require that the registered provider should transfer its land either to the regulator or to another specified registered provider.
754.Subsections (3) and (4) provide that a requirement may be imposed on a profit-making registered provider only in relation to its social housing and associated land, and that land is considered to be associated if the regulator thinks that it is used in connection with social housing or its management.
755.Subsection (5) provides that a requirement must not be imposed on non-profit registered providers to transfer land to profit-making registered providers.
756.Subsections (6) and (7) concern charities. They specify that this power may not be imposed on a charity registered with the Charity Commission, and although it may be imposed on an unregistered charity, that charity's land may only be transferred to another charity whose objects the regulator thinks are similar to those of the transferring charity.
Section 254 - Section 253: supplemental
757.Subsection (1) provides that a transfer under section 253 shall be on terms specified in or determined in accordance with the regulator’s requirement.
758.Subsection (2) specifies that the price attached to the transfer shall be at least the amount certified by the district valuer as the amount that the property to be transferred would fetch if sold by a willing seller to another registered provider.
759.Subsection (3) provides that the terms of the transfer will include provision for the payment of debts or liabilities in respect of the land to be transferred, whether or not they are secured by a charge on the land.
760.Subsection (4) requires that the Secretary of State must consent to a requirement for a transfer of land under section 253, both in respect of the transfer itself, and the terms of that transfer.
761.Subsection (5) provides that where land is transferred under 253 (2)(a) to the regulator it may either dispose it to a registered provider or if the land is transferred from a non-profit registered provider then it may only dispose it to a non-profit registered provider.
Section 255 – Amalgamation
762.Subsection (1) sets out the cases where this section applies, which are that the affairs of a registered provider which is an industrial and provident society have been mismanaged in relation to social housing, or the amalgamation of an industrial and provident society with another industrial and provident society would be likely to improve the management of its social housing.
763.Subsection (2) gives the regulator power to bring about the amalgamation of the society with another industrial and provident society, and Subsection (3) provides that the regulator can only do so with the consent of the Secretary of State.
764.Subsection (4) specifies that an instrument providing for an amalgamation has the same effect as a resolution by that society under section 50 of the Industrial and Provident Societies Act 1965. Subsections (5) to (7) require that a copy of the instrument be sent to and registered by the Financial Services Authority, at which point the instrument takes effect, and require that the copy is sent for registration within 14 days of the date of execution.
765.Subsection (8) provides that any body created by virtue of an amalgamation must be registered by the regulator and designated as a non-profit organisation, and must also be treated as one pending registration.
