Explanatory Notes

Housing and Regeneration Act 2008

2008 CHAPTER 17

22 July 2008

Structure of the Act

Part 2 – Regulation of Social Housing

Chapter 2 – The Social Housing Regulator
Section 81 - Establishment

166.This section establishes the regulator, which is to be responsible for carrying out the functions of the social housing regulator as set out in this Act.

Section 82 – Membership

167.This section provides for the membership of the regulator. The regulator is to consist of not fewer than four members and up to a maximum of 11 members (including the Chair who is appointed by the Secretary of State) and a Chief Executive (appointed under section 84). The Secretary of State must consult the Chair before appointing other members. Subsection (4) makes clear that former members of the Housing Corporation can become members of the regulator.

Section 83 – Tenure

168.This section sets out the tenure of appointment of appointed members and the circumstances where the Secretary of State may dismiss a member (e.g. absence, bankruptcy or misbehaviour). Appointment terms cannot exceed 5 years although members may be reappointed for additional terms. Members can resign by written notice to the Secretary of State.

Section 84 – Chief executive

169.This section sets out the appointment process of a Chief Executive. The first Chief Executive will be directly appointed by the Secretary of State after consulting the Chair. Subsequent appointments will be made by the regulator subject to approval by the Secretary of State.

Section 85 – Other staff

170.This section provides the regulator with the power to appoint employees.

Section 86- Fundamental objectives

171.Section 86 sets out the fundamental objectives of the regulator. These objectives are separately identified in subsections (2) to (11). The regulator must perform its functions with a view to achieving these objectives so far as possible.

172.Subsection (2) specifies the first objective: to encourage and support a supply of well-managed social housing of appropriate quality sufficient to meet reasonable demands. Social housing is defined in Section 68(1).

173.Subsection (3) specifies the second objective: to ensure that actual or potential tenants of social housing have an appropriate degree of choice and protection.

174.Subsection (4) specifies the third objective: to ensure that tenants have the opportunity to be involved in the management of their social housing.

175.Subsection (5) specifies the fourth objective: to ensure the efficient, effective and economic performance of landlord functions by registered providers of social housing.

176.Subsection (6)specifies the fifth objective: to ensure that registered providers are financially viable and properly managed.

177.Subsection (7) specifies the sixth objective: to encourage registered providers of social housing to contribute to the environmental, social and economic well-being of the areas in which their property is situated.

178.Subsection (8) specifies the seventh objective: to encourage investment in social housing, including by promoting the availability of financial services to registered providers of social housing.

179.Subsection (9) specifies the eighth objective: to avoid creating either as a direct or indirect consequence of its actions an unreasonable burden on public funds.

180.Subsection (10) specifies the ninth objective: to guard against the misuse of public funds.

181.Subsection (11) specifies the tenth objective: to regulate in such a way as to minimise administrative burdens, consistent with its ability to achieve its other objectives.

182.Subsection (12) provides that this will include compliance with the regulators’ Compliance Code issued under the provisions of the Legislative and Regulatory Reform Act 2006.

183.Subsection (13) indicates that there is no significance to the order in which the objectives are listed in the section. It is for the regulator to balance these objectives in carrying out each of its functions as it deems appropriate.

Sections 87 and 88 – Procedure and conflict of interest

184.Section 87 provides for the regulator to determine its own procedure and for the manner in which its procedure is made public. Section 88 states that this procedure must include arrangements for dealing with conflicts of interest of members, employees or members of committees and sub-committees.

Sections 89 and 90 – Committees and delegation

185.Sections 89 and 90 enable the regulator to authorise a committee, a sub-committee, a member or an employee to exercise a function on its behalf. All committees or sub-committees will need to include at least one member of the regulator (but may also include non-members).

Section 91 – Seal

186.This section provides that a document executed under the seal is to be regarded as valid unless the contrary is shown, and that the seal may be authenticated by any person authorised to so do or by a member.

Section 92 - Annual report

187.This section requires the regulator to prepare and publish an annual report, as soon as is reasonably practicable after the end of each financial year. The contents must be a report on the performance of its functions during the preceding financial year. In particular, it will include a statement of the regulator’s accounts, and specify any direction that the regulator has been given by the Secretary of State during the preceding year under section 197. The regulator’s annual report shall include a general description of complaints made to it during the year about the performance of registered providers and of how those complaints have been dealt with. Having prepared the report, the regulator will send a copy of the report to the Secretary of State, who will then lay a copy before Parliament.

Section 93 - General

188.This section gives the regulator power to do anything it thinks necessary or expedient for the purpose of, or in connection with, the performance of a function conferred on it by this Part, or another enactment. In particular the regulator may do anything it thinks appropriate for advancing its fundamental objectives.

Section 94 - Studies

189.This section gives the regulator a power to commission studies or to carry them out itself with the objective of improving the economy, efficiency and effectiveness of registered providers. Where the regulator carries out or commissions such studies, it may publish a report.

Section 95 - Financial assistance

190.This section gives the regulator a power to give financial assistance in certain circumstances.

191.Subsection (1) gives the regulator power to give financial assistance in connection with research, guidance, best practice and tenant involvement.

192.Subsection (2) sets out a range of means by which the regulator may give financial assistance, including grant, loan, or the defraying of expenditure on behalf of a person. Subsection (2)(d)notes that the regulator may also give financial assistance in any other way, with the specified exceptions of purchasing loan or share capital of a body corporate or the giving of a guarantee or indemnity.

193.Subsection (3) gives the regulator a separate power to give financial assistance to a registered provider by lending money or giving a guarantee or indemnity. Such assistance may only be given with the consent of the Secretary of State (subsection (4)) given with the approval of the Treasury.

Section 96 – Evidence

194.This section provides that the regulator may, in considering whether to exercise a power, have regard to information from any source including, in particular, from tenants, bodies representing tenants, local housing authorities, or an ombudsman.

Section 97 – Information, advice &c.

195.This section enables the regulator to publish ideas or information; to undertake research in relation to social housing; and to provide guidance, advice, education or training.

196.Subsection (2) enables the regulator to arrange for someone else to carry out all these activities on its behalf, and also joint working with other persons engaged in the work set out in subsection (1).

197.Subsection (3) specifies that advice may be given to unregistered and prospective housing associations. This provision broadly replicates the effect of section 77 of the Housing Associations Act 1985.

Section 98 – Tenant involvement

198.Section 98 requires the regulator to promote awareness of its functions among tenants of social housing, where appropriate consult tenants about the exercise of its functions, and where appropriate involve them in the exercise of its functions. It also requires the regulator to publish from time to time a statement about how it will meet this duty, following consultation.

Section 99 – Remuneration

199.This section provides for the regulator to make payments to appointed members and employees. Subsection (1) enables the regulator to pay remuneration, allowances, pensions and gratuities to its members although subsection (2) makes clear that rates and eligibility will be determined by the Secretary of State. Subsection (3) provides, if the Secretary of State considers there are special circumstances, for the regulator to make compensation payments to a person who ceases to be an appointed member.

200.Subsection (4) gives the regulator the power to pay its employees remuneration, allowances, pensions and gratuities.

Section 100 – Charging

201.This section allows the regulator to charge for giving advice, conducting research or providing other services. This broadly replicates the effect of section 77 of the Housing Associations Act 1985.

Section 101 – Assistance by Secretary of State

202.This section enables the Secretary of State to make payments to the regulator by way of grant or loan, and for those payments to be subject to conditions.

Section 102 – Borrowing

203.This section specifies that the regulator may borrow by way of an overdraft or otherwise, for the short-term management of its finances; or from the Secretary of State. It may not borrow otherwise.

204.This broadly replicates the effect of section 92 of the Housing Associations Act 1985. Those powers will not be needed by the regulator as it will not be investing in affordable housing.

Sections 103 and 104 – Accounts and Financial year

205.Section 103 sets out provisions for ensuring that the regulator maintains and publishes its accounts, the form of which will be directed by the Secretary of State. These accounts are to be sent to the Secretary of State, and to the Comptroller and Auditor General. Section 104 defines the regulator’s financial year.

Relationship with other bodies
Section 105 - Co-operation with the HCA

206.Subsection (1) requires the regulator to co-operate with the HCA.

207.Subsection (2) requires the regulator to consult the HCA on matters likely to interest it. This mirrors a parallel provision at section 37, requiring the HCA to co-operate with the regulator, and to consult the regulator on matters likely to interest it.

Section 106 - Direction to the HCA

208.This section gives the regulator a power to direct the HCA not to give financial assistance to a specified registered provider. The regulator’s direction may only be made in respect of the HCA’s power to give financial assistance under section 19 in connection with social housing.

209.The purpose of this power is to prevent financial assistance from being given to a registered provider where there are serious concerns about mismanagement or about the viability of the organisation. This power may be used in the most serious interventions by the regulator, as described in subsection (2):

210.Subsection (3) states that a direction may prohibit the HCA from giving assistance of a specified kind (whether or not in pursuance of a decision already taken and communicated to the registered provider). This means that the regulator could prohibit some forms of financial assistance while allowing others. It also means that the regulator could prohibit financial assistance even where, for example, a funding agreement is already in place.

211.Subsection (4) prevents the regulator from issuing a direction prohibiting grant to a registered provider where that grant is to be given in respect of discounts given by the provider on disposals of dwellings to tenants. This ensures that the regulator’s powers do not interfere with the HCA’s statutory duty to pay grants under section 35 (duty to give financial assistance in connection with certain disposals).

212.Subsection (5) states that a direction shall have effect until withdrawn.

Section 107 - Collection

213.Section 107 gives the regulator, for purposes connected with its functions, the power to require documents or information from any person it believes may possess them, concerning the financial or other affairs of registered providers or the activities or proposed activities of a registered provider or a person who has applied to become a registered provider.

214.The regulator is likely to use this power to follow up concerns raised by tenants, local authorities or others by asking for specific information from the provider in addition to standard performance information obtained under section 204. The regulator may ask for the same types of information from profit-making registered providers as from non-profit providers.

215.Subsection (2) provides that a requirement may not be imposed on a person other than the body to which the document or information relates, unless the body has been required to provide the document or information but failed to do so; or the regulator thinks the body is unable to provide it.

216.Subsection (3) provides that the regulator may specify the form and manner in which it is to be provided and when and where it is to be provided.

217.Subsection (4) permits the regulator to copy or record the documents or information required by it under this section.

218.Subsection (5) specifies that it is an offence to fail to comply with a request without a reasonable excuse. Subsection (3) of section 108 provides that a person guilty of this offence is liable on summary conviction to a fine up to level 5 (currently £5000) on the standard scale.

219.Subsection (6) further specifies that it will also be an offence intentionally to alter, suppress or destroy information or documents to which a request for information relates. Subsection (4)of section 108 provides that a person guilty of this offence is liable either on summary conviction to a fine up to the statutory maximum (currently £5000), or on conviction on indictment to imprisonment for a term of no more than 2 years, or a fine, or both.

220.Subsection (7) provides that if a person who has been required to provide information by the regulator under this power fails to comply, then the regulator may apply to the High Court for an order to remedy that person’s failure to provide the information required. Subsection (6) of section 108 provides that such an order may include a provision for costs.

Section 108Section 107: supplemental

221.Subsection (1) of section 108 limits the power to require information in section 107 such that the regulator cannot require a person to disclose anything that they would be entitled to refuse to disclose in High Court proceedings on the grounds of legal professional privilege.

222.Similarly subsection (2) specifies that a requirement for information does not require a banker to breach a duty of confidentiality owed to a person who is not the registered provider to whose affairs or activities the documents or information relates or the subsidiary or associate of that registered provider.

223.Subsection (5) provides that prosecutions may only be brought by or with the consent of the regulator or the Director of Public Prosecutions.

Section 109 - Disclosure

224.Subsection (1) provides that a public authority may disclose information to the regulator provided that the authority thinks the disclosure is necessary for a purpose connected with the regulator’s functions. Subsection (8) defines a “public authority” as a person with functions of a public nature, without restriction as to the location where those functions are carried out.

225.Subsection (2) provides for the regulator to disclose information to a public authority (as defined in subsection (8)) if the regulator thinks the disclosure is necessary for any purpose that is either connected with the regulator’s own function, or with the functions of the public authority to which the information is disclosed.

226.Subsection (3) provides that the regulator may disclose information to a person acting on its behalf (but who is not a public authority) for a purpose connected with the regulator’s functions, for example an appointed auditor.

227.Subsections (4), (6) and (7) provide that such disclosures may be subject to restrictions on further disclosure and that any disclosure in contravention of such a restriction is an offence. A person who is guilty of this offence will be liable on conviction to a fine not exceeding level 3 (currently £1000) on the standard scale.

228.Subsection (5) means that a public authority or the regulator will not be able to disclose information under this section if doing so would breach a statutory prohibition on disclosure imposed by other legislation.