Policy paper

Social housing regulation: draft clauses - explanatory notes

Published 29 March 2022

This was published under the 2019 to 2022 Johnson Conservative government

This policy paper was withdrawn on 15 June 2022

This content is no longer current. Please see the Social Housing (Regulation) Bill for the latest content.

Applies to England

Disclaimer

These Explanatory Notes are not yet complete. This document will be updated and further information added for introduction of this legislation.

What these notes do

These Explanatory Notes relate to Draft Clauses on Social Housing Regulation as published on 29 March 2022.

• These Explanatory Notes have been prepared by the Department for Levelling up, Housing and Communities in order to assist the reader. They do not form part of the draft Clauses and have not been endorsed by Parliament.
• These Explanatory Notes explain what each draft Clause would mean in practice; provide background information on the development of policy; and provide additional information on how the draft Clauses would affect existing legislation in this area.
• These Explanatory Notes are best read alongside the Clauses. They are not, and are not intended to be, a comprehensive description of the Clauses.

Commentary on provisions of Clauses

Part 1: Clauses for publication in Draft

Clause 1: Fundamental Objectives

1. Clause jAcrl1 amends Section 92K of the Housing and Regeneration Act 2008 (the 2008 Act) which sets out the fundamental objectives that guide the Regulator of Social Housing’s (the regulator) approach to regulation. These are currently comprised of an economic regulation objective and a consumer regulation objective. The economic objective is about good governance, financial viability and value for money of registered providers that maintains lender confidence and protects the taxpayer. The consumer objective is about supporting the provision of quality social housing that is well managed and ensuring tenants have choice and protection and can hold their landlord to account. The regulator is also accountable to Parliament for the discharge of these fundamental objectives. This amendment specifies that the regulator must support the provision of housing that is ‘safe’ in addition to the existing expectations of being ‘well managed’ and of ‘appropriate quality’. It also adds a new objective for the regulator to require registered providers of social housing to be transparent with their tenants. These changes were set out in the Charter for Social Housing Residents: the Social Housing White Paper (the Social Housing White Paper).

Clause 2: Advisory panel

2. Clause j02AB amends the 2008 Act by inserting section 96A(1) to require the regulator to set up an Advisory Panel. The Advisory Panel will be comprised of a range of voices from across the sector, including tenants and landlords, enabling them to inform the regulator on a wide range of matters connected to the regulation of social housing. The regulator will refer to the Panel when they see fit, but the Panel will also be able to proactively raise issues affecting social housing regulation with the regulator. The Panel must include, but is not restricted to, the persons specified in subsection 4.

3. The Panel will provide advice on matters including, but not limited to, significant proposed changes to the regulatory standards and codes of practice, proposed changes to the regulator’s approach to regulating the standards, and key sector issues and risks. For example, the regulator may engage the Panel on the design and implementation of new consumer standards and how it engages with key stakeholders, such as tenants, in helping to shape the regulator’s view prior to formal consultation.

Clause 3: Relationship between regulator and housing ombudsman

4. The regulator and housing ombudsman both have a role in overseeing the performance of social housing landlords and making sure that landlords treat their tenants fairly. The regulator regulates registered providers of social housing in England and housing ombudsman seek to resolve complaints from residents about registered providers. The Housing Act 1996 (the 1996 Act) allows for multiple housing ombudsman schemes to be approved by the Secretary of State, but only one has been approved so far.

5. Clause jD1 amends the 2008 Act and the 1996 Act to add measures on the relationship between the regulator and a housing ombudsman in order that they can exchange information quickly and effectively to provide better protection for tenants.

6. A new section, 100H, is added to the 2008 Act requiring both bodies to cooperate and to prepare, publish and regularly review a memorandum of understanding outlining how they will do so.

7. Housing ombudsman is added to the relevant lists of bodies in the 2008 Act that the regulator and Secretary of State are required to consult when setting standards and giving directions to the regulator respectively.

8. The 1996 Act is amended to require an ombudsman to consult the regulator about changes to its scheme before these can be approved by the Secretary of State.

Clause 4: Collection of information

9. Clause j01AB amends sections 107, 108, 203 and 208 of the 2008 Act to broaden the existing power for the regulator to require third parties to provide documents or information that the regulator believes to be relevant to its regulatory functions. At present, the regulator may only require information from third parties if the registered provider they are linked to has failed to provide the information or documentation in question, or the regulator thinks the registered provider is unable to provide it. This change will enable the regulator to request information directly from third parties regardless of the registered provider’s willingness to provide information.

10. Existing legislation limits the power to request information to:

• That which relates to the financial or other affairs of a registered provider;
• Activities carried out by a person who is or has applied to become a registered provider; or
• Activities carried out by a local authority in England which is, or may become, a provider of social housing.

11. By broadening the existing power, the policy aim is to ensure the regulator is able to follow information relating to funds or assets once they have left the regulated sector. The existing power is also amended to enable the regulator to authorise another person to exercise those powers. The authorisation must specify the extent to which that person is authorised to exercise any of the regulator’s powers under this section. This will enable specialists, such as forensic accountants, to conduct investigations into a provider on behalf of the regulator if necessary.

12. This clause further amends section 107 by making it an offence to, in purported compliance with a requirement under this section, knowingly or recklessly provide the regulator with a document, information or an explanation which is false or misleading.

13. It is intended that this power will provide the regulator with the powers necessary to be able to access information to understand better how a registered provider is operating and in turn improve its investigation into concerns about a provider’s compliance with regulatory standards. For example, the power would enable the regulator to follow money paid to bodies outside of the social housing sector and investigate potential fraud by examining the financial accounts of organisations thought to be financially deriving profits from the activities of a registered provider. As set out in the Social Housing White Paper, the intention is for this to improve the ability of the regulator to conduct effective economic regulation of private registered providers of social housing.

Clause 5: Registration criteria

14. Clause jAcrl2 enables the regulator to make the registration of social housing providers conditional upon their ability to meet, on registration, regulatory standards. Under section 112 of the 2008 Act, the regulator is able to set criteria which specify the financial, constitutional and management arrangements that must be satisfied by new registrants. This change allows the regulator to add to that. The change will allow the regulator to set criteria that require providers to be able to meet, on registration requirements related to all its standards – for instance, on its consumer standards in relation to health and safety and adopting suitable procedures for addressing tenant complaints - before they become a registered provider.

Clause 6: Appointment of health and safety lead by registered provider

15. jHSO1 inserts new clauses into the 2008 Act that require registered providers of social housing to designate a person to act as lead on certain functions relating to the provider’s compliance with its health and safety obligations towards tenants (known as the ‘health and safety lead’). Legal responsibility for ensuring compliance with relevant obligations in relation to the health and safety of tenants will remain with the registered provider.

16. The registered provider may only designate an individual who meets the relevant criteria set out in section 126A, which ensures the health and safety lead is an employee of the provide or an officer.

17. The health and safety lead’s functions, as outlined in section 126B, are to monitor the provider’s compliance with health and safety requirements, to assess risks of failure to comply, to notify the provider’s responsible body of any material risks or failures to this compliance, and to advise on steps to ensure the provider addresses these. The relevant health and safety requirements are statutory requirements that relate to the health and safety of tenants of social housing.

18. The registered provider is under duties, under section 126C, to ensure that the health and safety lead has the authority, capacity and resources needed to carry out their role. The registered provider is also required to notify the regulator of the contact details of the health and safety lead and publish this information so that tenants know who it is and can contact them. The registered provider can nominate a person to carry out the role if the health and safety lead is unable to do so due to absence or illness.

19. JHSO1 also amends the 2008 Act in order to reflect the consequential amendments that come from the addition of these sections.

Clause 7: Standards relating to consumer matters

20. jAcrl3ALT amends section 193 of the 2008 Act by adding ‘safety’ to the list of consumer matters that the regulator may set a standard for. Standards are the primary tool the regulator uses to regulate registered providers of social housing. An explicit reference to safety in accommodation is needed in the consumer standard setting power as result of jAcrl1, which adds safety to the Regulator’s fundamental objectives in section 92K.

Clause 8: Standards relating to information and transparency

21. jAcrlALT adds new section 194A to the 2008 Act allowing the regulator to set standards for registered providers on the provision of information and transparency to their tenants and to the regulator, implementing the commitments set out in the Social Housing White Paper.

22. Subsection (2) sets out examples of things that the standards could contain. Paragraph (a) relates to provisions for an ‘Access to Information Scheme’ for tenants; paragraph (b) relates to requirements for registered providers to self-report breaches of the regulator’s standards to the regulator; paragraph (c) relates to requirements on registered providers to provide their tenants with a set of financial metrics on how much they are spending on management costs and executive renumeration; and to provide a clear breakdown of how their income is being spent.

23. jAcrlALT also amends the 2008 Act in order to reflect the consequential amendments that come from the addition of section 194A.

Clause 9: Code of practice: standards relating to consumer matters

24. jAcrl4 amends section 195 of the 2008 Act so that the regulator is able to issue a code of practice in relation to its consumer standards. A code of practice amplifies the standard, it does not bind providers. This means registered providers will have a better idea of what is expected of them, and tenants will have a better idea of what to expect from their landlords. The regulator can currently issue a code of practice which relates to economic standards made under section 194 of the 2008 Act and it publishes codes of practice on financial viability and governance and value for money. This clause permits the regulator to issue a code of practice for any of its standards, ensuring there is parity between these areas of regulation.

Clause 10: Direction by Secretary of State

25. This clause amends section 197 of the 2008 Act by adding ‘safety’ to a list, in subsection (2), of themes that directions made under subsections (1)(a) and (b) to the regulator by the Secretary of State must relate to. The themes specified in subsection (2) are quality of accommodation, tenure, rent, tenant involvement, and methods of assisting for tenants to exchange tenancies. The change makes section 197 consistent with changes made in jAcrl1 where ‘safety’ is made explicit in the fundamental objectives for the regulator.

26. The clause also adds a new subsection (2A) which allows the Secretary of State to issue a direction to the regulator in relation to standards requiring providers to comply with rules about the provision of information to their tenants about the management of their housing.

27. This amendment, in partnership with jAcrlALT which sets out powers for the regulator to set standards relating to information and transparency, will enable the Secretary of State to direct the regulator to introduce requirements on private registered providers to follow an ‘Access to Information scheme’, which allows tenants to access information from their landlord about how their housing is managed, as set out in the Social Housing White Paper.

Clause 11: Intervention powers: removal of “serious detriment” test

28. Section jBcrl7 amends section 198A of the 2008 Act. This section removes the requirement that the regulator must have reasonable grounds to suspect that a breach of the consumer standards has caused or could cause ‘serious detriment’ to the registered provider’s tenants or potential tenants. Examples of ‘serious detriment’ would include harm or potential harm including, but not exclusively:

• Health and safety;
• Loss of home;
• Unlawful discrimination;
• Loss of legal rights; and
• Financial loss.

29. The section provides that the serious detriment test no longer applies to the exercise of powers set out in section 198A(3) where there has been a failure to meet a consumer standard (and repeals that subsection), or to the exercise of powers where there is a risk that a registered provider will fail to meet a standard, if no action is taken (section 198A(4)).

30. The section amends section 198A of the 2008 Act by removing subsection (6). This means that the regulator is no longer subject to the requirement to have regard to information received from various specified bodies when considering whether to exercise a monitoring or enforcement power following a breach of consumer standards, as set out within subsections (1) to (4). This requirement was introduced at the same time as the serious detriment test and is no longer necessary or appropriate. The regulator will continue to be able to consider evidence from any sources, in accordance with section 96 of the 2008 Act. The regulator will also continue to have a duty to exercise its functions in a way that is proportionate and minimises interference, as required by section 92K of the 2008 Act.

31. This measure will enable the regulator to use its monitoring and enforcement powers in Chapters 6 and 7 of the 2008 Act in relation to a failure to meet a consumer standard, without first applying the serious detriment test. This will enable the regulator to regulate consumer standards proactively and to bring parity between economic and consumer regulation, as committed to in the Social Housing White Paper. Abolishing the serious detriment test will allow the regulator to intervene on grounds of a breach or potential breach of the consumer standards, whether or not the breach in question has caused or may cause tenants serious harm.

Clause 12: Performance monitoring

32. jAcrl13 amends the 2008 Act to insert a new section 198C, which gives the regulator a power to direct registered providers to collect, process and publish information concerning their performance in relation to standards set by the regulator that apply to them. The regulator can apply these directions to all registered providers or only to specified cases, circumstances or registered providers. Subsection (2) provides a non-exhaustive list of the things the regulator may direct on and allows these directions to be specified or described. Subsection (5) enables the regulator to require providers to share their information and analysis related to their compliance with regulatory standards, and to provide detail about how this information is collected, analysed and published so that the regulator can get assurances on the quality of the information and processes involved. This will give the regulator a clear power to introduce new Tenant Satisfaction Measures, as set out in the Social Housing White Paper. These measures will provide tenants with greater transparency about their landlord’s performance. They will also inform the regulator about how a provider is complying with the consumer standards under a proactive consumer regulation regime.

33. jAcrl13 also amends section 220 and section 227 so that a failure by a registered provider to comply with a direction made under section 198C or provide information requested under subsection (5) means that the regulator is permitted to take enforcement action by issuing an enforcement notice or imposing a financial penalty. The regulator will also be able to require a performance improvement plan as enforcement action for non-compliance with a direction under section 198C.

Clause 13: Surveys

34. Clause jBcrl15 amends sections 199 and 200 of the 2008 Act and adds new sections 199A and 199B. The amendments reduce the minimum notice period the regulator is required to provide to the registered provider for an authorised person to enter to conduct a survey of the condition of premises, in cases where the regulator suspects that the provider may be failing to maintain premises in accordance with standards under section 193. The changes provide that the regulator may apply for a warrant to authorise a person to gain entry to the premises in specified circumstances.

35. Amendments to section 199 remove subsections (4), (5) and (6), which related to powers of entry to conduct the survey and related notification requirements, as these are provided for in the new section 199A. Subsection (9) is added, which allows arrangements for payment to be made when a person other than a member of the regulator’s staff is carrying out surveys.

36. Section 199A relates to powers to enter in order to conduct a survey without a warrant. The provision provides for an authorised person to be able to enter premises at any reasonable time in order to conduct a survey, providing they give the registered provider at least 48 hours’ notice, and the occupier, or any of the occupiers (if any), 24 hours’ notice. Section 199A(3) provides that these notification requirements may be waived by the provider and occupier if they choose to do so. Subsection (4) provides that the notice may state, if entry were to be refused, that an authorised person would propose to apply for a warrant under section 199B. Subsection (5) allows for notice to be provided to occupiers (under subsection (2)(b)) by fixing it to some conspicuous parts of the premises.

37. Section 199B is added, enabling a warrant to be obtained from a justice of the peace for an authorised person to conduct a survey under section 199. Subsection (1) requires a justice of the peace to be satisfied, on sworn information in writing, that entry to the premises is reasonably required by an authorised person to carry out a survey. Subsection (2) provides that the justice of the peace must be satisfied that entry to the premises has been sought under 199A (entry without a warrant) and refused, or that the premises are unoccupied or the occupier is temporarily absent, or that there are reasonable grounds to believe an authorised person cannot enter without obtaining a warrant. Subsection (3) provides that the warrant allows for entry at a reasonable time, and using reasonable force if necessary. Subsection (4) states that a warrant is in force until the purpose for which entry is required is satisfied, meaning that the survey has been completed in full. Subsection (5) enables an authorised person executing a warrant to take persons, equipment or materials as required in order to conduct the survey.

38. Subsection (6) requires the authorised person to leave the premises as effectively secured against trespassers as they found them, if they enter the premises in circumstances where they are unoccupied or the occupier is temporarily absent.

39. Under subsection (7), the authorised person who has entered or is seeking to enter using a warrant must produce a copy of the warrant to the registered provider or the occupier if requested.

40. This clause amends section 200 to remove an offence for a provider who fails to give occupiers notice ahead of a survey taking place. This is removed as the amendments to section 199, and the addition of section 199A, mean it is the duty of the authorised person to give notice, rather than the provider. Subsection (4A) is added to section 200, making it an offence for a person to obstruct an authorised person exercising a warrant conferred under section 199B. Subsection (4) also makes it an offence for a registered provider or an officer of a registered provider to obstruct an authorised person in exercising a power under section 199A.

41. A registered provider, or an officer of a registered provider, who obstructs an authorised person in exercising a power under section 199 commits an offence.

42. These changes give the regulator the power to arrange for surveys of properties more quickly, by reducing the notice period which must be given, and enabling a warrant to be sought to gain entry in cases where necessary. This ensures a survey can take place promptly.

Clause 14: Regulator’s duty to publish guidance

43. jAcrl6 removes a requirement for the regulator to publish guidance about the information it receives about the performance of registered providers. The regulator does not currently receive performance information, and so does not publish guidance on this. However, the regulator is being given powers through jAcrl13: “Performance monitoring” to require landlords to provide performance information and set directions in relation to this, and this new clause contains separate requirements for the regulator to bring these to the attention of every registered provider they apply to.

Clause 15: Performance improvement plans

44. Clause jBcrl12 will add sections 218A, 218B, 218C and 218D to the 2008 Act enabling the regulator to require a registered provider of social housing to prepare and implement a performance improvement plan (PIP). This enforcement measure was first promised in the Social Housing White Paper.

45. A PIP is a plan which the regulator will be able to require landlords who are failing to meet regulatory standards to produce and follow. The change will allow the regulator to hold a registered provider to account in relation to how, and by when, it proposes to address an issue that has been identified. It will also allow tenants to be aware of the actions their landlord is required to carry out and when, so they can hold their landlord to account. As well as increasing the tools available to the regulator and underpinning the new consumer regulation by allowing the regulator to intervene proactively in cases where providers do not meet standards, this change will promote improved landlord performance and service delivery for the benefit of tenants. It provides an opportunity for registered providers to address issues prior to the taking of further enforcement action by the regulator.

46. Section 218A relates to the PIP notice itself. Subsection 218A(1) sets out the grounds on which the regulator can give a provider a PIP notice. Any one of the below cases constitutes such grounds:

• The provider has failed to meet a standard under section 193, 194 or 194A. These sections refer to consumer standards, economic standards, and new standards relating to information and transparency, created by the clauses;
• There is a risk the provider could fail to meet a standard under section 193, 194 or 194A unless action is taken by the provider or the regulator;
• The provider has failed to comply with directions under the new section 198C. These are directions relating to collecting and publishing performance information;
• The interests of the registered provider’s tenants of social housing require protection; and
• The registered provider has given an undertaking under section 125 and failed to comply with it. A voluntary undertaking is a commitment made to the regulator to carry out specified actions.

47. Subsection 218A(2) sets out requirements for the PIP notice. The PIP notice must specify on which of the grounds (listed above) the PIP is given; identify the issues which led the regulator to be satisfied of those grounds; require the provider to prepare and submit to the regulator a plan setting out the action the provider will take to address the issues identified; specify the date by which the PIP must be submitted to the regulator; require the provider to publish a PIP if it is approved by the regulator and specify the manner of such publication; and explain the effect of subsections (3) and (4) and sections 218B to 218D meaning it must explain the wider effects of the PIP, as set out below.

48. The regulator may withdraw the PIP by notice to the provider. If a provider fails to comply with a PIP notice, the regulator must consider exercising another enforcement power under Chapter 6 or 7.

49. Section 218B sets out duties for the regulator and provider relating to the PIP. The regulator is required to either approve a PIP submitted or reject it and provide reasons for doing so. The provider is required to implement the PIP that has been approved by the regulator. If a PIP is not approved by the regulator, the provider is deemed to have failed to comply with the PIP notice. Following a rejection, the regulator can consider exercising another enforcement power. Subsection 218B(4) places a duty on the provider to submit a copy of a PIP which has been approved by the regulator to a tenant as soon as practicable, but only if the tenant makes a written request for a copy.

50. Section 218C relates to the cancellation of a PIP. The regulator can, by notice to the provider, cancel a PIP which it has approved. This could, for example, be because the initial concerns which led to the PIP notice being issued are no longer held or have been adequately addressed. If a PIP is cancelled, the provider’s duties to publish a PIP which has been approved, to implement the PIP, and to provide a copy of the PIP on request from a tenant, no longer apply. However, if the provider breached one of these duties prior to the plan being cancelled, this cancellation does not impact action being taken in relation to this breach.

51. Section 218D sets out appeals provisions for providers that have been required to prepare and implement a PIP. Providers can appeal to the High Court against a decision by the regulator to issue a PIP notice within 28 days of the provider receiving the notice. The appeal is suspensory, meaning that the requirement for the PIP to be prepared and submitted is suspended pending the final outcome (or withdrawal) of the appeal. However, if a PIP has already been approved, an appeal does not suspend the provider’s duties to publish, implement, or provide copies of the PIP.

52. Clause jBcrl12 also amends section 220 to add failure to comply with a PIP notice or implement a PIP which has been approved by the regulator as grounds for the regulator giving a provider an enforcement notice.

53. Sections 227 and 237 are amended, so that failure to comply with a PIP notice, and failure to provide a copy of a PIP to a tenant who requests one, are added as grounds for the regulator to impose a financial penalty on the provider and to award compensation to a person who has suffered as a result of that failure, e.g. a tenant.

54. Sections 247 and 251 are amended to add failure to comply with a PIP notice as grounds for the regulator to require a provider to invite persons to apply to undertake management functions of the provider and select from the applicants to make an appointment, and to appoint a manager to a provider. Section 252A is also amended so that failure to comply with a PIP notice is added as further grounds for the regulator to appoint advisers to a local authority or to require the authority to appoint advisors.

Clause 16: Extension of powers to charities who have not received public assistance

55. Clause jBcrl9 amends the 2008 Act to repeal provisions which prevent the regulator from exercising various enforcement powers against registered charities who have not received public assistance. It also makes consequential amendments to remove provisions which define charities that have not received public assistance (as these are no longer required). These changes will allow the regulator to exercise the following enforcement powers against registered charities which have not received public assistance:

• Holding an inquiry (section 206);
• Placing a restriction on the charity’s financial dealings during an inquiry or as a result of an inquiry where the regulator has identified mismanagement of its affairs (sections 256 and 257);
• Suspending an officer, employee or agent of the charity during an inquiry (section 259);
• Removing or suspending an officer, employee or agent of the charity as result of an inquiry where the regulator has identified mismanagement (section 260);
• Removing an officer where they are unfit to fulfil their position (e.g. being made bankrupt, being absent from duties, suffering from mental illness which affects their ability to carry out their role, etc) (section 266); and
• Appointing a new officer to replace an officer who has been removed or suspended (section 269).

56. These changes will give the regulator stronger enforcement powers to use in relation to registered charities that have not received public assistance. This will allow the regulator to ensure these charities meet consumer standards, and ensure they are held to account by their tenants in the same way as other registered providers of social housing.

Clause 17: Notification of Charity Commission of exercise of enforcement powers

57. Clause jBcrl10 amends the 2008 Act to introduce a requirement for the regulator to inform the Charity Commission when it exercises certain enforcement powers against registered charities. The clause amends the sections listed below to add provisions requiring such notification of the Charity Commission when the following powers are exercised:

• Placing a restriction on the charity’s financial dealings during an inquiry or following an inquiry where the regulator has identified mismanagement of its affairs (sections 256 and 257);
• Removing an officer where they are unfit to fulfil their position (e.g. being made bankrupt, being absent from duties, suffering from mental illness which affects their ability to carry out their role, etc) (section 266); and
• Appointing a new officer (section 269). The clause amends this from a requirement to consult the Charity Commission to a requirement to notify.

58. These amendments ensure the Charity Commission is fully informed about the activities of the regulator relating to registered charities who are also registered providers of social housing. The change to section 269, from a requirement to consult to a requirement to notify, allows the regulator to act more quickly in urgent circumstances where a social landlord of this nature fails to meet a consumer standard.

Clause 18: Removal of ground of failure to comply with section 23 of the Welfare Reform and Work Act 2016

59. Clause jBcrl11 amends the 2008 Act to repeal provisions which allowed a range of enforcement powers to be used by the regulator on the grounds that a registered provider of social housing failed to comply with social housing rent requirements in the Welfare Reform and Work Act 2016. The requirements in the Welfare Reform and Work Act 2016 have now fallen away because they applied in relation to registered providers only for 4 relevant years. The 4 relevant years expired on the 30th March 2021. Consequently, those grounds are redundant.

Clause 19: Electrical safety standards

60. This clause amends section 122 of the Housing and Planning Act 2016 (the 2016 Act). It extends the power for the Secretary of State, by regulations, to impose duties on landlords so that these duties can also be imposed on landlords who are registered providers of social housing in England, rather than just private landlords. The duties imposed by regulations under this power are for the purposes of ensuring that electrical safety standards are met during any period when the premises are occupied under a tenancy.

61. Such duties relating to electrical safety standards might include ensuring checks of electrical installations and/or appliances are carried out. Regulations may impose obligations on registered providers with regards to the frequency of the electrical checks and the expertise expected of any persons who undertake such checks. The regulations may also require the landlord to obtain a certificate from a qualified person confirming that the standards are met, and to give a copy to the tenant or prospective tenant.

62. Regulations made under section 122 of the 2016 Act may make provision for the enforcement of any duties imposed by such regulations, including the use of financial penalties and rights of appeal (see section 123 of the 2016 Act).

Schedule: Regulatory and Enforcement powers

Inspections: Secretary of State approval

63. Schedule JBCRL8SCH, paragraph 3 amends section 201 of the 2008 Act to remove the requirement for the regulator to obtain the Secretary of State’s consent to use its own staff to conduct inspections of social housing properties. Section 201 provides that the regulator may arrange for a person to inspect a registered provider’s performance of its functions in relation to the provision of social housing, or the financial or other affairs of a registered provider.

Inquiry appointments

64. Schedule JBCRL8SCH, paragraph 4 amends section 206 of the 2008 Act to provide that consultants of the regulator are no longer ineligible for appointment to conduct an inquiry.

65. Section 206 gives the regulator the power to hold an inquiry where it suspects that the affairs of a registered provider may have been mismanaged. Subsection (3) restricts who can be appointed to conduct an inquiry to individuals who are independent of the regulator. This paragraph amends subsection (4) so that consultants of the regulator are no longer listed as individuals who are not independent of the regulator. The definition of ‘consultant’ in subsection (5) is removed.

66. This amendment ensures that the regulator can appoint independent inquirers with the right skills on a timely basis.

Extend Enforcement Powers to For-Profit providers

67. Clause JBCRL8SCH amends the 2008 Act to extend a number of the regulator’s enforcement powers so that they also apply to for-profit providers of social housing. This is achieved by replacing “non-profit” (registered provider), with “private” (registered provider) in the following sections of the 2008 Act:

• Section 256 – restrictions on dealings during inquiry;
• Section 257 – restrictions of dealings following inquiry;
• Section 259 – suspension during inquiry;
• Section 260 – removal or suspension following inquiry;
• Section 266 – removal of officers; and
• Section 269 – appointment of new officers.

68. These amendments more closely align the regulation of for-profit providers with non-profit providers, to provide equal protection for tenants regardless of the profit status of their landlord.

Remove cap on fines

70. Schedule JBCRL8SCH amends the 2008 Act to remove a cap on the level of penalty the regulator is able to impose on registered providers. Section 227 provides for the grounds on which the regulator can issue penalties to registered providers. As committed to in the Social Housing White Paper, section 229 is amended to allow the regulator to issue penalties of an unlimited amount. This gives the regulator flexibility to determine the appropriate level of penalty depending on the circumstances.

71. The schedule also amends sections 226 and 227 to allow the regulator to issue fines to all registered providers, including local authority providers. This aligns the regulator’s enforcement powers for local authority providers with those it has in relation to private registered providers.

Appointment of a manager

72. Schedule JBCRL8SCH, paragraph 8 amends section 251 of the 2008 Act to provide that the regulator may appoint organisations as a manager of a private registered provider, by removing the reference to appointing an ‘individual’.

73. Paragraph 9 of the Schedule amends Section 252 to reduce the amount of time the provider has to make representations to the regulator after receiving notice that it intends to appoint a manager under section 251. The time period is reduced from 28 days to 5 days from receipt of the notice. Sub-section (2A) is inserted into section 252 to provide that the regulator may not appoint a manager within the period of 5 days unless the registered provider consents.

74. Section 251 provides that the regulator can appoint a manager of a private registered provider of social housing that has failed to comply with regulatory standards or been found to have mismanaged its affairs. The amendment in paragraph 8 removes the reference to an ‘individual’, enabling the regulator to appoint an organisation as a manager if required. This will allow the regulator to draw from a wider pool of potential managers. Organisations may be more effective in cases where wider expertise, skills and capacity are required to improve the management of a provider quickly and effectively.

75. Section 252 states that the regulator must give the registered provider notice of its intention to appoint a manager. Paragraph 9 amends section 252 to change the 28-day minimum representations period to a 5-day period. The 5-day representations period will commence on the day that the provider receives the notice. The regulator will not be able to appoint a manager until the expiry of this 5-day period, unless the registered provider consents. The reduction in the period for representations will allow the regulator to intervene quickly and take urgent action to remedy issues such as critical financial viability problems or serious deficiencies in service delivery.

Suspension and removal of officers

76. Schedule JBCRL8SCH amends sections 259, 260 and 266 of the 2008 Act to add new grounds on which the regulator can remove or suspend the officers of registered providers. The regulator may suspend an officer by order, but this order expires 6 months after the regulator publishes its final report following an inquiry or may be revoked before the expiry of 6 months.

77. Section 259 provides for the regulator to suspend or remove an officer during an inquiry in cases where it has reasonable grounds to believe that the affairs of the registered provider have been mismanaged and the interests of tenants or the provider’s assets require protection or, if as a result of an interim report during the inquiry, it is satisfied that the affairs of the provider have been mismanaged.

78. Schedule JBCRL8SCH, paragraph 12(c) adds a third case for removing or suspending an officer, employee or agent of a provider during an inquiry, allowing removal or suspension if the regulator is satisfied that the officer, employee or agent has either obstructed or failed to co-operate with the inquiry.

79. Section 260 provides for the regulator by order to remove or suspend an officer, agent or employee of a registered provider following an inquiry in which mismanagement has been identified. Paragraph 13 of the Schedule extends the grounds to include obstruction or failure to co-operate with the inquiry as grounds for removing an officer, agent or employee.

80. Section 266 lists grounds under which the regulator can remove an officer of a registered provider. Paragraph 14 of the Schedule adds a further case to this list where a person is obstructing or failing to co-operate with the regulator in the performance of its regulatory functions.

81. These changes enable the regulator to act where it encounters unreasonable resistance from a registered provider’s officers.