Chapter 6: Private registered providers and contracting out

Guidance on working with private registered providers and the contracting out by local authorities of their allocation functions.

Working with private registered providers

6.1 Private registered providers have a duty under section 170 to cooperate with housing authorities – where the authority requests it – to such extent as is reasonable in the circumstances in offering accommodation to people with priority under the authority’s allocation scheme. Similarly, section 213 provides that, where a private registered provider has been requested by a housing authority to assist them in the discharge of their homelessness functions under Part 7, it must cooperate to the same extent.

6.2 Housing authorities must comply with the requirements of Part 6 when they nominate an applicant to be the tenant of a private registered provider. A housing authority nominates for these purposes when it does so ’in pursuance of any arrangements (whether legally enforceable or not) to require that housing accommodation, or a specified amount of housing accommodation, is made available to a person or one of a number of persons nominated by the authority’ (section 159(4)).

6.3 Nomination agreements should set out the proportion of lettings that will be made available; any criteria which the private registered provider has adopted for accepting or rejecting nominees; and how any disputes will be resolved. Housing authorities will want to put in place arrangements to monitor effective delivery of the nomination agreement so they can demonstrate they are meeting their obligations under Part 6.

6.4 The Secretary of State expects that Affordable Rent homes will be allocated in the same way as social rent properties and that existing lettings arrangements operated by housing authorities and private registered providers will continue to apply. The statutory and regulatory framework for allocations provides scope for local flexibility, and authorities and private registered providers may wish to exercise this discretion in relation to Affordable Rent in order to meet local needs and priorities effectively.

Contracting out

6.5 The Local Authorities (Contracting Out of Allocation of Housing and Homelessness Functions) Order 1996 – made under section 70 of the Deregulation and Contracting Out Act 1994 (‘the 1994 Act’) – enables housing authorities to contract out certain functions under Part 6. In essence, it allows the contracting out of administrative functions, leaving the responsibility for strategic decisions with the housing authority.

6.6 Schedule 1 to the Order lists allocation functions which may not be contracted out:

  • adopting or altering the allocation scheme, including the principles on which the scheme is framed, and consulting private registered providers
  • making the allocation scheme available at the authority’s principal office

  1. 6.7 The Order therefore provides that the majority of functions under Part 6 may be contracted out. These include:

    1. (i) making enquiries about and deciding a person’s eligibility for an allocation
    2. (ii) carrying out reviews of decisions
    3. (iii) securing that advice and information is available free of charge on how to apply for housing
    4. (iv) securing that assistance is available free of charge to people likely to have difficulty in making a housing application without such assistance, and
    5. (v) making individual allocations in accordance with the allocation scheme

  1. 6.8 The 1994 Act provides that a contract:

    1. (i) may authorise a contractor to carry out only part of the function concerned
    2. (ii) may specify that the contractor is authorised to carry out functions only in certain cases or areas specified in the contract
    3. (iii) may include conditions relating to the carrying out of the functions, for example prescribing standards of performance
    4. (iv) shall be for a period not exceeding 10 years and may be revoked at any time by the Minister or the housing authority. Any subsisting contract is to be treated as having been repudiated in these circumstances
    5. (v) shall not prevent the authority from exercising the functions to which the contract relates

6.9 The 1994 Act also provides that the authority is responsible for any act or omission of the contractor in exercising functions under the contract, except where:

  • the contractor fails to fulfil conditions specified in the contract relating to the exercise of the function
  • criminal proceedings are brought in respect of the contractor’s act or omission

6.10 Where a housing authority has delegated or contracted out the operation of its allocation functions to an external contractor, the contractor must be made aware of the provisions of Part 6 and advised how the legislation and this guidance apply to them.

6.11 Where there is an arrangement in force under section 101 of the Local Government Act 1972 by virtue of which one authority exercises the functions of another, the 1994 Act provides that the authority exercising the function is not allowed to contract it out without the principal authority’s consent.