Guidance Note 21: Financial Assistance
This note applies from 1 April 2024
Applies to England
Guidance Note 21: Section 95(3) of the Housing and Regeneration Act 2008 (as amended) (‘the Act’) – Financial Assistance
| Target | Applicable |
|---|---|
| PRP (For Profit) | ✔ |
| PRP (Not For Profit) | ✔ |
| PRP (Registered Charity) | ✔ |
| Local Authority | X |
Type of power: General power
Scope
1 - The regulator has the power in to give financial assistance to a private registered provider, either in the form of a loan, guarantee or indemnity.
When the regulator will use this power
2 - Section 95(3) of the Act provides that:
a) The regulator may, where it thinks it advances a fundamental objective (as set out at section 92K of the Act), give financial assistance to a private registered provider by:
i) lending money to or in respect of the private registered provider; or
ii) giving a guarantee or indemnity in respect of the private registered provider.
3 - The regulator must obtain consent in order to exercise this power. As a result, this power will only be used in exceptional circumstances including but not limited to:
a) where tenants are in danger of losing their homes or their health and safety is at risk; or
b) where temporary support is required to protect existing public investment while a rescue plan is being developed and no other avenues exist to provide financial support.
Process for using the power
4 - If the regulator thinks that financial assistance will advance the fundamental objectives, it will engage with the private registered provider and consider the following factors, which are not exhaustive:
- the type of financial assistance to be offered;
- the amount of financial assistance which will be required; and
- whether any conditions should be imposed in connection with the assistance being granted. This could include provision for repayment, and whether interest should be charged.
5 - Where the regulator considers financial assistance should be offered, it will liaise with the Secretary of State as to the factors mentioned above and reach an agreement as to the terms of the financial assistance. Any financial assistance given under 95(3) requires the consent of the Secretary of State.
6 - The private registered provider will be required to enter into a contractually binding agreement with the regulator to reflect the terms upon which financial assistance is given.