Office of Public Sector Information

(2) For subsection (5) of that section there shall be substituted the following subsection—

“(5) The Secretary of State’s approval may be given—

(a) either generally to all local housing authorities or to a particular authority or description of authority, and

(b) either in relation to a particular case or in relation to a particular description of case,

and may be given unconditionally or subject to conditions.”

(3) For subsection (6) of that section there shall be substituted the following subsections—

“(6) References in this section to the management functions of a local housing authority in relation to houses or land—

(a) do not include such functions as may be prescribed by regulations made by the Secretary of State, but

(b) subject to that, include functions conferred by any statutory provision and the powers and duties of the authority as holder of an estate or interest in the houses or land in question.

(7) Regulations under this section—

(a) may make different provision with respect to different cases or descriptions of case, including different provision for different areas,

(b) may contain such incidental, supplementary or transitional provisions as appear to the Secretary of State to be necessary or expedient, and

(c) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.”

130 Consultation with respect to management agreements

For section 27A of the 1985 Act there shall be substituted the following section—

“27A Consultation with respect to management agreements

(1) A local housing authority who propose to enter into a management agreement shall make such arrangements as they consider appropriate to enable the tenants of the houses to which the proposal relates—

(a) to be informed of the following details of the proposal, namely—

(i) the terms of the agreement (including in particular the standards of service to be required under the agreement),

(ii) the identity of the person who is to be manager under the agreement, and

(iii) such other details (if any) as may be prescribed by regulations made by the Secretary of State, and

(b) to make known to the authority within a specified period their views as to the proposal;

and the authority shall, before making any decision with respect to the proposal, consider any representations made to them in accordance with those arrangements.

(2) A local housing authority who have made a management agreement shall—

(a) during the continuance of the agreement, maintain such arrangements as they consider appropriate to enable the tenants of the houses to which the agreement relates to make known to the authority their views as to the standards of service for the time being achieved by the manager, and

(b) before making any decision with respect to the enforcement of the standards of service required by the agreement, consider any representations made to them in accordance with those arrangements.

(3) Arrangements made or maintained under subsection (1) or (2) above shall—

(a) include provision for securing that the authority’s responses to any representations made to them in accordance with the arrangements are made known to the tenants concerned, and

(b) comply with such requirements as may be prescribed by regulations made by the Secretary of State.

(4) Regulations under this section—

(a) may make different provision with respect to different cases or descriptions of case, including different provision for different areas,

(b) may contain such incidental, supplementary or transitional provisions as appear to the Secretary of State to be necessary or expedient, and

(c) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5) In the case of secure tenants the provisions of this section apply in place of the provisions of section 105 (consultation on matters of housing management) in relation to the making of a management agreement.”

131 Management agreements and compulsory competitive tendering

After section 27A of the 1985 Act there shall be inserted the following section—

“27AA Management agreements and compulsory competitive tendering

(1) This section shall apply if the Secretary of State makes an order under section 2(3) of the [1988 c. 9.] Local Government Act 1988 (“the 1988 Act”) providing for the exercise of any management functions to be a defined activity for the purposes of Part I of that Act (compulsory competitive tendering).

(2) The Secretary of State may by regulations provide that in any case where—

(a) a local housing authority propose to make an invitation to carry out any functional work in accordance with the rules set out in subsection (4) of section 7 of the 1988 Act (functional work: conditions), and

(b) the proposal is such that any decision by the authority that the work should be carried out by the person or one of the persons proposed to be invited would necessarily involve their entering into a management agreement with that person,

the provisions of section 27A shall have effect with such modifications as appear to the Secretary of State to be necessary or expedient.

(3) Nothing in section 6 of the 1988 Act (functional work: restrictions) shall apply in relation to any functional work which, in pursuance of a management agreement, is carried out by the manager as agent of the local housing authority.

(4) In this section “functional work” has the same meaning as in Part I of the 1988 Act.

(5) Regulations under this section shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.”

132 Management agreements with tenant management organisations

(1) After section 27AA of the 1985 Act there shall be inserted the following section—

“27AB Management agreements with tenant management organisations

(1) The Secretary of State may make regulations for imposing requirements on a local housing authority in any case where a tenant management organisation serves written notice on the authority proposing that the authority should enter into a management agreement with that organisation.

(2) The regulations may make provision requiring the authority—

(a) to provide or finance the provision of such office accommodation and facilities, and such training, as the organisation reasonably requires for the purpose of pursuing the proposal;

(b) to arrange for such feasibility studies with respect to the proposal as may be determined by or under the regulations to be conducted by such persons as may be so determined;

(c) to arrange for such ballots or polls with respect to the proposal as may be determined by or under the regulations to be conducted of such persons as may be so determined; and

(d) in such circumstances as may be prescribed by the regulations (which shall include the organisation becoming registered if it has not already done so), to enter into a management agreement with the organisation.

(3) The regulations may make provision with respect to any management agreement which is to be entered into in pursuance of the regulations—

(a) for determining the houses and land to which the agreement should relate, and the amounts which should be paid under the agreement to the organisation;

(b) requiring the agreement to be in such form as may be approved by the Secretary of State and to contain such provisions as may be prescribed by the regulations;

(c) requiring the agreement to take effect immediately after the expiry or other determination of any previous agreement; and

(d) where any previous agreement contains provisions for its determination by the authority, requiring the authority to determine it as soon as may be after the agreement is entered into.

(4) The regulations may also make such procedural, incidental, supplementary and transitional provisions as may appear to the Secretary of State necessary or expedient, and may in particular make provision—

(a) for particular questions arising under the regulations to be determined by the authority;

(b) for other questions so arising to be determined by an arbitrator agreed to by the parties or, in default of agreement, appointed by the Secretary of State;

(c) requiring any person exercising functions under the regulations to act in accordance with any guidance given by the Secretary of State; and

(d) for enabling the authority, if invited to do so by the organisation concerned, to nominate one or more persons to be directors or other officers of any tenant management organisation with whom the authority have entered into, or propose to enter into, a management agreement.

(5) Nothing in subsections (2) to (4) above shall be taken as prejudicing the generality of subsection (1).

(6) Regulations under this section—

(a) may make different provision with respect to different cases or descriptions of case, including different provision for different areas, and

(b) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(7) Except as otherwise provided by regulations under this section—

(a) a local housing authority shall not enter into a management agreement with a tenant management organisation otherwise than in pursuance of the regulations; and

(b) the provisions of the regulations shall apply in relation to the entering into of such an agreement with such an organisation in place of—

(i) the provisions of section 27A (consultation with respect to management agreements),

(ii) in the case of secure tenants, the provisions of section 105 (consultation on matters of housing management), and

(iii) in the case of an organisation which is associated with the authority, the provisions of section 33 of the Local Government Act 1988 (restrictions on contracts with local authority companies).

(8) In this section—

• “arbitrator” means a member of a panel approved for the purposes of the regulations by the Secretary of State;

• “associated” shall be construed in accordance with section 33 of the Local Government Act 1988;

• “previous agreement”, in relation to an agreement entered into in pursuance of the regulations, means a management agreement previously entered into in relation to the same houses and land;

• “registered” means registered under the Industrial and Provident Societies Act 1965 or the Companies Act 1985;

• “tenant management organisation” means a body which satisfies such conditions as may be determined by or under the regulations.”

(2) Section 27C of the 1985 Act (which is superseded by this section) shall cease to have effect.

Priority of charges securing repayment of discount

133 Voluntary disposals by local authorities

(1) For subsection (2) of section 36 of the 1985 Act (liability to repay discount is a charge on the premises) there shall be substituted the following subsections—

“(2) Subject to subsections (2A) and (2B), the charge has priority immediately after any legal charge securing an amount—

(a) left outstanding by the purchaser, or

(b) advanced to him by an approved lending institution for the purpose of enabling him to acquire the interest disposed of on the first disposal.

(2A) The following, namely—

(a) any advance which is made otherwise than for the purpose mentioned in subsection (2)(b) and is secured by a legal charge having priority to the charge taking effect by virtue of this section, and

(b) any further advance which is so secured,

shall rank in priority to that charge if, and only if, the local authority by written notice served on the institution concerned gives their consent; and the local authority shall so give their consent if the purpose of the advance or further advance is an approved purpose.

(2B) The local authority may at any time by written notice served on an approved lending institution postpone the charge taking effect by virtue of this section to any advance or further advance which—

(a) is made to the purchaser by that institution, and

(b) is secured by a legal charge not having priority to that charge;

and the local authority shall serve such a notice if the purpose of the advance or further advance is an approved purpose.”

(2) After subsection (4) of that section there shall be inserted the following subsections—

“(5) The approved purposes for the purposes of this section are—

(a) to enable the purchaser to defray, or to defray on his behalf, any of the following—

(i) the cost of any works to the house,

(ii) any service charge payable in respect of the house for works, whether or not to the house, and

(iii) any service charge or other amount payable in respect of the house for insurance, whether or not of the house, and

(b) to enable the purchaser to discharge, or to discharge on his behalf, any of the following—

(i) so much as is still outstanding of any advance or further advance which ranks in priority to the charge taking effect by virtue of this section,

(ii) any arrears of interest on such an advance or further advance, and

(iii) any costs and expenses incurred in enforcing payment of any such interest, or repayment (in whole or in part) of any such advance or further advance.

(6) Where different parts of an advance or further advance are made for different purposes, each of those parts shall be regarded as a separate advance or further advance for the purposes of this section.”

134 Voluntary disposals by housing associations

(1) For sub-paragraph (2) of paragraph 2 of Schedule 2 to the [1985 c. 69.] Housing Associations Act 1985 (liability to repay discount is a charge on the premises) there shall be substituted the following sub-paragraphs—

“(2) Subject to sub-paragraphs (2A) and (2B), the charge has priority immediately after any legal charge securing an amount—

(a) left outstanding by the purchaser, or

(b) advanced to him by an approved lending institution for the purpose of enabling him to acquire the interest disposed of on the first disposal.

(2A) The following, namely—

(a) any advance which is made otherwise than for the purpose mentioned in sub-paragraph (2)(b) and is secured by a legal charge having priority to the charge taking effect by virtue of this paragraph, and

(b) any further advance which is so secured,

shall rank in priority to that charge if, and only if, the housing association by written notice served on the institution concerned gives its consent; and the housing association shall so give its consent if the purpose of the advance or further advance is an approved purpose.

(2B) The housing association may at any time by written notice served on an approved lending institution postpone the charge taking effect by virtue of this paragraph to any advance or further advance which—

(a) is made to the purchaser by that institution, and

(b) is secured by a legal charge not having priority to that charge;

and the housing association shall serve such a notice if the purpose of the advance or further advance is an approved purpose.”

(2) After sub-paragraph (4) of that paragraph there shall be inserted the following sub-paragraphs—

“(5) The approved purposes for the purposes of this paragraph are—

(a) to enable the purchaser to defray, or to defray on his behalf, any of the following—

(i) the cost of any works to the house,

(ii) any service charge payable in respect of the house for works, whether or not to the house, and

(iii) any service charge or other amount payable in respect of the house for insurance, whether or not of the house, and

(b) to enable the purchaser to discharge, or to discharge on his behalf, any of the following—

(i) so much as is still outstanding of any advance or further advance which ranks in priority to the charge taking effect by virtue of this paragraph,

(ii) any arrears of interest on such an advance or further advance, and

(iii) any costs and expenses incurred in enforcing payment of any such interest, or repayment (in whole or in part) of any such advance or further advance;

and in this sub-paragraph “service charge” has the meaning given by section 621A of the [1985 c. 68.] Housing Act 1985.

(6) Where different parts of an advance or further advance are made for different purposes, each of those parts shall be regarded as a separate advance or further advance for the purposes of this paragraph.”

Disposals of dwelling-houses by local authorities

135 Programmes for disposals

(1) For the purposes of this section a disposal of one or more dwelling-houses by a local authority to any person (in this section referred to as a “disposal”) is a qualifying disposal if—

(a) it requires the consent of the Secretary of State under section 32 of the 1985 Act (power to dispose of land held for the purposes of Part II), or section 43 of that Act (consent required for certain disposals not within section 32); and

(b) the aggregate of the following, namely—

(i) the number of dwelling-houses included in the disposal; and

(ii) the number of dwelling-houses which, within the relevant period, have been previously disposed of by the authority to that person, or that person and any associates of his taken together,

exceeds 499 or, if the Secretary of State by order so provides, such other number as may be specified in the order.

(2) In subsection (1) “the relevant period” means—

(a) the period of five years ending with the date of the disposal or, if that period begins before the commencement of this section, so much of it as falls after that commencement; or

(b) if the Secretary of State by order so provides, such other period ending with that date and beginning after that commencement as may be specified in the order.

(3) A local authority shall not make a qualifying disposal in any financial year unless the Secretary of State has included the disposal in a disposals programme prepared by him for that year.

(4) A disposal may be included in a disposals programme for a financial year either—

(a) by specifically including the disposal in the programme; or

(b) by including in the programme a description of disposal which includes the disposal.

(5) An application by a local authority for the inclusion of a disposal in a disposals programme for a financial year—

(a) shall be made in such manner and contain such information; and

(b) shall be made before such date,

as the Secretary of State may from time to time direct.

(6) In preparing a disposals programme for any financial year, the Secretary of State shall secure that the aggregate amount of his estimate of the exchequer costs of each of the disposals included in the programme does not exceed such amount as he may, with the approval of the Treasury, determine.

(7) In deciding whether to include a disposal in a disposals programme for a financial year or, having regard to subsection (6), which disposals to include in such a programme, the Secretary of State may, in relation to the disposal or (as the case may be) each disposal, have regard in particular to—

(a) his estimate of the exchequer costs of the disposal;

(b) whether or not a majority of the secure tenants who would be affected by the disposal are (in his opinion) likely to oppose it; and

(c) the matters mentioned in section 34(4A) or 43(4A) (as the case may be) of the 1985 Act;

and in this subsection “secure tenant” has the same meaning as in Part IV of that Act.

(8) In subsections (6) and (7) “the exchequer costs”, in relation to a disposal, means any increase which is or may be attributable to the disposal in the aggregate of any subsidies payable under—

(a) section 135(1) of the [1992 c. 5.] Social Security Administration Act 1992 (housing benefit finance); or

(b) section 79 of the 1989 Act (Housing Revenue Account subsidy);

and the Secretary of State’s estimate of any such increase shall be based on such assumptions (including assumptions as to the period during which such subsidies may be payable) as he may, with the approval of the Treasury, from time to time determine, regardless of whether those assumptions are or are likely to be borne out by events.

(9) The inclusion of a disposal in a disposals programme for a financial year shall not prejudice the operation of section 32 or 43 of the 1985 Act in relation to the disposal.

(10) The Secretary of State may prepare different disposals programmes under this section for different descriptions of authority; and any disposals programme may be varied or revoked by a subsequent programme.

(11) An order under this section—

(a) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament;

(b) may make different provision for different cases or descriptions of case, or for different authorities or descriptions of authority; and

(c) may contain such transitional and supplementary provisions as the Secretary of State considers necessary or expedient.

(12) Any direction or determination under this section—

(a) may make different provision for different cases or descriptions of case, or for different authorities or descriptions of authority; and

(b) may be varied or revoked by a subsequent direction or determination.

(13) In this section—

• “the 1989 Act” means the [1989 c. 42.] Local Government and Housing Act 1989;

• “dwelling-house” has the same meaning as in Part V of the 1985 Act except that it does not include a hostel (as defined in section 622 of that Act) or any part of a hostel;

• “local authority” has the meaning given by section 4 of that Act;

• “long lease” means a lease for a term of years certain exceeding 21 years other than a lease which is terminable before the end of that term by notice given by or to the landlord;

• “subsidiary” has the same meaning as in section 28(8) of the [1985 c. 69.] Housing Associations Act 1985.

(14) For the purposes of this section—

(a) a disposal of any dwelling-house shall be disregarded if at the time of the disposal the local authority’s interest in the dwelling-house is or was subject to a long lease;

(b) two persons are associates of each other if—

(i) one of them is a subsidiary of the other;

(ii) they are both subsidiaries of some other person; or

(iii) there exists between them such relationship or other connection as may be specified in a determination made by the Secretary of State; and

(c) a description of authority may be framed by reference to any circumstances whatever.

136 Levy on disposals

(1) For the purposes of this section a disposal of one or more dwelling-houses by a local authority to any person is a qualifying disposal if—

(a) it requires the consent of the Secretary of State under section 32 of the 1985 Act (power to dispose of land held for the purposes of Part II), or section 43 of that Act (consent required for certain disposals not within section 32); and

(b) the aggregate of the following, namely—

(i) the number of dwelling-houses included in the disposal; and

(ii) the number of dwelling-houses which, within any relevant period, have been previously or are subsequently disposed of by the authority to that person, or that person and any associates of his taken together,

exceeds 499 or, if the Secretary of State by order so provides, such other number as may be specified in the order.

(2) In subsection (1) “relevant period” means—

(a) any period of five years beginning after the commencement of this section and including the date of the disposal; or

(b) if the Secretary of State by order so provides, any such other period beginning after that commencement and including that date as may be specified in the order.

(3) A local authority which after the commencement of this section makes a disposal which is or includes, or which subsequently becomes or includes, a qualifying disposal shall be liable to pay to the Secretary of State a levy of an amount calculated in accordance with the formula—

(4) A formula determined for the purposes of item D in subsection (3) may include any variable which is included in a determination made for the purposes of section 80 of the 1989 Act (calculation of Housing Revenue Account subsidy).

(5) The administrative arrangements for the payment of any levy under this section shall be such as may be specified in a determination made by the Secretary of State, and such a determination may in particular make provision as to—

(a) the information to be supplied by authorities;

(b) the form and manner in which, and the time within which, the information is to be supplied;

(c) the payment of the levy in stages in such circumstances as may be provided in the determination;

(d) the date on which payment of the levy (or any stage payment of the levy) is to be made;

(e) the adjustment of any levy which has been paid in such circumstances as may be provided in the determination;

(f) the payment of interest in such circumstances as may be provided in the determination; and

(g) the rate or rates (whether fixed or variable, and whether or not calculated by reference to some other rate) at which such interest is to be payable;

and any such administrative arrangements shall be binding on local authorities.

(6) Any amounts by way of levy or interest which are not paid to the Secretary of State as required by the arrangements mentioned in subsection (5) shall be recoverable in a court of competent jurisdiction.

(7) For the purposes of Part IV of the 1989 Act (revenue accounts and capital finance of local authorities) any payment of levy by a local authority under this section shall be treated as expenditure for capital purposes.

(8) Notwithstanding the provisions of section 64 of the 1989 Act (use of amounts set aside to meet credit liabilities) but subject to subsection (9), amounts for the time being set aside by a local authority (whether voluntarily or pursuant to a requirement under Part IV of that Act) as provision to meet credit liabilities may be applied to meet any liability of the authority in respect of any levy payable under this section, other than a liability in respect of interest.

(9) The Secretary of State may by regulations provide that the amounts which may by virtue of subsection (8) be applied as mentioned in that subsection shall not exceed so much of the levy concerned as may be determined in accordance with the regulations.

(10) Any sums received by the Secretary of State under this section shall be paid into the Consolidated Fund; and any sums paid by the Secretary of State by way of adjustment of levies paid under this section shall be paid out of money provided by Parliament.

(11) Before making an order or determination under this section, the Secretary of State shall consult such representatives of local government as appear to him to be appropriate.

(12) An order or regulations under this section—

(a) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament;

(b) may make different provision for different cases or descriptions of case, or for different authorities or descriptions of authority; and

(c) may contain such transitional and supplementary provisions as the Secretary of State considers necessary or expedient.

(13) Any determination under this section—

(a) may make different provision for different cases or descriptions of case, or for different authorities or descriptions of authority; and

(b) may be varied or revoked by a subsequent determination.

(14) Subsections (13) and (14) of section 135 shall apply for the purposes of this section as they apply for the purposes of that section.

137 Disposals: transitional provisions

(1) The period beginning with the commencement of section 135 and ending with 31st March 1994 (in this section referred to as “the first financial year”) shall be treated as a financial year for the purposes of that section; but in relation to that period subsection (5) of that section shall not apply.

(2) If before the commencement of section 135 any statement was made by or on behalf of the Secretary of State—

(a) that, if that section were then in force, he would prepare under that section such disposals programmes for the first financial year as are set out in the statement, and

(b) that, when that section comes into force, he is to be regarded as having prepared under that section the programmes so set out,

those programmes shall have effect as if they had been validly made under that section at the time of the statement.