PART 2 continued CHAPTER 3 continued
(1) The Secretary of State may by order—
(a) repeal section 113, or
(b) amend it so as to permit the registration of specified classes of local authority.
(2) The Secretary of State may by order require the regulator to register—
(a) a specified local authority, or
(b) a specified class of local authority.
(3) Registration under subsection (2)—
(a) takes effect in accordance with any provision of the order about timing or other procedural or incidental matters,
(b) does not require an application for registration, and
(c) may apply to a local authority whether or not it is eligible for registration by virtue of subsection (1).
(4) If the Secretary of State thinks it necessary or desirable in connection with the registration of local authorities, the Secretary of State may by order—
(a) provide for a provision of this Part or any other enactment not to apply in relation to registered local authorities;
(b) provide for a provision of this Part or any other enactment to apply with specified modifications in relation to registered local authorities;
(c) amend a provision of this Part or any other enactment.
(5) In this section—
(a) “local authority” means an authority or person to whom section 113 applies or has applied, and
(b) “registered local authorities” means authorities or persons who are registered, registrable or to be registered as a result of an order under subsection (1) or (2) above.
(6) Before making an order under this section the Secretary of State shall consult—
(a) any authority or person likely to be affected by it, and
(b) such other persons as the Secretary of State thinks fit.
(1) Each entry in the register shall designate the body registered as either—
(a) a non-profit organisation, or
(b) a profit-making organisation.
(2) A body is a non-profit organisation if it is a registered or non-registrable charity.
(3) A body is also a non-profit organisation if it satisfies the following conditions.
(4) Condition 1 is that the body—
(a) does not trade for profit, or
(b) is prohibited by its constitution from issuing capital with interest or dividend at a rate exceeding that prescribed under section 1(1)(b) of the Housing Associations Act 1985 (c. 69).
(5) Condition 2 is that a purpose of the body is the provision or management of housing.
(6) Condition 3 is that any other purposes of the body are connected with or incidental to the provision of housing.
(7) The Secretary of State may make regulations providing that a specified purpose is to be, or not to be, treated as connected with or incidental to the provision of housing.
(8) A body which is not a non-profit organisation under subsection (2) or (3) is a profit-making organisation.
(9) If the regulator thinks that what was a profit-making organisation has become a non-profit organisation, the regulator must change the registered designation accordingly.
(1) The regulator shall register anyone who—
(a) is eligible for registration, and
(b) applies to be registered.
(2) The regulator may make provision about—
(a) the form of an application;
(b) the information to be contained in it or provided with it;
(c) the manner in which an application is to submitted;
(d) the consequences of failure to comply with provision under paragraphs (a) to (c).
(3) This section is subject to section 117 (fees).
(4) Once entered a body remains registered unless and until removed under section 118 or 119.
(5) It shall be presumed for all purposes that a person entered in the register is eligible for registration while the registration lasts (irrespective of whether and why the person is later removed from the register).
(1) The regulator may make initial registration conditional upon payment of a fee.
(2) The regulator may make continued registration conditional upon payment of an annual fee.
(3) The regulator shall—
(a) prescribe the amount of a fee, and
(b) make provision about the periods during which and in respect of which annual fees are payable.
(4) The regulator may set different fees, and make different provision, for different cases or circumstances.
(5) Fees must be set in accordance with principles which the regulator prepares and publishes and which are designed to ensure that so far as is reasonably practicable—
(a) fee income matches expenditure on the performance of functions,
(b) each fee is reasonable and proportionate to the costs to which it relates, and
(c) actual or potential registered providers can see the relationship between the amount of a fee and the costs to which it relates.
(6) The principles—
(a) shall provide for section 95(3) to be disregarded for the purpose of subsection (5)(a), and
(b) may provide for specified expenditure or potential expenditure under section 95 or otherwise to be disregarded for the purpose of subsection (5)(a).
(7) Principles do not have effect until approved by the Secretary of State.
(8) In preparing (or revising) the principles the regulator shall consult persons appearing to the regulator to represent the interests of fee-payers.
(9) The regulator’s accounts shall show—
(a) fees received, and
(b) fees outstanding.
(1) The regulator may remove from the register a body which the regulator thinks—
(a) is no longer eligible for registration,
(b) has ceased to carry out activities, or
(c) has ceased to exist.
(2) Before removing a body under subsection (1)(a) or (b) the regulator must—
(a) take all reasonable steps to give the body at least 14 days' notice, and
(b) consider any representations it makes in that period.
(3) After removing a body under subsection (1)(a) or (b) the regulator must take all reasonable steps to notify the body.
(1) A registered provider may ask the regulator to remove it from the register.
(2) The regulator may comply with a request—
(a) on the grounds that the registered provider no longer is or intends to be a provider of social housing in England,
(b) on the grounds that the registered provider is subject to regulation by another authority whose control is likely to be sufficient, or
(c) on the grounds that the registered provider meets any relevant criteria for de-registration set by the regulator.
(3) Before deciding whether or not to comply, the regulator must consult such local authorities in whose area the registered provider acts as it thinks appropriate.
(4) The regulator shall not comply with a request by a non-profit registered provider if it thinks that removal is sought with a view to enabling the registered provider to distribute assets to members.
(5) In deciding whether or not to comply, the regulator must (in particular) have regard to—
(a) any conditions imposed in connection with disposal consents given to the registered provider under Chapter 5, and
(b) any conditions imposed in connection with financial assistance given to the registered provider under any enactment.
(6) Having decided whether or not to remove the registered provider the regulator must notify—
(a) the provider, and
(b) any authority consulted.
(7) The regulator shall publish criteria set for the purposes of subsection (2)(c).
(1) As soon as is reasonably practicable after registering or de-registering a body the regulator shall notify—
(a) in the case of a registered charity, the Charity Commission,
(b) in the case of an industrial and provident society, the Financial Services Authority, and
(c) in the case of a registered company (whether or not also a registered charity), the registrar of companies for England and Wales.
(2) A notice of registration shall specify whether the person registered is designated as a non-profit or profit-making organisation.
(3) If the designation changes, the regulator shall notify any person notified of the registration.
(4) A person to whom notice is given under this section must keep a record of it.
(1) A body may appeal to the High Court against a decision of the regulator—
(a) to refuse to register it,
(b) to de-register it, or
(c) to refuse to de-register it.
(2) The regulator shall not de-register a body while an appeal is pending.
(3) The Secretary of State may by order provide for the First-tier Tribunal to have jurisdiction under this section instead of the High Court.
(1) This section restricts the making of gifts, and the payment of dividends and bonuses, by a non-profit registered provider to—
(a) a member or former member of the registered provider,
(b) a member of the family of a member or former member,
(c) a company which has as a director a person within paragraph (a) or (b).
(2) A gift may be made, and a dividend or bonus may be paid, only if it falls within one of the following permitted classes.
(3) Class 1 is payments which—
(a) are in accordance with the constitution of the registered provider, and
(b) are due as interest on capital lent to the provider or subscribed in its shares.
(4) Class 2 is payments which—
(a) are paid by a fully mutual housing association (within the meaning of section 1(2) of the Housing Associations Act 1985 (c. 69)),
(b) are paid to former members of the association, and
(c) are due under—
(i) tenancy agreements with the association, or
(ii) agreements under which the former members became members of the association.
(5) Class 3 is payments which—
(a) are in accordance with the constitution of the registered provider making the payment (“the payer”), and
(b) are made to a registered provider which is a subsidiary or associate of the payer.
(6) If a registered company or industrial and provident society contravenes this section—
(a) it may recover the wrongful gift or payment as a debt from the recipient, and
(b) the regulator may require it to take action to recover the gift or payment.
Chapter 5 makes provision about disposal of property.
(1) In section 51 of, and Schedule 2 to, the Housing Act 1996 (c. 52) (schemes for investigation of complaints by housing ombudsmen) for “Relevant Authority”, wherever appearing, substitute “Regulator of Social Housing”.
(2) In section 51 of that Act—
(a) for subsection (2)(a) substitute—
“(a) a registered provider of social housing,”,
(b) in subsection (2)(d) after “registered with” insert “the Regulator of Social Housing or”, and
(c) at the end add—
“(7) Section 52 shall apply to an order under subsection (4) (with any necessary modifications).”
(3) In paragraph 6(2) of Schedule 2 to that Act (grants) for “Housing Corporation”, in both places, substitute “Regulator of Social Housing”.
(4) In paragraph 11(4) of Schedule 2 to that Act, omit—
(a) “or the Housing Corporation”, and
(b) “or, as the case may be, the Housing Corporation”.
(5) At the end of Schedule 2 to that Act add—
12 Section 52 shall apply to an order of the Secretary of State under this Schedule (with any necessary modifications).”
(1) A registered provider may give the regulator an undertaking in respect of any matter concerning social housing.
(2) The regulator may prescribe a procedure to be followed in giving an undertaking.
(3) In exercising a power under Chapter 6 or 7 the regulator must have regard to any undertaking offered or given.
(4) The regulator may found a decision about whether to exercise a power under Chapter 6 or 7 wholly or partly on the extent to which an undertaking has been honoured.
If invited by a local authority to participate in the preparation or modification of a sustainable community strategy under section 4 of the Local Government Act 2000 (c. 22), a registered provider must co-operate with the local authority.
(1) The regulator may give directions to registered providers about the preparation of their accounts.
(2) A direction may be given to a profit-making registered provider only in so far as its accounts relate to social housing activities.
(3) The power must be exercised with a view to ensuring that accounts—
(a) are prepared in proper form, and
(b) present a true and fair view of—
(i) the state of affairs of each registered provider in relation to its social housing activities, and
(ii) the disposition of funds and assets which are, or have been, in its hands in connection with those activities.
(4) A direction may require a registered charity to use a specified method for distinguishing in its accounts between—
(a) matters relating to its social housing activities, and
(b) other matters.
(5) A direction—
(a) may make provision that applies generally or only to specified cases, circumstances or registered providers, and
(b) may make different provision for different cases, circumstances or registered providers.
(6) A direction that relates to more than one registered provider may be given only after consulting one or more bodies appearing to the regulator to represent the interests of registered providers.
(7) The regulator shall make arrangements for bringing a direction to the attention of every registered provider to which it applies.
(1) Each registered provider shall send a copy of its accounts to the regulator within the period of 6 months beginning with the end of the period to which the accounts relate.
(2) The accounts must be accompanied by—
(a) an auditor’s report, or
(b) in the case of accounts that by virtue of an enactment are not subject to audit, any report that is required to be prepared in respect of the accounts by virtue of an enactment.
(3) The report must specify whether the accounts comply with any relevant directions under section 127.
(1) This section applies in relation to a registered provider which—
(a) is a registered company other than a charity, and
(b) is exempt from the audit requirements of the Companies Act 2006 (c. 46) by virtue of section 477 of that Act (small companies' exemption).
(2) The directors of the company shall cause a report to be prepared in accordance with section 130 and made to the company’s members in respect of the company’s individual accounts for any year in which the company takes advantage of its exemption from audit.
(3) “Individual accounts” has the same meaning as in section 396 of the Companies Act 2006.
(1) The report required by section 129 must be prepared by a person (“the reporting accountant”) who is eligible under section 131.
(2) The report must state whether the individual accounts are in accordance with the company’s accounting records kept under section 386 of the Companies Act 2006.
(3) On the basis of the information contained in the accounting records the report must also state whether—
(a) the accounts comply with Part 15 of the Companies Act 2006;
(b) the company is entitled to exemption from audit under section 477 of that Act (small companies' exemption) for the year in question.
(4) The report must give the name of the reporting accountant and be signed and dated.
(5) The report must be signed—
(a) where the reporting accountant is an individual, by that individual, and
(b) where the reporting accountant is a firm, for and on behalf of the firm by an individual authorised to do so.
(6) In this section and sections 131 and 132 “firm” has the meaning given by section 1173(1) of the Companies Act 2006.
(1) A person is eligible for appointment by a company as a reporting accountant under section 130 if—
(a) either of the following conditions is satisfied, and
(b) the person would not be prohibited from acting as auditor of the company by virtue of section 1214 of the Companies Act 2006 (c. 46).
(2) Condition 1 is satisfied if the person is a member of a body listed in subsection (4) and under its rules—
(a) the person is entitled to engage in public practice, and
(b) is not ineligible for appointment as a reporting accountant.
(3) Condition 2 is satisfied if the person—
(a) is subject to the rules of a body listed in subsection (4) in seeking appointment or acting as a statutory auditor under Part 42 of the Companies Act 2006, and
(b) under those rules, is eligible for appointment as a statutory auditor under that Part.
(4) The bodies mentioned in subsections (2) and (3) are—
(a) the Institute of Chartered Accountants in England and Wales,
(b) the Institute of Chartered Accountants of Scotland,
(c) the Institute of Chartered Accountants in Ireland,
(d) the Association of Chartered Certified Accountants,
(e) the Association of Authorised Public Accountants,
(f) the Association of Accounting Technicians,
(g) the Association of International Accountants,
(h) the Chartered Institute of Management Accountants, and
(i) the Institute of Chartered Secretaries and Administrators.
(5) The Secretary of State may by order amend the list of bodies in subsection (4).
(6) References in this section to the rules of a body are to rules (whether or not laid down by the body itself) which the body has power to enforce and which are relevant for the purposes of Part 42 of the Companies Act 2006 (statutory auditors) or this section; and this includes rules relating to the admission and expulsion of members of the body so far as relevant for the purposes of that Part or this section.
(7) An individual or a firm may be appointed as a reporting accountant; and section 1216 of the Companies Act 2006 applies to the appointment of a partnership constituted under the law of—
(a) England and Wales,
(b) Northern Ireland, or
(c) any other country or territory in which a partnership is not a legal person.
(1) The provisions of the Companies Act 2006 listed in subsection (2) apply to the reporting accountant and a reporting accountant’s report as they apply to an auditor of the company and an auditor’s report on the company’s accounts (with any necessary modifications).
(2) The provisions are—
(a) sections 423 to 425 (duty to circulate copies of annual accounts),
(b) sections 431 and 432 (right of member or debenture holder to demand copies of accounts),
(c) sections 434 to 436 (requirements in connection with publication of accounts),
(d) sections 441 to 444A (duty to file accounts with registrar of companies),
(e) section 454(4)(b) and regulations made under that provision (functions of auditor in relation to revised accounts),
(f) sections 499 to 502 (auditor’s right to information), and
(g) sections 505 and 506 (name of auditor to be stated in published copies of report).
(3) In sections 505 and 506 as they apply by virtue of this section in a case where the reporting accountant is a firm, any reference to the senior statutory auditor shall be read as a reference to the person who signed the report on behalf of the firm.
(1) This section applies where, in accordance with section 129, a company appoints a reporting accountant to prepare a report in respect of its accounts for any year.
(2) The regulator may require the company to—
(a) cause a qualified auditor to audit its accounts and balance sheet for that year, and
(b) send a copy of the report to the regulator by a specified date.
(3) A requirement may not be imposed before the end of the financial year to which it relates.
(4) “Qualified auditor”, in relation to a company, means a person who—
(a) is eligible for appointment as a statutory auditor of the company under Part 42 of the Companies Act 2006 (c. 46) (statutory auditors), and
(b) is not prohibited from acting as statutory auditor of the company by virtue of section 1214 of that Act (independence requirement).
(1) This section applies to a registered provider which is an industrial and provident society.
(2) Section 9A of the Friendly and Industrial and Provident Societies Act 1968 (c. 55) applies to the society as if subsection (1)(b) were omitted (accountant’s report required only where turnover exceeds specified sum).
(3) The regulator may require the society to—
(a) appoint a qualified auditor to audit the society’s accounts and balance sheet for any year of account in respect of which section 4 of the Friendly and Industrial and Provident Societies Act 1968 (audit requirements) has been disapplied (see section 4A of that Act), and
(b) send a copy of the auditor’s report to the regulator by a specified date.
(4) A requirement under subsection (3) may be imposed only during the year of account following the year to which the accounts relate.
(5) In this section—
“qualified auditor” means a person who is a qualified auditor for the purposes of Friendly and Industrial and Provident Societies Act 1968 (c. 55), and
“year of account” has the meaning given by section 21(1) of that Act.
(1) This section applies to a non-profit registered provider which is a registered charity.
(2) The charity shall—
(a) keep proper accounting records of its transactions and its assets and liabilities in relation to its housing activities, and
(b) maintain a satisfactory system of control of those records, its cash holdings and its receipts and remittances in relation to those activities.
(3) For each period of account the charity shall prepare—
(a) a revenue account giving a true and fair view of the charity’s income and expenditure during the period, so far as relating to its housing activities, and
(b) a balance sheet giving a true and fair view of the state of affairs of the charity as at the end of the period.
(4) The revenue account and balance sheet must be signed by at least two directors or trustees.
(5) “Period of account” means—
(a) a period of 12 months, or
(b) such other period not less than 6 months nor more than 18 as the charity may, with the consent of the regulator, determine.
(6) This section does not affect any obligation under sections 41 to 45 of the Charities Act 1993 (c. 10) (charity accounts).
(1) This section applies in relation to the accounts of a charity under section 135(3).
(2) If Condition 1 or 2 is met, the charity shall cause a qualified person to audit the accounts and report on them in accordance with section 137.
(3) If neither Condition is met, the charity shall cause a qualified person (“the reporting accountant”) to report on the accounts in accordance with section 138.
(4) Condition 1 is met if the accounts relate to a period during which the charity’s gross income arising in connection with its housing activities was greater than the sum specified in section 43(1)(a) of the Charities Act 1993.
(5) Condition 2 is met if—
(a) the accounts relate to a period during which the charity’s gross income arising in connection with its housing activities was greater than the accounts threshold as defined by section 43(1) of the Charities Act 1993, and
(b) at the end of the period the aggregate value of its assets (before deduction of liabilities) in respect of its housing activities was greater than the sum specified in section 43(1)(b).
(6) “Gross income” has the same meaning as in section 43 of the Charities Act 1993 (c. 10).
(7) “Qualified person” means a person professionally qualified as an accountant.