Social housing
Section 31 - Duties in relation to social housing
59.This section requires the HCA when -
acquiring, constructing or converting any housing or land for use as low cost rental accommodation, (subsections (1) and (2));
disposing of housing or land on the condition that low cost rental accommodation is provided (subsections (3) and (4));
providing infrastructure on condition that low cost rental accommodation is provided (subsections (5) and (6)); or
giving financial assistance on condition that low cost rental accommodation is provided (subsections (7) and (8)),
to ensure that when the accommodation is made available for rent the landlord is a “relevant provider of social housing”. A “relevant provider” is a registered provider of social housing (as defined by section 80(2)(a)), an English local housing authority (or a person controlled by such an authority), or a county council in England. Low cost rental accommodation is accommodation which is made available for rent, the rent is below the market rate and the accommodation is made available in accordance with rules designed to ensure that the accommodation is made available to people whose needs are not adequately served by the commercial housing market. If the HCA is proposing to give financial assistance on condition that the recipient provides low cost home ownership accommodation (as defined by section 70) the HCA must consult the Regulator of Social Housing about the proposals.
Section 32 – Recovery etc. of social housing assistance
60.This section gives the HCA powers in relation to a person who has received financial assistance for the provision of social housing. The HCA may-
reduce, suspend or cancel grant payments (or other financial assistance); or
direct the recipient of financial assistance by way of grant to:
a)apply or appropriate for such purposes of the recipient as the HCA may specify; or
b)pay to the HCA,
such amount as the HCA may specify.
61.The aggregate of the amounts specified in directions given in respect of that grant cannot be greater than the amount of grant received by that person, although interest may be added to the original amount (see section 33).
62.The powers to recover financial assistance may only be exercised in accordance with principles determined by the HCA.
63.These powers enable the HCA to operate a system similar to the Housing Corporation’s “Recycled Capital Grant Fund” operated under section 27 of the Housing Act 1996. This enables the Housing Corporation to require, as a condition of grant that, for example, when a property grant-funded by the Corporation is disposed of, a sum specified by the Corporation (which could be the amount of original grant, or a proportion of the property value) is either repaid to the Corporation, or is applied by the grant recipient to a purpose specified by the Corporation, such as the provision of new social housing.
64.Subsection (11) requires the HCA to notify the Regulator of Social Housing 14 days before exercising any power under section 32(2), (3) or (4) to reduce, suspend or cancel grant, or require repayment or reapplication of specified sums, in relation to a registered provider of social housing.
65.The HCA must determine in advance of (or at the time of) providing the financial assistance the events in which (and the principles according to which) it will exercise its powers to recover the assistance.
Section 33: interest and successors in title
66.Subsections (1) to (5)provide that the HCA may add interest to sums to be repaid under section 32 and enter into agreements with recipients of grants which include arrangements for sharing equity uplift between the HCA and the recipient. It also has power to suspend or reduce interest. This section replicates the provisions in sections 27(4) and (5) of the Housing Act 1996.
67.Subsections (6) and (7)provide that a person acquiring social housing from the recipient of social housing assistance will also be subject to the HCA’s powers of recovery under section 32. This section replicates section 27(6) of the Housing Act 1996.
68.This section also requires that any determination on the principles of adding interest or entering into an equity sharing agreement have to be made at or before the award of grant funding.
Section 34 – Determinations under sections 32 and 33
69.This section sets out the process for determinations under sections 32 and 33. A determination could define the “relevant events” which would trigger these requirements (e.g. the disposal of a grant-funded property), or it could specify the purposes to which sums may be applied (e.g. the provision of similar properties, the refurbishment of others, etc.).
70.Subsection (1)prohibits the HCA from making a general determination without the consent of the Secretary of State. And subsection (2)requires the HCA, before making such a determination, to consult the Regulator of Social Housing, and other appropriate persons.
71.The HCA may vary or revoke a determination but, in varying or revoking a determination, the HCA cannot override the provision that events and principles according to which it exercises its powers to recover grants must be predetermined.
Section 35 - Duty to give financial assistance in respect of certain disposals
72.Section 35 broadly replicates the effect of the duties placed on the Housing Corporation under sections 20 and 21 of the Housing Act 1996.
73.It places a statutory duty on the HCA to provide financial assistance by way of grant to a registered provider of social housing or a registered social landlord in respect of discount provided to a tenant exercising their right to acquire under the right to acquire provisions in Part 2 of the Act (or under section 16 of the Housing Act 1996, where a Welsh social landlord is disposing of a dwelling in England). The requirement also applies if a tenant entitled to the right to acquire chooses to purchase an alternative property in England offered by their landlord.
74.The grant given to a person in any one year is limited to the total value of the discounts given by the person in that year. The HCA is required to specify the procedure to be followed in relation to applications for the grant; the method for calculating and any other limitations on the amount of grant; the manner and timing of payment and any other terms and conditions under which the grant will be given.
75.The purpose of this duty is to ensure that providers of social housing receive the market value for the properties they are required to sell to tenants at a discount. This duty ensures that they receive full market value for the property while the disposal proceeds fund system ensures that proceeds are spent on replacement social housing.
Section 36 - Information in relation to social housing
76.This section enables the Secretary of State to make an order requiring the HCA to produce information about its provision of accommodation for the purposes of social housing and the consequences of that accommodation being social housing. For example, the intention is that where funding is provided by the HCA for the purposes of providing housing, the HCA would be required to notify the Regulator of Social Housing about which housing will be low cost rental accommodation and thus should be transferred to a registered provider of social housing, if the recipient of the funding is not such a provider.
Section 37 - Duty to co-operate with Regulator of Social Housing
77.Under this section the HCA is required to co-operate and consult with the Regulator of Social Housing on matters of general interest. For example, the HCA should take account of the regulator’s views when it proposes to invest in the provision of social housing. The Regulator of Social Housing is under a corresponding duty to co-operate with the HCA by virtue of section 105.