6 things you need to know about the Regulation of Registered Social Landlords (Wales) Bill
On the 8th of May 2018 the National Assembly for Wales voted in favour of enacting the Regulation of Registered Social Landlords (Wales) Bill. With the Bill about to become law with the granting of royal assent expected shortly, TPAS Cymru takes a look at the 6 things you need to know about the Bill.
1. Why is the Bill being enacted?
On 29 September 2016 the Office for National Statistics (ONS) reclassified Registered Social Landlords (housing associations) in Wales as part of the public sector. The ONS decided that the degree of control that the Welsh Government enjoyed over housing associations in Wales meant that they could not be considered as independent organisations. A similar decision was also made as to the status of housing associations in England, Northern Ireland and Scotland.
The decision would mean that the debt of housing associations (£2.5 billion in Wales) would be moved onto the public balance sheet, meaning that housing associations would now be subject to public sector borrowing rules. This would limit the ability of housing associations to borrow funds in future, significantly impacting their ability to build new social housing. The Bill was therefore introduced to reduce these government controls and to reverse the ONS’s decision.
2. Consent for disposals
One of the most significant provisions within the Bill relates to the extent of control that the Welsh Government enjoys over housing association disposals. The regime in place at the time that the ONS undertook their review into the status of Welsh housing associations required housing associations in Wales to get the consent of the Welsh Government before they could sell property. When the Bill comes into force, this will no longer be the case, with housing associations only needing to notify the Welsh Government that a disposal has taken place.
During the passage of the Bill through the legislative process at the Assembly, both the Welsh Government and housing associations stated clearly that they did not expect to see a significant increase in the sale of properties by housing associations in Wales once the change came into force. It will be interesting to see how this transpires in practice. TPAS Cymru believes that it is important that housing associations look to involve tenants in the process, wherever possible, to ensure that their views are heard as the sector begins to operate under this new approach.
3. The role of local authorities
A number of housing associations in Wales were established around a decade ago as stock transfer organisations. This process saw many local authorities transfer their council housing stock to these newly established housing associations. To reflect their distinctive role, these stock transfer organisations had to conform with a number of requirements. One of the most important of these related to the composition of their boards. Stock transfer housing associations were required to ensure that 1/3 of their boards were tenants, 1/3 were local councillors and a further 1/3 were independent. When the Bill comes into force, local councillors will no longer be eligible to make up more than 24% of a housing association’s board. As housing associations seek to react to this change, it will be important for them to consider how a community voice is heard at board level, whilst at the same time, ensuring that their board operate to high standards of governance.
4. The Welsh Government's powers over the management of a housing association.
The powers of the Welsh Government to intervene in failing housing associations will be tightened slightly when the Bill comes into force. The Welsh Government will only be able to use its intervention powers over the management of a housing association if an association has failed to comply with a requirement imposed by legislation, or a requirement that has been issued under legislation. In practice this is unlikely to have a significant impact as the Welsh Government will continue to be able to intervene in the management of a housing association if it has failed to meet the standards set out by the regulatory framework for housing associations in Wales. The Welsh Government do, therefore, maintain important powers of the management of housing associations.
5. Mergers and constitutional change
Housing associations in Wales will no longer require the consent of the Welsh Government before merging with another organisation or before making any constitutional change. They will, however, be required to notify the Welsh Government of any such changes.
Whilst housing associations may no longer require the consent of the Welsh Government before a merger takes place, the legislation does require them to consult with their tenants. There are some exceptions to this requirement. For example, a housing association which is in financial difficulty may not be required to undertake such consultation. Despite this, this legal requirement is an important protection for tenants, ensuring that they have a key role within the merger processes.
6. The role of tenant participation
A key message that has been repeated throughout the progress of the Regulation of Registered Social Landlords (Wales) Bill through the Senedd has been the importance of tenant participation. Members of all political parties, including the Conservatives, Labour and Plaid Cymru have spoken about the important role that tenant participation should play within the social housing sector in Wales. TPAS Cymru has been delighted to hear such cross-party support for tenant participation. We believe that this should give confidence to all of those working within tenant participation in Wales that your work is valued and that there is support for us all to work together to develop the already excellent work that is ongoing within our communities.