Covid-19 has resulted, on the whole, in a marked co-operation between contracting authorities and their suppliers as everybody focuses on maintaining delivery as far as possible.
However, it fairly quickly became apparent that for the almshouse charities which are also Registered Providers (and, therefore, regulated by the Homes and Communities Agency) there were a number of potential barriers to the move to CIO status. First was the question of whether or not the existing charity’s HCA registration would transfer across to the CIO or whether a new registration would be required. Secondly, would the transfer of properties from the trust to the CIO represent a disposal for which HCA consent was required? Thirdly, and most importantly, would the transfer of properties be a relevant event which triggered a requirement for the repayment of any social housing grant received by the trust? This would, of course, be a major financial constraint for most trusts.
The trustees of one of our almshouse clients decided at an early stage that they wished to convert to a CIO structure, not least because there are proposals for the charity to enter into a major development project and the trustees were, therefore, concerned that the development project should be undertaken by the CIO and not by the unincorporated trust so as to remove the risk of personal liability for the trustees in relation to that development. Contact was made with HCA for guidance on this issue and it became clear that this scenario had not been considered by the HCA up to that point as there was no clear policy on these issues. There has then been a prolonged period of over a year in which HCA has been taking advice from its lawyers in order to develop a formal policy. During that time we have been providing input to HCA's lawyers and others as regards the legal principles underpinning the CIO structure and suggestions as regards how the issue might be addressed.
We are pleased to note that the HCA has now made a determination in relation to our client charity. The approach being taken has been communicated formally to the Almshouse Association and so we assume it represents the HCA’s agreed position and policy in relation to CIOs.
The key points to note are that:
- the new CIO will need to register with the HCA (i.e. there is no transfer of the existing charitable trust’s registration). The HCA has, however, indicated that in these circumstances it will adopt a ‘light touch’ registration process equating to that which would apply in the case of a re-structure by a Registered Provider;
- the HCA considers that a transfer of properties to the CIO will represent a disposal for which its consent is required and consent will need to be applied for once the CIO registration is complete; and
- the HCA considers that the transfer of properties would be a relevant event which would trigger the repayment of any social housing grant received by the charitable trust. However, HCA has indicated that if the charitable trust and the new CIO enter into a Deed of Covenant to maintain clarity about the HCA’s right of grant recovery in the future then the grant monies would not be immediately repayable by the CIO. The form of the Deed of Covenant is not yet known but we expect that this will simply indicate the HCA’s right to recover grant monies in certain circumstances in the future, most particularly if the relevant properties are sold.
Whilst the requirements of the HCA will create additional administrative actions for any charitable trust converting to CIO status they are not, of course, unreasonable. Now that the HCA’s position has been clarified the barrier to unincorporated almshouses converting to CIO status has been removed and we expect to see a surge in the number of almshouses wishing to pursue this course of action over the next year or two.
For more information
For more information or if you are an almshouse charity wishing to pursue a conversion into CIO status, please contact Phil Watts.
As we enter a recession, we have been here before, and a key question is what did we learn and how can we benefit from that learning?
It is anticipated that as lockdown restrictions ease, and particularly with children and young adults returning to education, cases of meningitis will start to rise.
As we continue to emerge from lockdown measures and deal with local measures and the short and long term economic impact of Covid-19, local authorities will need to re-assess how services will be delivered for years to come.
The Government first announced plans for a shared ownership right to buy in October 2019. At the time the sector raised concerns about the impact the plans would have on housing associations ability to borrow. An election and a pandemic later the Government announced, during the CIH Housing Festival last week, the return of the right to shared ownership as part of its Affordable Homes Programme (AHP).
Two final pieces of the possession jigsaw have been published on 15 September 2020. Mr Justice Knowles’ working group on possession proceedings has issued its guidance on the “overall arrangements” for possession proceedings.
One change proposed by the Building Safety Bill is the introduction of a duty holder regime, which will see statutory responsibility for the safety of higher risk buildings placed on key individuals
Throughout this pandemic, the Competition and Markets Authority (CMA) has been publishing various “Statements on Coronavirus” (Statements) which provide guidance on consumer rights during this time.
A recent increase in COVID-19 cases in the UK means new measures are being put in place in an effort to reduce the risk of a second wave. Whilst the impact of COVID-19 continues to be felt, it is important to remain focused on the sector’s road to recovery.
Sometimes half an hour at a conference gives you the reality that has been staring you in the face all along. That was my experience watching “Change is on the Horizon”
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.