Social Housing Speed Read – fees guidance
11th September, 2017
As the Homes and Communities Agency begin sending notice letters to providers in relation to their fee charging scheme, we take a look at the guidance recently published by the regulator.
What’s new?
Following a consultation in 2016, the Homes and Communities Agency (“HCA”) has now published guidance on the impending fees scheme, set to be introduced next month.
In brief, from October 2017, the new fees framework will include:
- a fixed fee of £2,500 to all successful applications for initial registration with the HCA;
- a fixed annual fee of £300 for providers with fewer than 1,000 social housing units; and
- for 2017/18, an annual per unit fee of £4.72 for large providers with 1,000 or more social housing units.
What’s the guidance on the fees?
Initial registration fee
The initial registration fee is payable by all new private registered providers successfully registered by the HCA as a provider of social housing. Local authorities subject to compulsory registration are exempt from this fee.
The HCA has committed to not increasing the initial registration fee until the end of 2019/20 financial year and will be subject to periodic review after this date.
Do we need to pay this if we are already registered with the HCA?
Existing providers are not required to pay the initial registration fee but instead will be required to pay the annual fee to which they are subject to.
Annual fees
The annual fee for a registered provider is based on the number of social housing units owned by the provider. For providers subject to the per-unit fee, only 50% of the applicable annual fee is due for 2017/18.
How do the HCA calculate the amount of units a provider has?
In calculating the fee, a “unit” is defined as social housing where the private registered provider is the owner. Information is gathered by the HCA as recorded on their Statistical Data Return as at 31 March in the given year.
What will be charged if we are part of a group of registered providers?
Where a group of providers have a parent who is also a registered provider and, in aggregate, own over 1,000 social housing units, a single fee is charged to the parent registered provider for the total number of units.
In the situation where the group parent is not a registered provider, fees are collected from each individual entity of the group.
What if the group of registered providers, in total, has fewer than 1,000 units?
Where a registered parent of a group has an aggregate number of social housing units of fewer than 1,000, even if the parent provider is registered, each registered provider in the group will be required to pay the single fixed rate.
The HCA explain that this is because they are required to carry out small provider checks for each entity in the group that cost, at a minimum, £300 to undertake.
De-registration
Providers must pay the full cost of the annual fee due, regardless of whether they register or de-register at any time in the year.
What if we are restructuring or merging?
The initial registration fee is not applicable to new registrations stemming from transfers of engagement from/between existing registered providers.
Typically, the HCA will waive the charge on the registration of the new or restructured entity; however, those who de-register and do not register again will pay for the full year. No pro-rata discounts can be expected from the HCA after 2017/2018.
Next steps
For 2017/18, providers should already be receiving the invoices for the remainder of this financial year. For all subsequent financial years, providers should expect to receive invoices in February/March.
When do we need to pay the fee?
The HCA has set the payment terms as within 30 days of receipt of the invoice. “Smaller providers” with cash flow concerns may request a quarterly payment plan according to guidance. The HCA note they may take enforcement action in the event fees are not paid.
If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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