46th Report, 2012 (Session 4): Subordinate Legislation

SP Paper 197 (Web Only)

SL/S4/12/R46

46th Report, 2012 (Session 4)

Subordinate Legislation

Remit and membership

Remit:

The remit of the Subordinate Legislation Committee is to consider and report on—

(a) any—

(i) subordinate legislation laid before the Parliament;

(ii) [deleted]

(iii) pension or grants motion as described in Rule 8.11A.1;

and, in particular, to determine whether the attention of the Parliament should be drawn to any of the matters mentioned in Rule 10.3.1;

(b) proposed powers to make subordinate legislation in particular Bills or other proposed legislation;

(c) general questions relating to powers to make subordinate legislation;

(d) whether any proposed delegated powers in particular Bills or other legislation should be expressed as a power to make subordinate legislation;

(e) any failure to lay an instrument in accordance with section 28(2), 30(2) or 31 of the 2010 Act; and

(f) proposed changes to the procedure to which subordinate legislation laid before the Parliament is subject.

(Standing Orders of the Scottish Parliament, Rule 6.11)

Membership:

Nigel Don (Convener)
Mike MacKenzie
Hanzala Malik
Stuart McMillan
John Pentland
John Scott
Stewart Stevenson (Deputy Convener)

Committee Clerking Team:

Clerk to the Committee
Euan Donald

Support Manager
Daren Pratt

Subordinate Legislation

The Committee reports to the Parliament as follows—

1. At its meeting on 23 October 2012, the Committee agreed to draw the attention of the Parliament to the following instrument—

Housing (Scotland) Act 2001 (Assistance to Registered Social Landlords and Other Persons) (Grants) Amendment Regulations 2012 (SSI 2012/258).

2. The Committee’s recommendation in relation to this instrument is set out below.

3. The instruments that the Committee determined that it did not need to draw the Parliament’s attention to are set out at the end of this report.

POINTS RAISED: INSTRUMENTS SUBJECT TO NEGATIVE PROCEDURE

Housing (Scotland) Act 2001 (Assistance to Registered Social Landlords and Other Persons) (Grants) Amendment Regulations 2012 (SSI 2012/258). (Infrastructure and Capital Investment Committee)

4. This instrument amends the Housing (Scotland) Act 2001 (Assistance to Registered Social Landlords and Other Persons) (Grants) Regulations 2004 (“the principal Regulations”). It revokes Schedule 2 of the principal Regulations, which makes provision for a type of grant assistance known as GRO for owner occupation, and replaces it with a new Schedule 2 which makes provision for a new type of grant assistance known as Partnership Support for Regeneration, or PSR. Further provision is made in a new Schedule 5 for another type of grant assistance to be known as Innovation and Investment Fund grant, or IIF.

5. The instrument is subject to the negative procedure, and comes into force on 19 November 2012.

6. In considering the instrument, the Committee asked the Scottish Government for clarification of certain points. The correspondence is reproduced in Appendix 1.

Question 1 – procedure in relation to IIF grants

7. This instrument inserts a new Schedule 5 into the principal Regulations to make provision for Innovation and Investment Fund grants. Part 3 of the new Schedule specifies the procedure to be followed by a local authority in considering grant applications. Unlike the other Schedules, however, the new Schedule does not directly prescribe the procedure to be followed. Instead, it directs local authorities to ensure that the invitation of applications, assessment of applications and approval of grant are carried out “in accordance with” a letter sent jointly by the Scottish Ministers and COSLA to local authority chief housing officers on 21 March 2011.

8. The letter was jointly written by the Scottish Ministers and COSLA. It invited local authorities themselves to make applications to the Ministers for IIF grants for development projects run by the authority. Those applications were to be assessed jointly by the Ministers and COSLA. The timescales laid out in the letter commenced in February 2011 and concluded with the awarding of grants in August 2011. The criteria specified in the Annex to the letter appear on the face of it to be relevant to local authorities seeking funding from central government.

9. By contrast, applications under Schedule 5 of the principal Regulations may be made by registered social landlords (“RSLs”) and their subsidiaries to local authorities for IIF funding. In the Committee’s view, the letter does not contain provision about how local authorities should consider IIF grant applications from RSLs. The letter instead sets out how local authorities themselves should apply for IIF grants from the Scottish Ministers.

10. The power in section 93 of the Housing (Scotland) Act 2001 (“the 2001 Act”) was delegated by the Parliament to the Scottish Ministers in order that they might regulate the procedure to be followed by local authorities in considering applications for grants. The Committee considers that the purpose of so doing was to ensure that a) it would be sufficiently clear to local authorities what was required by way of procedure in considering applications, b) there would be a degree of uniformity across the 32 local authorities who may require to consider applications in the way that those applications are handled and c) transparency might be assured for grant applicants.

11. In considering applications for IIF grants, it might be argued that local authorities are to be expected to apply – by analogy – a similar procedure to the procedure which they are subject in themselves making an application, as set out in the letter. However, paragraph 4 of Schedule 5 does not make provision to that effect. It simply says that the procedures in question are to be carried out “in accordance with” the letter.

12. As far as the purposes for which the power was conferred are concerned, it appears to the Committee that there is a substantial lack of clarity as to what local authorities must do by way of procedure in considering applications. The Committee cannot readily ascertain what is required of authorities from the letter, and it contrasts this with the equivalent Part 3 in each of the other Schedules, which sets out (in greater or lesser detail) the steps which must be taken.

13. The Committee considers that the Scottish Ministers intended to make provision under section 93(2)(b) about the procedure to be followed by local authorities in considering applications for IIF grants. That provision is contained in paragraph 4 of the new Schedule 5, which effectively provides a reference to the letter of 21 March 2011. In the Committee’s view, however, the provision which is made fails adequately to specify the procedures to be followed by local authorities in considering applications, for the reasons explained above. The Committee accordingly consider that the instrument appears to be defectively drafted insofar as it purports, at paragraph 4 of new Schedule 5, to provide for the procedure to be followed by local authorities in considering applications for IIF grants.

14. The 2001 Act confers powers on the Scottish Ministers to make regulations about three specific aspects of providing assistance for housing purposes. They may provide for: a) the purposes for which, and the classes of people to whom, local authorities may provide, among other things, grant assistance, b) the procedure to be followed by local authorities in considering whether to provide assistance and c) the terms and conditions on which it is to be provided, including conditions for repayment.

Question 2 – eligibility for PSR grants

15. Each Schedule of the principal Regulations relates to a different type of grant assistance. Regulation 4 specifies that, in each case, Part 1 of each Schedule provides the purposes for which local authorities may provide grant assistance, Part 2 provides the classes of person to whom it may be provided, Part 3 provides the procedures to be followed in considering an application and Part 4 provides the terms and conditions on which it is to be provided. This division of each Schedule into four Parts is continued in the new Schedules inserted by this instrument. Part 3 in each case is accordingly made in exercise of the powers conferred by section 93(2)(b) to specify the procedure to be followed by local authorities in considering whether to provide assistance.

16. In the new Schedule 2 as inserted by this instrument, Part 3 consists of paragraph 4 which is divided into a number of sub-paragraphs. Sub-paragraph (g) provides that a local authority must ensure that “the grant applicant already has, or will be able to obtain, control of the development site or property”. The Committee does not consider that this provision, properly construed, is an aspect of the procedure to be followed by a local authority in considering whether to provide assistance. Instead, it appears to be a criterion which prospective applicants would have to satisfy in order to be eligible for assistance.

17. In their response, the Scottish Ministers indicate that “[t]he paragraph referred to is indeed intended as a restriction in eligibility, in other words no PSR grant applicant should be successful unless they have, or will be able to obtain, control of the development site.” They go on to advise that the procedure envisaged is “such as is necessary to ensure that this restriction is complied with.”

18. The position adopted by the Scottish Ministers accordingly appears to the Committee to be problematic in two respects. First, they accept that this provision is intended to operate as a restriction in eligibility. They do not explain why it ought to be considered to be a procedural requirement. Secondly, in stating that the procedure is “such as is necessary to ensure that this restriction is complied with”, the Ministers appear to accept that paragraph 4(g) does not of itself set out any procedure to be followed. Local authorities are instead to determine a procedure for themselves which achieves that outcome. Even if it were accepted that paragraph 4(g) is capable of being procedural, rather than setting out a substantive eligibility criterion, the fact remains that it does not actually specify a procedural step to be taken.

19. For these reasons, the Committee has difficulty in accepting the Scottish Ministers’ analysis of paragraph 4(g). However, it considers that some assistance may be derived from the Ministers’ alternative position set out in the final paragraph of their response. They point to section 92(2)(a), which allows the Ministers to make regulations providing for the classes of person to whom assistance may be provided. They say that this provision should be interpreted as limiting the classes of persons to whom assistance may be provided to those persons who have, or will be able to obtain, control of the development site.

20. The Committee accepts there is some force in this argument. Part 2 of Schedule 2 (paragraph 3) specifies that private developers, housing trusts and non-registered housing associations are the classes of person who may apply for this type of grant assistance. Paragraph 4(g) can be interpreted as further restricting that specification to a sub-set of each of those classes, namely private developers, housing trusts and non-registered housing associations who have, or will be able to obtain, control of the development site.

21. In accepting this argument, however, the Committee points out that it violates the structure of the principal Regulations as set out in regulation 4, whereby the classes of persons eligible are said to be specified in Part 2 of each Schedule, and the procedures to be followed by a local authority in considering applications in Part 3. More importantly, the Committee considers it unlikely that the end-users of the principal Regulations, as amended by this instrument, would find it easy to determine eligibility for PSR grants when some of the criteria to be applied are not specified in Part 2 (headed “CLASSES OF PERSON”) but instead appear in Part 3 (headed “PROCEDURES TO BE FOLLOWED BY A LOCAL AUTHORITY”). It accordingly appears that the intended meaning might have been more clearly expressed had the provision in paragraph 4(g) been grouped with the other eligibility criteria in Part 2 of the Schedule.

22. The Committee draws the instrument to the attention of the Parliament on reporting ground (i) as it appears to be defectively drafted. Schedule 2 inserts a new Schedule 5 into the Housing (Scotland) Act 2001 (Assistance to Registered Social Landlords and Other Persons) (Grants) Regulations 2004. Paragraph 4 of the new Schedule 5 purports to make provision as to the procedure which local authorities must follow in considering applications for IIF grants. It does so by requiring local authorities to ensure procedures for a) the invitation of applications, b) the assessment of applications and c) the approval of grants are carried out in accordance with the terms of a specified external document.

23. On consideration of that document, it does not appear that it contains any provision which regulates the procedure to be followed by local authorities in considering applications for IIF grants. The document rather concerns itself with how the Scottish Ministers and COSLA will deal with applications for IIF grants from local authorities themselves. The lack of specification as to how a document for a different purpose is to be given effect in these circumstances casts doubt as to whether the instrument effectively makes any provision as to the procedure to be followed by local authorities, despite that being its apparent intention.

24. The Committee also draws the instrument to the attention of the Parliament on reporting ground (h) as the form or meaning of the instrument could be clearer. Schedule 1 inserts a replacement Schedule 2 into the Housing (Scotland) Act 2001 (Assistance to Registered Social Landlords and Other Persons) (Grants) Regulations 2004. Paragraph 4(g) of the replacement Schedule 2 purports to provide procedures to be followed by a local authority in considering applications for PSR grants. However, that provision requires that the applicant have, or be able to obtain control of the development site. As such, it appears instead to be a criterion for eligibility and so the meaning of the instrument would be clearer (and the internal form of the Regulations being amended more closely respected) had that provision been contained in Part 3 of the Schedule which prescribes the classes of persons eligible to apply for grants of this type, instead of appearing in Part 4 in the guise of a procedural requirement.

NO POINTS RAISED

25. At its meeting on 23 October 2012, the Committee also considered the following instruments and determined that it did not need to draw the attention of the Parliament to any instrument on any grounds within its remit:

Economy, Energy and Tourism Committee

Land Registration etc. (Scotland) Act 2012 (Commencement No. 1) Order 2012 (SSI 2012/265 (C.26))

Health and Sport Committee

Glasgow Commonwealth Games Act 2008 (Ticket Touting Offence) (Exceptions for Use of Internet etc.) (Scotland) Regulations 2012 [draft]

Glasgow Commonwealth Games Act 2008 (Commencement No. 3) Order 2012 (SSI 2012/261 (C.25))

Food Protection (Emergency Prohibitions) (Radioactivity in Sheep) and the Export of Sheep (Prohibition) Revocation (Scotland) Order 2012 (SSI 2012/263)

Infrastructure and Capital Investment Committee

Rent (Scotland) Act 1984 (Premiums) Regulations 2012 [draft]

Private Rented Housing (Scotland) Act 2011 (Commencement No. 4) Order 2012 (SSI 2012/267 (C.27))

Rural Affairs, Climate Change and Environment Committee

Fishing Boats (Satellite-tracking Devices) (Scotland) Scheme 2012 (SSI 2012/264)

Plant Health (Scotland) Amendment Order 2012 (SSI 2012/266)

APPENDIX 1

Housing (Scotland) Act 2001 (Assistance to Registered Social Landlords and Other Persons) (Grants) Amendment Regulations 2012 (SSI 2012/258)

On 28 September 2012, the Scottish Government was asked:

1. Schedule 2 inserts a new Schedule 5 into the Housing (Scotland) Act 2001 (Assistance to Registered Social Landlords and Other Persons) (Grants) Regulations 2004 (“the principal Regulations”). Paragraph 4 of this new schedule refers to a letter dated 21 March 2011 which sets out the procedures to be followed by a local authority in relation to IIF applications. Please explain why prescribing the procedure by reference to an external document is not considered to constitute sub-delegation of the Ministers’ power under section 93 of the Housing (Scotland) Act 2001 (“the 2001 Act”) to make regulations which make provision for the procedure to be followed by local authorities in considering whether to provide assistance.

Further, and in any case, please explain the procedure to be followed by local authorities in considering IIF applications. In terms of new Schedule 5, it appears that IIF applications may be made by registered social landlords and their subsidiaries to local authorities, whereas the letter bears to set out the procedures applicable where a local authority applies to the Scottish Government for funding.

2. Schedule 1 inserts a new Schedule 2 into the principal Regulations. Paragraph 4(g) purports to provide procedures to be followed by a local authority in relation to PSR applications. Please explain why this provision is considered to within the scope of the enabling powers when it appears that it prescribes a criterion for eligibility for PSR grants rather than a procedure to be followed by local authorities in determining an application.

The Scottish Government responded as follows:

Background

Local authorities were invited by a joint Scottish Government and CoSLA letter dated 21 March 2011 to submit bids for provision of affordable housing. Those bids are in respect of a fund known as the Innovation and Investment Fund. That letter encourages collaborative working between local authorities and Registered Social Landlords (RSLs).

Some housing grant payable to local authorities is used by them to fund activity by RSLs. The principal Regulations provide conditions that apply to categories of grant assistance (currently known as HAG, GRO, RHOG and GPSE) that are paid by local authorities to RSLs. The amendment Regulations revoke the conditions in respect of GRO, which is being discontinued, and insert new categories for the category to replace GRO, to be known as Partnership Support for Regeneration (PSR), and for the new fund (IIF).

1. The reference to a letter at paragraph 2 of the Schedule 5 inserted by Schedule 2 of the amendment Regulations is not sub-delegation, as the text of the letter is already published, is fixed and is ascertainable. The reference is simply convenient shorthand to avoid the alternative, of repeating the content in the amendment Regulations. It sets out how Ministers intend to operate the new fund, IIF, in terms of the grants they will make from that fund. The provision in the amendment Regulations is that which is to apply where a local authority is managing a housing development programme using IIF money to fund activity by an RSL. Such assistance is provided by the local authority under section 93 of the 2001 Act, and thus subject to such conditions as the local authority may specify, within the framework of provision made by the Scottish Ministers.

The procedure to be followed in assessing bids submitted to a local authority for support using IIF money is for the local authority to determine, and as a result the new Schedule 5 of the principal Regulations has little within Part 3, when compared for example with Part 3 Schedule 1 to the principal Regulations. It provides that the local authority must carry out invitation of applications, assessment of applications and approval of grant in a manner that accords with what is contained in the letter of 21st March 2011. Thus, applications would have to be assessed to ensure that proposed developments fit within the Local Housing Strategy, that the number of units that are built is maximised within the resources available but not at the expense of having to compromise on design quality. Grant could not be approved by a council unless the recipient RSL was willing to be subject to a grant agreement that would provide the project information that the Scottish Government will require from the council, as per the "Funding Agreements" part of the letter. In short, the letter is referred to as a framework within which they must compliantly set their own conditions.

2. The paragraph referred to is indeed intended as a restriction in eligibility, in other words no PSR grant applicant should be successful unless they have, or will be able to obtain, control of the development site. The procedure that is to be followed by a local authority is such as is necessary to ensure that this restriction is complied with.

This is not novel. Other procedural requirements, in Part 3 of other Schedules, include checking that an applicant meets specific criteria, such as paragraph 4(c) of Schedule 3 (RHOG) which has a condition to prevent approval where a project is eligible for another type of grant.

Even if this were not a procedural provision (and the Scottish Government considers that it is such a provision), it would be within the scope of the power at section 93(2)(a) of the 2001 Act, which allows provision as to the classes of person to whom assistance may be provided, in other words assistance may only be provided to persons who are in a position to provide a development site.

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