Alicia McKay

Head of FOI Unit

Constitution, Law and Courts Directorate

Constitutional and Parliamentary Secretariat

The Scottish Government

Victoria Quay, Edinburgh EH6 6QQ

23 September 2008

Dear Ms McKay

Extension of coverage under the Freedom of Information (Scotland) Act 2002

Thank you for your letter of 12 August to Karen Watt, in which you outline your planned discussions with various bodies and ask for comments on the possible extension of the Act to cover registered social landlords (RSLs). Karen has asked me to respond on her behalf.

Freedom of information has introduced important new rights to citizens and consumers of public services. Extending these rights to tenants of RSLs would send a clear message that the sector must be open, transparent and accountable, and would provide a level playing field across the social rented sector in terms of access to information. But it would also raise a number of issues and I think you are right to consider the merits of alternative approaches to making information available alongside those of extending coverage of FOISA.

I think there are three central issues to consider in relation to RSLs:

1 The status, role and funding of RSLs

RSLs are independent organisations which are constituted either as Industrial and Provident Societies or companies limited by guarantee and are run by voluntary committee members. Most RSLs are housing associations but some are housing co-operatives, owned and managed by their members. Historically the sector developed independently of government. In recent years, following a ballot of their tenants, a number of local authorities have transferred their houses to RSLs which were established as new large scale voluntary transfer landlords. So, the sector is very diverse and associations range in size from the very large to the very small. Of the 169 RSLs in Scotland only two own more than 6,000 houses (with a combined stock of 83,000 houses). Between them, the remaining 167 RSLs have a stock of 189,000 houses.

The Housing (Scotland) Act 2001 sets out the conditions for registration as a social landlord. These are that the organisation:

 must not trade for profit; and

 its principal purpose must be to provide, construct, improve or manage

houses which are to be kept available for letting, or in the case of housing

co-operatives, are for occupation by its members.

Many RSLs also provide other services to their tenants or the community. These include housing support, welfare advice, and services for owner-occupiers, such as care and repair and factoring services.

RSLs are eligible for public funding in the form of housing association grant for new-build housing. However, the majority of their funding comes from tenants' rents and from private lenders. Around £2.9 billion is currently available in private finance to the sector, and RSLs have drawn down around £1.7 billion of this.

2 The regulatory framework

The Scottish Housing Regulator was established as an executive agency on 1 April this year, following the abolition of Communities Scotland. Our powers as a regulator are set out in the Housing (Scotland) Act 2001. We regulate registered social landlords and local authorities to:

While RSLs themselves are not subject to FOISA the Scottish Housing Regulator is, as a public body and Government agency. We hold a wide range of information about RSLs and much of this is publicly available. Where information is not already published the requirements of the Act may oblige us to make it available.

As the regulator, we also expect RSLs to operate in an open and accountable way. These expectations are reflected in the performance standards for social landlords and homelessness functions, jointly published by Communities Scotland, COSLA and the Scottish Federation of Housing Associations. They include a standard on openness and confidentiality: `We are open about what we do and publish information about our activities. We provide information that people ask for, unless there are justifiable reasons for withholding it.' Our regulatory code of governance for RSLs, which is statutory guidance published on behalf of Scottish Ministers, reinforces these expectations. The code encourages landlords to be proactive in publishing information and in making service users aware of the range of information available to them. We monitor the extent to which RSLs meet these standards through our regulation and inspection activity, including thematic work.

The thematic study on landlords' openness and accessibility that we published last year did find there was a need for some RSLs to be more open and accountable, for example by publishing minutes of their committee meetings. But the study did not convince us that extending coverage of the FOISA would necessarily address the issues we identified. Local authorities are subject to a number of other legal requirements that influence the amount and kind of information they publish, such as the various Local Government Acts. And it is also true that we found examples of positive practice (and less good practice) across both the RSL and local authority sectors, leading us to conclude that good practice in consultation with tenants may be more important than legislation in determining how open and accountable landlords are. We have said we intend to carry out a follow-up study in a year or two to assess the study's impact on the sector.

In terms of the wider context of regulation and scrutiny the Crerar Review, published last year, called for a simplified scrutiny landscape. The Scottish Government has endorsed a number of the review's recommendations and established four scrutiny review action groups to consider how they should be implemented. In general the Government's objectives are to reduce bureaucracy and establish a more streamlined approach to scrutiny of both public and private bodies.

3 Practical implications of extension

Our own experience has shown that dealing with requests for information in line with FOISA can be time-consuming and take staff away from their day-to-day duties. Complying with regulatory requirements and legislation can be particularly onerous for smaller organisations with limited resources, potentially taking staff away from front-line work. One issue to consider is whether extension is consistent with the Government objective to reduce bureaucracy.

Adopting an incremental approach, as you suggest in your letter as a possible alternative to blanket extension, has some attractions. But I am not sure it would be the answer, and it would inevitably raise expectations that FOISA should eventually be extended to the whole of the sector. Perhaps more importantly it does not address the issue of how RSLs are funded.

In this respect, I think your letter touches on one of the fundamental issues you will need to consider. This is whether RSLs can be designated public authorities for the purposes of the Act and the potential implications of doing so. I have mentioned that private lending plays a significant role in funding the RSL sector, and that this private funding does not count towards the public sector borrowing requirement. Designating them as public authorities, by contributing to the progressive designation of RSLs as public bodies, could have serious implications for the future funding of the sector.

There are arguments on both sides of the debate about RSLs and FOISA. I have not sought to rehearse them all in this letter, but have focused as you requested on some of the central issues.

There is no doubt that the Act has brought about a change in culture and an increased expectation that services will operate in an open and accountable way. I note that you are also seeking views from the Scottish Federation of Housing Associations and I believe that the SFHA has an important role to play in promoting good practice and encouraging its members to be more open and accountable.

I hope these comments are helpful and look forward to receiving your discussion paper in due course.

Yours sincerely

Iain Muirhead

Head of Policy and Corporate Services

Highlander House, 58 Waterloo Street, Glasgow, G2 7DA

Tel: 0141 271 3810 Fax: 0141 221 5030

www.scottishhousingregulator.gov.uk

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