TDS secret contracts remain shrouded in mystery - why?

The Tenancy Deposit Scheme (TDS) was introduced with a fanfare by the government in 2007 as a way of protecting tenants deposit against the perceived scourge of dishonest landlords with holding a tenants deposit a the end of a tenancy.

Three approved government providers were appointed. However, the basis of their appointment and the contracts between the government and the providers has always been a mystery to those in the letting industry. Why were they chosen? What basis was their appointments made?

Grant Shapps the shadow housing Minister recently tried to get to the bottom of things by requesting that copies of the contracts be placed on public deposit. However, the governments representative Ian Austin MP refused citing the commercial sensitivity of the information.

What are they trying to hide? We can only speculate.

The full exchange went as follows:

Grant Shapps: To ask the Secretary of State for Communities and Local Government pursuant to the answer of 9 March on tenancy deposit schemes, if he will place in the Library a copy of the contract between his Department and each tenancy deposit scheme provider.

Ian Austin: The contracts between Communities and Local Government and the tenancy deposit protection scheme providers contain commercially confidential information. I am therefore unable to place copies in the Library.

Grant Shapps: To ask the Secretary of State for Communities and Local Government pursuant to the answer of 9 March on tenancy deposit schemes, what mechanisms are in place to ensure the financial viability of tenancy deposit schemes.

Ian Austin: The contracts under which the tenancy deposit schemes operate are designed to ensure that they continue to be financially viable. Those contracts are commercially sensitive. But I can confirm that the mechanisms which they contain in order to safeguard financial viability include restrictions on investments and agreed method statements based on the schemes’ initial business planning assumptions. All these measures are kept under close review.

Grant Shapps: To ask the Secretary of State for Communities and Local Government pursuant to the answer of 9 March on tenancy deposit schemes, whether he has made an assessment of the adequacy of the self-financing aspect of the business models of the private companies under contract to his Department.

Ian Austin: We closely monitor the three tenancy deposit scheme providers with contracts with Communities and Local Government and hold regular contract governance meetings with them. We are satisfied that their business models are adequate to facilitate the ongoing financing of their schemes.

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