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Session 2002 - 03
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Standing Committee Debates
Local Government Bill

Local Government Bill

Column Number: 525

Standing Committee A

Thursday 13 February 2003


[Mr. Derek Conway in the Chair]

Local Government Bill

New Clause 10

Registered social landlords

    '(1) After section 41 of the Audit Commission Act 1998 (c.18) there is inserted—

    ''41A Inspections of registered social landlords

    (1) The Commission may carry out an inspection of—

    (a) the quality of services provided by a registered social landlord;

    (b) a registered social landlord's arrangements for securing continuous improvement in the efficiency, effectiveness and economy with which it provides services.

    (2) Where the Commission has carried out an inspection under subsection (1) it shall issue a report.

    (3) A report under subsection (2) shall mention any matter that, as a result of the inspection, the Commission considers should be drawn specifically to the attention of the Relevant Authority.

    (4) The Commission—

    (a) shall send a copy of a report under subsection (2) to the registered social landlord concerned and to the Relevant Authority;

    (b) may publish a report under subsection (2) and any information in respect of a report.

    (5) Section 11 of the Local Government Act 1999 (best value inspections under section 10: inspectors' powers and duties, and offences) shall apply for the purposes of an inspection of a registered social landlord under subsection (1) of this section as it applies for the purposes of an inspection of a best value authority under section 10 of that Act.

    (6) The Commission shall, when drawing up any programme of inspections under subsection (1), consult the Relevant Authority.

    41B Fees for inspections under section 41A

    (1) The appropriate person may by order make provision of any of the following kinds in relation to the charging of fees by the Commission in respect of inspections under section 41A(1)—

    (a) provision authorising the Commission to prescribe a scale or scales of fees in respect of inspections;

    (b) provision governing the prescribing of scales;

    (c) provision requiring a registered social landlord inspected under section 41A(1) to pay to the Commission any fee applicable to the inspection in accordance with a scale prescribed under provision of the kind mentioned in paragraph (a);

    (d) such incidental, consequential or supplementary provision as the appropriate person thinks necessary or expedient.

    (2) In subsection (1) ''the appropriate person'' means—

    (a) in relation to registered social landlords for which the Housing Corporation is the Relevant Authority, the Secretary of State, and

    (b) in relation to registered social landlords for which the National Assembly for Wales is the Relevant Authority, the Assembly.

    (3) The Secretary of State shall, before making an order under subsection (1), consult—

    (a) the Commission and the Housing Corporation, and

    (b) persons appearing to the Secretary of State to represent registered social landlords affected by his proposals.

    (4) The National Assembly for Wales shall, before making an order under subsection (1), consult—

Column Number: 526

    (a) the Commission, and

    (b) persons appearing to the Assembly to represent registered social landlords affected by its proposals.

    (5) The Commission shall, before prescribing a scale of fees that it is authorised to prescribe by an order under subsection (1) made by the Secretary of State, consult—

    (a) the Secretary of State and the Housing Corporation, and

    (b) persons appearing to the Commission to represent registered social landlords affected by its proposals.

    (6) The Commission shall, before prescribing a scale of fees that it is authorised to prescribe by an order under subsection (1) made by the National Assembly for Wales, consult—

    (a) the Assembly, and

    (b) persons appearing to the Commission to represent registered social landlords affected by its proposals.''

    (2) In section 52(1) of that Act (orders and regulations to be made by statutory instrument), after ''the Secretary of State'' there is inserted ''or the National Assembly for Wales''.

    (3) In paragraph 8(2) of Schedule 1 to that Act (categories of function in respect of which Commission must over time balance income and expenditure), after paragraph (c) there is inserted—

    ''(ca) its functions under section 41A relating to such landlords;''.

    (4) After paragraph 8 of that Schedule there is inserted—

    ''8A Each of—

    (a) the Secretary of State, and

    (b) the National Assembly for Wales,

    may make grants to the Commission in respect of expenditure incurred or to be incurred by the Commission in connection with the carryingout of its functions under section 41A.''.'.—[Mr. Raynsford.]

    Brought up, and read the First time.

8.55 am

The Minister for Local Government and the Regions (Mr. Nick Raynsford): I beg to move, That the clause be read a Second time.

The Chairman: With this it will be convenient to discuss the following:

Amendment (a),

    at the end of section 41A(1)(b) insert—

    '(c) a registered social landlord's arrangements for cooperating with local housing authorities and for responding to the differing needs of tenants and applicants for housing in different areas.'.

Amendment (b),

    at the end of section 41A(4)(b) insert—

    '(c) shall cause to be sent to each tenant of the registered social landlord a summary of the report; and

    (d) shall make available for inspection a copy of the report at such offices of the registered social landlord and within such convenient travelling distances as it determines of the tenants of the registered social landlord.'.

Amendment (c),

    in section 41A(6), after '(1)', insert—

    '(a) ensure that the demands of such inspections are proportionate to the size of the registered social landlord;

    (b) '.

Amendment (d),

    after section 41A(6) insert—

    '(7) The Commission, when undertaking an inspection under this section, shall—

    (a) consult including by holding one or more public meetings of tenants and applicants for housing in each area served by the registered social landlord about its management, efficiency, value for money and quality of service delivery; and

    (b) offer to employees of the registered social landlord the opportunity to make representations on their findings before they are finalised.'.

Column Number: 527

Amendment (e),

    in section 41B(3)(b), leave out 'the Secretary of State to represent' and insert 'be'.

Amendment (f),

    in section 41B(5)(b), leave out 'the Commission to represent' and insert 'be'.

Amendment (g),

    in section 41B(6)(b), leave out 'the Commission to represent' and insert 'be'.

Government amendments Nos. 184 to 186.

Mr. Raynsford: The amendments are the result of the Government's decision, announced last July, to establish a single inspectorate for housing in the Audit Commission. Before going into detail on the amendments, I should like to record my gratitude to the Housing Corporation and the Audit Commission. Since the announcement, they have forged a close and constructive relationship. That positive co-operation and understanding has made possible the achievement of our objective within a tight time scale.

The Government are determined to improve continuously the quality of service that social housing tenants receive from their landlords. The housing inspectorate will have the opportunity to build on the excellent inspection work of the commission and the corporation. The corporation's regulatory code is designed to ensure that housing associations focus on the needs of their tenants and customers, and improve the service that they provide to them. The commission has applied a rigorous and impressive best value inspection regime to councils since April 2000.

The new arrangements involve some change for housing associations. The corporation will remain the statutory regulator and continue to provide leadership for the housing association sector. The commission will use its expertise to focus on service delivery throughout the social housing sector. The corporation and the inspectorate will work together closely to ensure that inspection and regulatory activity are properly co-ordinated to avoid unnecessary burdens on housing associations, and to minimise the impact of the changes on social landlords.

Mr. Edward Davey (Kingston and Surbiton): The Department has given assurances in the past that the regime that is being put in place will not be a burden on the housing association sector and will not create competitive problems for it. Will the Minister ensure that the regime is monitored closely and kept under review, so that we do not end up with over-burdensome regulation?

Mr. Raynsford: The thrust of the Government's policy on inspection is to ensure that it is proportionate. The hon. Gentleman will know that the comprehensive performance assessment process relating to inspection has been developed with the commission and the close involvement of the Government. That has been designed to ensure that we focus on those areas where there is concern or a need to improve, and that there is a light touch for those

Column Number: 528

organisations that are clearly performing well. We want that broad approach to apply in relation to the housing inspectorate.

The principle is that inspections must be proportionate and must help authorities or RSLs to improve their performance, not impose unnecessary burdens. As I have said, there should be a particularly light touch for high-performing bodies. We certainly endorse that principle, and I am confident that the commission will want to put it into effect.

The inspectorate will be required to report the results of its inspections of housing associations to the corporation and to consult it about its programme of inspection. Our aim is to ensure that tenants receive uniformly high service standards, not to impose double regulation on housing associations. Inspections will be sensitive to the needs and requirements of both sides of the social housing sector, and will take account of the differences in status, structure and approach of individual local authorities and housing associations.

Transitional arrangements for the new inspectorate will take effect from 1 April this year. They will be based on section 40 of the Audit Commission Act 1998, which enables the corporation and the commission to agree programmes of comparative value-for-money studies of registered social landlords. I am grateful to the Audit Commission and the Housing Corporation for the efforts that they have made and continue to make to ensure a smooth transition. Initially, the commission will carry on the corporation's work as a going concern using the same inspection methodology applied by the same staff. Changes to the methodology after the transfer to move to a common system will be needed over time, but will be made after fully consulting those affected.

For the longer term, we need a more comprehensive and permanent basis for operating and financing the new inspectorate. That is what the Government amendments will provide. In Wales, the position is slightly different. No decision has been taken that the Audit Commission should take over inspection of housing associations there. The National Assembly recently launched a consultation exercise on the regulation of registered social landlords and will decide what inspection arrangements are appropriate for the housing associations that it regulates. Our amendments will allow the provisions to apply in Wales as well as England if the Assembly so chooses. In describing the new powers, references to the corporation should be understood to apply to the Assembly if it chooses to adopt the powers.

The substance of the amendments is contained in new clause 10, which inserts two new sections in the Audit Commission Act 1998. The first gives the commission a new power to inspect registered social landlords, and makes provision about the issuing of reports, access of inspectors to premises and information, and consultation between the commission and the Housing Corporation on a programme of inspections. The second gives the Secretary of State the power, following consultation, to make an order authorising the commission to

Column Number: 529

charge fees for inspection. That does not imply that we intend to introduce fees now. However, there are good reasons for making provision in the Bill that would permit the charging of fees after due consultation. Local authorities pay charges for inspection to the Audit Commission, and it would be anomalous if there were no possibility of charges to housing associations under a single inspection regime.

Charges help to maintain the independence of the inspector, and give the body inspected a stake in the process. A charging regime would allow associations to request additional work if they wanted to do so. I understand the anxiety that the proposal may cause, but I have already given a clear assurance, which I am happy to repeat today, to the National Housing Federation that there will be full consultation before charging is introduced. The commission is not authorised to charge fees unless and until an order is made following consultation. If such an order is made, the commission will have to consult on its proposed scale or scales of fees.


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Prepared 13 February 2003