The
Committee consisted of the following
Members:
Chairmen:
Mr.
Joe Benton,
†
Mr.
Roger Gale
†
Blackman,
Liz
(Vice-Chamberlain of Her Majesty's
Household)
Blackman-Woods,
Dr. Roberta
(City of Durham)
(Lab)
†
Brown,
Lyn
(West Ham) (Lab)
†
Burt,
Alistair
(North-East Bedfordshire)
(Con)
†
George,
Andrew
(St. Ives)
(LD)
†
Gwynne,
Andrew
(Denton and Reddish)
(Lab)
†
Holmes,
Paul
(Chesterfield)
(LD)
Hurd,
Mr. Nick
(Ruislip-Northwood)
(Con)
†
Love,
Mr. Andrew
(Edmonton)
(Lab/Co-op)
†
Moran,
Margaret
(Luton, South)
(Lab)
†
Raynsford,
Mr. Nick
(Greenwich and Woolwich)
(Lab)
†
Shapps,
Grant
(Welwyn Hatfield)
(Con)
†
Slaughter,
Mr. Andy
(Ealing, Acton and Shepherd's Bush)
(Lab)
†
Smith,
Ms Angela C.
(Sheffield, Hillsborough)
(Lab)
†
Syms,
Mr. Robert
(Poole)
(Con)
†
Wright,
Mr. Iain
(Parliamentary Under-Secretary of State for
Communities and Local
Government)
†
Young,
Sir George
(North-West Hampshire)
(Con)
Hannah Weston, Committee
Clerk
† attended the
Committee
Witnesses
Adam
Sampson, Chief Executive,
Shelter
Caroline
Davey, Community Policy and Campaigns,
Shelter
Lord
Best
Yvette Cooper MP,
Minister for
Housing
Iain
Wright MP, Parliamentary Under-Secretary of State for Communities
and Local
Government
Philip
Cox, Homes and Communities Agency
Implementation
Team
Anne
Kirkman, Housing Finance and Mixed Communities
Division
,
Decent
Homes
Peter
Ruback, Affordable Housing Division, Department
for
Communities and Local
Government
Public
Bill Committee
Thursday
13 December
2007
(Afternoon)
[Mr. Roger
Gale
in the
Chair]
Housing and Regeneration Bill
1
pm
The
Committee deliberated in
private.
1.6
pm
On
resuming—
The
Chairman:
Order. For the benefit of
those beyond the Bar and outside the Committee Room, I need to set down
the ground rules again. First, welcome and thank you for joining us
this afternoon. Slightly discourteously, we remain seated, because if
we do not, we are off the microphones and not only
Hansard but
those listening on the webcast cannot hear us, so if you would be kind
enough to remain seated, as I am, that would be helpful. Secondly,
owing to the programme motion, by which we are bound, the evidence
session has to finish at 1.45 pm—mid-sentence or no. That may
seem extraordinarily rude—it probably is—but that is the
way it
works.
We
welcome this afternoon Adam Sampson, the chief executive of Shelter,
and Caroline Davey, deputy director of community policy and campaigns
at Shelter. The Chairman does not normally involve himself in the
proceedings, but I shall ask whether either of you would like to make a
brief—I emphasise brief—opening statement before we go
into the line of questioning from our parliamentary colleagues. The
Floor is yours.
Adam
Sampson:
I shall be brief. First,
thank you for inviting us; it is a good opportunity for us to put our
views forward. Generally, we support the Bill and consider most of the
measures to be entirely appropriate. Although there may be some issues
about drafting in one or two places, generally we support the vast
majority of measures. One or two individual measures can be
strengthened, and, inevitably, we would not be Shelter unless we had a
shopping list of other demands that we wish to see in the Bill.
However, we are conscious of the need to move swiftly to enact the
legislation and not to delay matters. In our judgment, it is imperative
that the Government accelerate their programme of social house
building, and the Bill is a key step towards that, so we are anxious
not to delay its passage by bringing forward lots of extraneous
amendments, no matter how important they may individually appear to us.
We say that in the hope that there will be other opportunities for
housing legislation within the lifetime of this
Government.
Q
152152
Andrew
George (St. Ives) (LD): That is a very good entrĂ(c)e
to my question. Given that we have a decent amount of
time—although looking at it from the Opposition perspective, not
enough—in which to bring forward constructive amendments, and
given that you have said that the Bill could be strengthened in several
areas, what would be the top two on your wish list of changes either to
add to or to subtract from the Bill?
Adam
Sampson:
There are several. If you are asking us to
narrow them down to two, the first is to include in the legislation a
definition of overcrowding. Yesterday, the Minister for Housing, in a
very welcome way, committed the Government to move towards the bedroom
standard on overcrowding, which is the fulfilment of a promise that was
made for a new standard during the passage of the Housing Act 2004. It
has taken three years for the Government even to indicate what the new
standard will be. We have absolutely no doubt about Ministers’
commitments to reaching a bedroom standard, but we recognise that there
will inevitably be timetable issues about how quickly that standard can
be embodied, as it has taken three years for the Government even to
give an indication of what the new standard will be. In view of the
time it has taken, we are sufficiently nervous about the historical
delay to think it would be extremely helpful if the ministerial
commitment given in the speech yesterday were included in legislation.
Yesterday’s announcement of a review into the private rented
sector means that we will not be pushing for anything further on that
sector.
Secondly,
I want to push for changes in the right-to-buy
legislation, although my colleague may disagree. Many areas would
benefit from a reduction in the maximum right-to-buy discount, in
particular council housing in designated areas with less than 3,000
inhabitants should be exempted from the right to buy. There is a
problem because of the almost total disappearance of council housing
from small rural communities, and it would be relatively simple to stem
that haemorrhage by exempting small local communities from the right to
buy. I would prioritise those two measures.
Q
153
Andrew
George:
You have said that the announcement of a review
into the private rented sector was sufficient for you to believe that
it would not be necessary to amend the Bill to bring the private sector
within the proposed regulations for registered social landlords. Is
that sustainable in the long run, given the amount of casework that
Shelter deals with, especially in respect of the private rented sector?
Do you accept that, provided that it does not scare off the private
rented sector and is proportionate and appropriate, there is scope for
the application of some of the regulations to the private
sector?
Adam
Sampson:
It would
certainly be helpful in considering the role of a regulator if the
framing of those regulations were sufficiently flexible to allow the
private rented sector to be brought under the ambit of that regulator
at a future time. However, I do not want to anticipate the outcome of a
full review of the private rented sector. Shelter’s preferred
option is to have far greater regulation of the private rented sector,
and no one should be in any doubt about that. However, regulation needs
to be married with a package of incentives to encourage the further
development and professionalisation of the private rented sector. I
would not want to move swiftly to regulation without understanding the
package of incentives for decent landlords to remain in the sector.
Yes, frame the powers of the regulator sufficiently so that they can in
future be applied to the private rented sector too, if that is seen as
necessary and desirable, but postpone any decision on whether to do
that until the out-turn of the review of that
sector.
Q
154
Lyn
Brown (West Ham) (Lab): Was it Shelter that advocated
placing good private rented landlords in a different tax framework,
which you felt might offer some
incentives?
Adam
Sampson:
A few years ago, Shelter, with the Joseph
Rowntree Foundation and some of the landlord bodies, put together a
commission on the private rented sector, which concluded that, by
changing the tax regime for private landlords to make being a private
landlord a business as opposed to something different, there would be
incentives for landlords that would allow them to accept greater
regulation. There was a trade-off, which the landlords we talked to
were willing to accept. We still think that that idea has considerable
potential, but we want it to be approached sensitively and properly as
a package, rather than rushing into one side without looking at the
other.
Q
155
Sir
George Young (North-West Hampshire) (Con): A quick
supplementary question, just to clarify where Shelter is coming from on
the regulation of the private rented sector. Are you arguing for
controlled rents and security of
tenure?
Adam
Sampson:
We are not at this stage, no. Security of
tenure is a profoundly interesting issue. At the moment, one matter
that really concerns us is the disjunction between the rights of
similar groups of people trying to secure social housing. If you manage
to get through the homelessness application route, for example, and be
accepted as homeless, if you are not fobbed off at an earlier stage,
you will end up having lifetime security of tenure and regulated rents.
If you do not manage to negotiate those hurdles, you end up in the
private rented sector with unregulated rents and only six
months’ security of
tenure.
It seems to us
that the two sectors need to be brought closer together. How to do
that, whether through rent regulation and legal extensions to security
of tenure in the private rented sector or through a package of
incentives and managing the market, is precisely the sort of stuff that
the review of the private rented sector needs to
determine.
The
Chairman:
Order. Mr. George still has the
driving seat, but I assume that all the Members who are indicating that
they wish to contribute are pursuing the same line of questioning. If
not, please
wait.
Q
156
Mr.
Andrew Love (Edmonton) (Lab/Co-op): There was
disappointment about the narrow definition of houses in multiple
occupation in the Housing Act 2004. Is that a matter that you would
like to be taken up in the
Bill?
Adam
Sampson:
If there were time within the Bill to extend
the definition of houses in multiple occupation, we would certainly
support it. We have all the briefings and potential amendments from
three years ago ready to go, so believe me, if there were an
opportunity to do that, we would support
it.
Q
157
Margaret
Moran (Luton, South) (Lab): You will be aware that the
report of the Law Commission on tenancy conditions addresses a
long-standing issue. Do you see any scope in the Bill for examining
mechanisms that might enable us to move forward on that? Is it
something that you will be pursuing?
Adam
Sampson:
That relates to our general strategic
approach to the Bill and the broader housing reform context. Our sense
is that, while those measures are important and to a degree attractive,
although we have some detailed disagreements on some of the
report’s conclusions, it would be better, on the assumption that
there is every likelihood of a second housing Bill in this Parliament,
to hold back fundamental reforms of that nature for a second Bill. They
could be taken forward simultaneously with any changes following the
Hills report or the outcome of the private rented sector commission,
and we could do the whole thing as a package rather than implementing
fundamental reforms in a piecemeal way, as you are
suggesting.
Q
158
Mr.
Andy Slaughter (Ealing, Acton and Shepherd's Bush) (Lab):
I am concerned by what you have said. I was not going to ask a
question—I normally agree with what you say, Mr.
Sampson—but you have just said that you believe that the two
types of tenure, public housing and private rented housing, should come
closer together. There have been bits of nibbling away at security of
tenure in the public and RSL sector, and there are rumours, including
in the context of the Bill, that that may continue. Could you make
clear Shelter’s position on that? I hope that it is that you
support secure tenancies and assured tenancies, in so far as they give
that level of
protection.
The
Chairman:
Order. Just before you reply, I ask Members to
bear in mind that these microphones are not always quite as directional
as they might be. It would help
Hansard if you could speak up
just a
little.
Adam
Sampson:
For ease of reference, Shelter would oppose
root and branch any proposition to water down the existing security of
tenure arrangements in social
housing.
Q
159
Mr.
Slaughter:
So, when you say “move together”,
you mean private rented moving further
towards—
Adam
Sampson:
Our aim is to improve the quality of
security of tenure and management standards in the private housing
market, but should that be done by regulation or by a judicious package
of incentives? It is interesting to note that if you look at the higher
end of private renting, many landlords are anxious to offer longer-term
security of tenure to their tenants, because it guarantees good rental
streams. It is by no means an assumption that it is in the
landlord’s interest to have very short-term tenure with a
constant churn of
tenants.
The
Chairman:
Ms Davey, you have been very patient. Is there
anything that you would like to add before Mr. George picks
up another point that was raised in Mr. Sampson’s
opening
remarks?
Caroline
Davey:
No.
1.15
pm
Q
160
Andrew
George:
One further point that you raised in your opening
remarks was that there should be a restriction on the discounts
available through the right-to-buy mechanism. That is something that I
would support. If that were to happen, there is still a need for the
development of an intermediate market.
Has Shelter taken a view on the need to create, invest and enable an
intermediate market? Is there any mechanism within the Bill to
strengthen that opportunity, as an alternative to bringing social
housing into the private sector in the way that the right to buy
allows?
Adam
Sampson:
There is nothing that we are suggesting of
that nature at this point. [Interruption.] It is interesting. I
am looking at my colleague, because I now cannot answer the question.
[Interruption.] No, there is nothing that we are suggesting in
that
respect.
Q
161
Grant
Shapps (Welwyn Hatfield) (Con): Clause 69 attempts to
define low-cost home ownership, and it is a confusing clause. The
Minister has already hinted that it may be amended. The concern is that
the definitions might introduce a means test into the process. Is that
concern shared by
Shelter?
Caroline
Davey:
Do you mean the definition of low-cost home
ownership or of social
housing?
Grant
Shapps:
Both. Low-cost home ownership is defined in clause
69, but there is also wider concern in the Bill about whether there is
an attempt to redefine access to social housing, and what the
difference is between social and affordable
housing.
Caroline
Davey:
We took a view from our head solicitor, who
said that, in practice, this clause is not very different from the
existing situation. On that advice, we are not particularly concerned
about means-testing or the definition of social housing. On low-cost
home ownership, it is a clarification of a situation that already
exists.
Adam
Sampson:
There are some questions about the precise
definition of rules of eligibility in clause 68. It may be that some
greater specificity around precisely what that means would be helpful
because this could be a loose concept or something more specific, and
it would be interesting to know what is precisely meant by that.
Generally, my colleague is right. The advice that we have had from our
housing solicitors, who are extremely well qualified in this area, is
that there is little here that changes the situation that heretofore
applied in
councils.
Q
162
Grant
Shapps:
Are you concerned that
the Bill may inadvertently or otherwise try to redefine different types
of social and affordable housing? Some groups raised that concern on
First Reading. Their worry was that the housing market has only just
got used to the definitions of social housing and affordable housing.
Mixing up the two definitions could create complications in the field.
Does that worry
you?
Adam
Sampson:
Our in-house solicitors are not
concerned about that matter. We have asked them, and they say that this
is merely restating in slightly different words the existing
arrangements and
definitions.
Q
163
Mr.
Nick Raynsford (Greenwich and Woolwich) (Lab): I want to
take a slightly wider look at the whole question of the intermediate
market and low-cost home ownership. You have rightly highlighted the
problems facing people who want access to social housing, the shortages
and the long waiting lists. You have also
highlighted the extent to which people who might like to buy are unable
to do so at the moment because of affordability issues. So there is
potentially a huge demand for the intermediate market. Why, in your
experience, have all the various models that have been tried over the
past 20 years—the different low-cost home ownership
initiatives—failed to produce something that is popular,
successful and taken up on the scale that you might expect, given the
demand?
Adam
Sampson:
When I first started in this job—my
career up to this point was not in housing—I was invited to be
on the home ownership taskforce and to chair its user group. This was
three or four years ago. As a preparation for that I sat and read
through the various low-cost home ownership products available
then—they have since proliferated further. At the time, there
were 38 such products. At one point in my career, I was an Oxford
academic, yet I could not understand the vast majority of the products
as described.
There
is certainly a marketing problem. It is very difficult as a consumer to
understand what it is you are being sold and its implications. When the
taskforce tested the impact of those products on consumers, the
consumer view of the worth to them of some of those products was by no
means complimentary. Some of the best established of them, such as
shared ownership, were reasonably unpopular with many consumers who saw
them as a very bad deal because, for example, even though you owned
only 50 per cent. of the equity of your house, you had 100 per cent. of
the upkeep and repair
obligations.
You
should add to that the fact that we do not yet have an adequate market
in many of these products, so it is difficult to sell on. The
proliferation of products means that it is difficult to know where you
go to get any one of them, so you have a very unsatisfactory situation.
So the problem is caused by a combination of poor product design from a
consumer point of view, poor marketing and selling of the products and
a bewildering proliferation of products with the absence of an
effective
market.
Q
164
Mr.
Raynsford:
What is to be done to remedy
that?
Adam
Sampson:
It is partly about simplification. One of
the recommendations that came out of the home ownership taskforce was
about simplification. We need fewer, better products, not an increasing
number of products. It is also about a single point of marketing and
sale. Those two things seem to be the keys from that taskforce’s
point of view. Nothing that I have seen in the past two or three years
has changed my
view.
Mr.
Raynsford:
Except that the Government
introduced the home buy scheme with exactly the objective of
simplifying the system and having a single point of sale, but take-up
has been
derisory.
Adam
Sampson:
Indeed, it has. The market is speaking.
Consumers do not necessarily want these products, no matter how much we
want them to want them.
Q
165
Paul
Holmes (Chesterfield) (LD): Returning to clauses 67 to 69
and the definition of low-cost housing to buy and low-cost housing to
rent, many organisations have expressed concern. The National Housing
Federation has suggested that if you change the definition of low-cost
rental in clause 68 from
“occupied by people who cannot
afford to buy or rent at market
rate”
to
“let to” such people, it would still allow the
means-testing of those who should have access to such property, but it
would rule out means-testing people once they are in the property. You
could not move them on, because their living standards improve. The
Minister wrote to everyone who spoke on Second Reading to say that that
was not the intention. However, many people have pointed out that, if
it is there in statute, someone in the future could use it in that way,
even if that is not intended by current Ministers. Do you not see any
potential problem in the wording as it is
drafted?
1.30pm
Adam
Sampson:
All I can say is that our head solicitor,
who is an acknowledged expert in housing law, has advised us that he
sees little risk in it. That advice may be different from that which
many others have
received.
Q
166
Paul
Holmes:
The background, in the last few months and the
early part of this year, is that a think tank loosely associated with
one party and an internal policy review associated with another party
have come up with arguments that we should, indeed, be moving be people
out of rented social housing once their income reaches a certain
level.
Adam
Sampson:
That is part of what Mr.
Slaughter was hinting
at.
While we
understand the arguments, particularly given constrained supply, to
ensure that social housing is used only for people who have no other
recourse to housing; equally, going down that line would be a very
worrying development, not least because it would introduce perverse
incentives for people to keep their income levels low to retain social
housing. It also militates against the desire for mixed communities,
where there are different income levels within the same geographical
neighbourhood. Much as we want many of our new communities to be mixed,
as John Hills pointed out, on the vast majority of existing housing
estates, social housing will remain for decades to
come.
Q
167
The
Parliamentary Under-Secretary of State for Communities and Local
Government (Mr. Iain Wright):
To take up the
issue raised by Grant Shapps, I am concerned that people would
misinterpret that as means testing for entry into social housing.
Crucially, as Paul Holmes pointed out, if someone got beyond a certain
level of social income, they could be kicked out of social housing, but
that is certainly not the Government’s intention. As has been
mentioned, I have written to hon. Members who contributed on Second
Reading. I am very much minded to table amendments to clarify this
matter. I am reassured by your legal advice, but I would welcome any
further advice that you can provide as to how we can tighten the
provision.
Clause
67(2) states that social housing which is classified as social housing
now will remain as such. That is very important. I think that clause
71(2) will require amendment, as it covers social housing provided
for
“the needs of a
group whose needs are not adequately served by the commercial housing
market”,
even if they could afford a market rent.
Hon. Members could mention more, but three groups spring to mind
immediately: older people, people with disabilities with specific
needs, and people with larger families—we have already talked
about overcrowding. I am minded to table amendments to avoid any doubt
about whom the provision covers. Any help or suggestions that you can
provide will be most
welcome.
Adam
Sampson:
We will certainly take that back to our
chief solicitor. It is probably worth quoting the current legislation,
for ease of reference, which states that councils are permitted to take
account of
“the financial
resources available to a person to meet his housing
costs”
in determining
priorities under allocation schemes. In other words, local authorities
already have powers to look at people’s income levels. That is
the basis of our
opinion.
Q
168
Mr.
Wright:
I will make two points, the first of which I
mentioned the first on Second Reading. I am concerned that rationing
takes place because of the relatively low supply of social housing.
That takes us back to the central point of the Bill, which is that we
need more homes and more social houses. That is absolutely
essential.
My second
point has been raised by Mr. Sampson. To promote mixed,
vital, sustainable communities as much as possible, we need people with
higher incomes in social housing. It happened in the 1950s and
’60s. Mixed tenure is very important in regenerating and
sustaining communities.
Q
169
Paul
Holmes:
I want to pick up that point. The definition to
which you refer would deal with entry to low-cost rent, and there is de
facto rationing as a result of shortages. However, that does not deal
with the threat to move people out once their income has
increased.
Adam
Sampson:
If the Minister is willing to consider
amendments, I will certainly take the issue back to our chief
solicitor. I am happy to give whatever help I can on behalf of Shelter
by coming back with a legal formula that will deal with those
dangers.
Q
170
Sir
George Young:
I would like to press you a little further
on security of tenure, which has been raised several times. Nobody
wants to deprive people of their tenure because their circumstances
have changed but, in cases where somebody’s circumstances have
improved, would Shelter have anything against bringing to their
attention alternative means of moving out, to free up accommodation for
those who are on the waiting list and need
it?
Adam
Sampson:
Absolutely not. We have no objection to
that—indeed, we think that it would be a very positive
development. However, we need to distinguish between housing options
that offer a menu of choices from which consumers can select what they
regard as their best choice and something in which a landlord or a
local authority determines what is best for that individual. In other
words, the principle behind this must be
consumer choice with a package of incentives, rather than a local
authority saying, “You are too well off for social housing so we
are going to kick you
out.”
Q
171
Mr.
Slaughter:
We are getting a useful clarification on the
matter—I am not entirely sure, however, about the reference that
Mr. Holmes made to Conservative party policy review in the
summer—so that everybody is on all fours regarding security of
tenure, permanency and the ability to remain.
I agree entirely with what you
said about communities and ensuring that people are not going to be
without social housing. Nevertheless, people do move about, and the
right to buy has perversely destroyed some of those mixed communities
and created a great shortage of affordable housing, so dealing with
rationing is an even greater priority. Is Shelter seriously saying,
even under the Bill, the limited social housing that is available
should be spread across income bands, rather than prioritised for
allocation to those who are most in need?
Adam
Sampson:
That is a hook on which Shelter plainly
wriggles, as indeed does everybody else. As an organisation that
regards itself as representing the poorest and the most vulnerable, of
course we would wish to prioritise access to housing for those most in
need. Nevertheless, the consequence of channelling only those in most
need into a limited slot of social housing, which is not geographically
dispersed but concentrated in small areas, increases the risk of
concentrations of deprivation. The aggregation of many individual
decisions to help individual people in desperate need forces those
individuals to live in places in which none of us would wish to live.
Inevitably, the mixed communities agenda has to have an element of
priority, and much as we worry about penalising people in desperate
need by moving towards a mixed communities agenda, that must be done in
the interests of ensuring that those estates are decent places to live
in.
Grant
Shapps:
I could not hear everything that Andy Slaughter
said. He made a reference to Conservative party policy on fixed tenure
from the summer, and I am not clear what it was
about.
The
Chairman:
Order. Is this related to our
discussion?
Q
172
Grant
Shapps:
Partly, because I cannot hear the whole
conversation, which is a matter for the Chair.
On the issue of tenure and
beyond, what is the balance for Shelter? Clearly, there is a
conflict—you alluded to it—between security of tenure and
enabling those in housing stock to be sufficiently mobile to keep the
social housing system working. Could you talk us through that a bit
more?
Adam
Sampson:
This has largely been a covert debate about
security of tenure, but at last—and this is helpful—it is
becoming an overt debate about the subject. A number of arguments have
been made to justify the watering down the existing security
arrangements. We do not believe that those arguments stand up. First,
it is said that people coming into social housing, particularly
through the homelessness route, merely experience a temporary period of
instability: all they need is to be stabilised so that they will have
the personal and economic resources to move out of social housing.
Although we believe that that might be true for some individuals, if
you analyse the range of people who live in social housing, you will
see that it is not always true. The vast majority of those in social
housing are very poor, and many of them have multiple needs, making it
very difficult for them to survive in the private rented sector with
six-month security of tenure and so on. Average income levels are about
£7,500 a year. Less than 5 per cent. of people living in social
housing earn more than £30,000 a year. Those are the sorts of
people in social housing. They could not easily survive economically,
or in other respects, in other housing
settings.
Another
argument is sometimes made about a culture of dependency, and the Hills
report can be interpreted in that way. However, the truth is that if,
owing to the fact that we have not built sufficient housing stock, we
place people with high support needs in estates with concentrations of
deprivation, we cannot blame them for living in a place that does not
provide them with the chances and support that they need to build
decent lives. We argue strongly that it is wrong to attack security of
tenure in social housing. We do not believe that there are coherent
arguments for doing
so.
Q
173
Ms
Angela C. Smith (Sheffield, Hillsborough) (Lab): I want to
challenge the usual understanding of housing needs. The conventional
use of the term “homelessness” applied by local
authorities relates to those in the direst need. Divorcees,
particularly fathers, often require access to their children and a
place for them to come and stay. Do you agree that if such a person
were to have their house repossessed—they may have lost their
job or had debt problems, for example—they too would be in
serious need and could, in a more liberal society, be classed as
homeless?
The
Chairman:
That was a big question, but we need a brief
answer, I am afraid, Mr.
Sampson.
Caroline
Davey:
It might be useful to mention that we are very
supportive of the proposed Homes and Communities Agency, but we think
that one useful addition could be made to its remit: an assessment of
housing need, particularly social housing need. No one is currently
responsible for such an assessment. Shelter does its own research, but
we would be very happy to hand over the baton to an official body so
that it can undertake an assessment and look at the wider housing need
and how best to provide for
it.
Q
174
Ms
Smith:
That could help to create mixed communities as
well.
Caroline
Davey:
Absolutely.
The
Chairman:
Thank you very much for joining us,
Mr. Sampson and Miss Davey. The
Hansard report of
these proceedings will be available within a couple of days. If, having
read it, you wish to add anything, please feel free to put it in
writing. The Committee will be most pleased to hear from you
further.
1.45
pm
Sir
George Young:
On a point of order, Mr. Gale.
The witnesses referred twice to a speech that the Minister for Housing
made yesterday, which was obviously important. Could Committee Members
have a copy of
it?
The
Chairman:
Order. That issue is not a matter for the Chair.
It is open to the Under-Secretary to make any papers available to the
Committee that he believes are
relevant.
Mr.
Wright:
Further to that point of order, Mr.
Gale. May I suggest that the Minister for Housing, who is to give
evidence to the Committee in about three quarters of an hour, could,
with your permission, make reference to the speech as part of her
opening address? We would then provide copies of the
speech.
The
Chairman:
That would be fine, if we had not already
briefed the Minister that she will not be invited to make an opening
remark. However, I am sure that she will find a way of dealing with the
matter.
Good
afternoon, Lord Best. Thank you for joining us. We have until 2.30 pm,
when the knife falls, discourteously or otherwise. I invite you to make
any opening remarks that you wish to make before I invite members of
the Committee to put questions to
you.
Lord
Best:
I listened to the speech of the Minister for
Housing yesterday, so I might introduce some of the points that she
made.
The
Chairman:
Please feel free to do so, but if you wish to
make some brief opening remarks, we would be pleased to hear
them.
Lord
Best:
Absolutely. Like more or less everybody to do
with housing, I welcome the Bill and think that it is important. I must
admit that I was a sceptic for quite a long time as to whether it was
really necessary to create the new Homes and Communities Agency and
whether that would not cause an awful lot of disruption, redundancies
and all the hassle that comes with creating a new body. I have also
been an admirer of the way in which the Housing Corporation, combining
regulation and funding, has managed to make sure that housing
associations are never guilty of corruption or mismanagement of any
consequence and never lose a penny for any of those private investors,
over all these years. I was a bit worried that separating those
functions was not going to be helpful in the great scheme of
things.
However, I
have come to the view that this is the moment for a change. Joining up
the different parts of government that deal with the delivery of new
homes and the regeneration of old places is an enormous task, and they
have an £8 billion budget. It is better that they are in one
place. I accept that putting regulation somewhere separate probably
gives it a bigger role. It would have been difficult to accomplish,
with all the complexities nowadays of regulating different kinds of
agencies, rather than just the old-fashioned standard housing
association.
These are
probably good moves, and having walked round the issue quite a few
times, I think that this is good stuff. It is psychologically and
symbolically good
for Government to say that there will be a new Bill, new agencies, and a
new era, and that they are going to go for it. I think that that is
worth
having.
Q
175
Lyn
Brown:
Do you think that there is anything missing from
the Bill? Are there any big missed opportunities that you think could
be considered at this late
stage?
Lord
Best:
Thank you for that question. I think that there
is a sin of omission, and I notice that Shelter picked up on this. This
is the moment to bring in some regulation for the private rented
sector. It is a huge elephant standing there. We now have dozens of
schemes in which there is private renting next door to social
housing—literally next door. The owner of the private rented
accommodation is increasingly likely to be a taxi driver who owns one
flat in Brighton or a very, very small
company.
The
buy-to-let market, which has borrowed £120 billion,
is a huge phenomenon. Great, we have had all of this massive
investment, but we have a tangle of amateur and often speculative
landlords mixed in with some complete rascals. We all know that the
worst landlords are some of the most unpleasant people. I was wrongly
quoted as saying that most landlords were drug dealers. That is not
what I said, but I did say that most drug dealers are landlords,
because that is the best place for a drug dealer to put their money.
Nobody asks any questions and you can put your addicts in
there.
We have a very
scruffy bottom end of the market, but even among perfectly respectable
people, we have a bunch of absolute amateurs next door to organisations
that have to deal with regulation by the Housing Corporation, Audit
Commission inspectors and an excellent housing ombudsman service. There
is all that paraphernalia, and the Bill is talking about refining and
finessing and even more regulation. Fine, I am all for that, but then
we have the wild west—the private rented sector with no
regulation. There are now rules to deal with the standard of the
accommodation, but whether they are implemented is another matter. With
regard to the management and the landlords, we do not have any
regulation or redress. You can complain that no one has answered your
letter and can go on sending that letter, but no one will do anything.
The tenant’s only recourse is to take the landlord to court, and
how many people are able to do that? We have got to have some
regulation, as this is the last outpost where there is
none.
Q
176
Alistair
Burt (North-East Bedfordshire) (Con): May I take you back
to your opening statement, in which you said that you began as a
sceptic about the concept of the agency because of the difficulties of
disruption, but had been won over? You may still remain a sceptic in
relation to delivery because the record of the past 10 years has been
pretty woeful. You painted a picture of a really rosy future in which
everything was somehow going to come right under the new agency. What,
in particular, gives you the confidence that this new vehicle can
deliver after 10 years of
failure?
Lord
Best:
I would say that those 10 years have been a
mixed story, rather than an abject failure. But yes, it is sure that
there will be lots of problems along the way and this new agency will
not have any plain sailing. We
are moving into an era in which the market is definitely taking a
downturn. We are dependent on the market for so much of what we do,
which makes it all the more important that we have other agencies apart
from house builders, as they will only produce when there is a profit
to be made from selling the houses. If we are in a time when there is a
credit squeeze and difficulty with mortgages, and in which prices might
be falling, we will have to depend instead on the other lot—the
RSLs and the housing associations.
Building prices have gone up by
14 per cent. in a year, it is difficult to squeeze things out, and
planning difficulties are not yet solved, so although the Planning Bill
will certainly help, I absolutely agree that hitting a target of 3
million homes by 2020 is a big call. John Calcutt’s review
stated that the industry could do it, but whether it wants to is
another matter, because it responds only to the market, and that is a
second consideration. There might be some cajoling and a need for that
other stream of housing to be much bigger than it has been—the
bit that is not propelled entirely by what the market
says.
Q
177
Alistair
Burt:
Interestingly, you echo some of the comments made
this morning by the representatives of the Campaign to Protect Rural
England, who fell into a discussion with Nick Raynsford about whether
those targets could be delivered. The homes have to be built and the
house builders are not going to do it because of a downturn in the
market. If everything is getting tighter, with the best will in the
world, it might not be delivered, whatever an agency says or whatever
the latest 10-year plan for housing is. Just because the agency has
been created and the Government say what they will do, should there
really be any confidence that that will happen, because many other
things will affect the
delivery?
Lord
Best:
It certainly will not happen automatically just
because you have a great big agency, that is for sure, even with the
public money for the 70,000 homes a year that could be afforded if
everything worked right. We are told by the economic pundits that the
economic downturn is not a major recession and looks like a trough from
which recovery is still possible, so we have to be prepared and get our
standards and ourselves in place for an upsurge. Fortunately, the
timetable—we get milestones such as 2016 and 2020—is not
inconceivable. I hope that we can get our 3 million by 2020, but next
year is not going to be the best year, and the year after that is not
going to be the second-best year either.
Q
178
Andrew
George:
In your comments to the Communities and Local
Government Committee, you expressed concern about the quality of the
housing that might be provided under this type of regulation. Let us
suppose that you were to hit the 3 million target. Under clause 35, the
HCA’s duties are to ensure that the recipient of financial
subsidy is the landlord of the housing provided. There is no question
about quality and standards. How can the Bill be strengthened to ensure
that it does not result in a driving down of housing standards and
quality for those who are desperate for accommodation, but not so
desperate that they should receive substandard accommodation?
Lord
Best:
We cannot write all the standards in the Bill.
Pushing up standards will be very much part of the HCA’s duties.
The most difficult thing for the agency and society at large will
probably be to produce family homes rather than the small flats that we
are used to seeing. If we keep talking about 3 million homes and they
turn out to be 3 million one or two-bedroomed flats, it will be a
complete failure. We are running out of single, childless, mobile,
young, yuppyish people who can fill the flats and thus getting
increasingly into a backlog in which we need actual family homes.
Perhaps if we can house a few older people and make the retirement
package good enough, we will get back a lot of suburban three-bedroomed
houses with gardens, but we must build family
homes.
Although I am
guilty of it, we must stop talking about 3 million homes. We need to
start talking about 9 million people. It is the number of people whom
we house that matters, a lot of whom will be children. In many
continental countries, they talk about people and square metres. There
are targets on square metres and the numbers of people. We have
units—just one figure. That will not work. Ministers will have
to feel proud of the number of people housed instead of just the number
of units and
homes.
Q
179
Andrew
George:
If some developments are provided through the
quota scheme—with private developers allowing a proportion of
the properties to be made available to RSLs—rather than through
exception sites for which we can insist on 100 per cent. and the social
landlord is engaged from day one, those properties will be the smaller
and less acceptable, or those built on the edge of a busy highway and
the swampy bit at the bottom of the site that private owners would not
want. I accept that this is blurring the planning and the housing
provision side of government, but do you not think that there is a need
for stronger regulation in the Bill to ensure that that is not one of
the outcomes and that we do not end up with ticky-tacky boxes in the
worst sites on the edge of
developments?
Lord
Best:
These are mixed developments in which all the
decent stuff is over here, while the social and affordable housing is
planted in the corner near the gasworks, which is the real rubbish and
where the units are too small anyway. Everyone is becoming cleverer
about such matters and the deal under section 106 specifies
increasingly that people do not get the worse end of the deal. At
present, when you are piggy-backing on what the house builder wants to
do, the RSL and housing association is playing second fiddle,
especially in those areas where, unwisely, a beauty parade is allowed
so that the house builder can choose the softest touch—the one
that will be most compliant with what he wants. You can then end up
with some pretty rubbishy results for affordable
housing.
I much prefer
the model of the housing association, possibly with considerable
support through a local housing company that involves the local
authority. New local housing companies will be set up. It will not be
the house builder making all the running with others piggy-backing on
him. The RSL, the local housing company or the agency itself will
specify in a master plan what will happen. The house builder will then
do the things that house builders do best and build houses
for sale, but as part of someone else’s plan, not as the person
leading the show. They will not hang around very long or be there to
manage the property for the next 30 years.
There are people who will be
around for 30, 50, or even 100 years. I have run organisations that are
more than 100 years old and are still looking after properties that
were built 100 years ago. If you are going to be in the sector for 100
years, you do not want the people who are just there today, and who
will sell the property and go, to run at the beginning the planning
process and also the quality and standards. You want them to do their
job, but for the real control to be in the hands of the long-term
agent.
2
pm
Q
180
Ms
Smith:
Having been involved in a process in which the
housing association and the local authority came first, I completely
endorse what you have just said.
The context of this discussion
is our belief that we still have underlying housing demand that will
effectively mean that delivery of the new housing will be a top
priority, despite any problems in the next two years. First, do you not
think that land constraint has been a significant factor in our
inability to deliver large numbers of new housing units so far, and
that the new requirement on local authorities to identify land supply
is a useful tool? Secondly, regarding retirement, would it not be
useful to develop a new culture in this country whereby older people
see moving back into the rented sector from home ownership as a
positive move that allows them to enjoy their equity while making more
housing available in the market for other people to buy? That would not
necessarily mean moving them into sheltered housing or very small
one-bedroom flats.
Lord
Best:
Yes. Those are two separate and important
points. Land is absolutely the key. Who controls the land always wins
in the long run, and the private sector has had a pretty good run of
controlling land supply.
I am very familiar with the
scene around York. It has been extraordinarily difficult for even the
Joseph Rowntree Foundation to acquire land. I ran the Joseph Rowntree
Housing Trust. Frankly, at Rowntree, we have pots of money, but buying
any land, with options already sold and deals already done, is pretty
well sewn up around York. Getting your hands on any sites in order to
lead the process has proved to be incredibly difficult. Rowntree is, in
fact, developing a large site on local authority land.
So, it is about unlocking the
public sector land; for sure, we need to be cleverer about that.
Sometimes the public sector is extremely slow in bringing the land
forward and extremely hard on the price, which militates against doing
something socially worth while with that land. Getting the land is
absolutely critical and I think that the Bill—especially some of
its planning provisions—will be helpful in doing that. You are
so right; land is the secret.
Regarding retirement, yes,
people should possibly move back to being tenants having been home
owners for 35 years, or whatever period it might be. I chair the
Hanover Housing Association, which provides retirement housing all over
the country. We are looking to see what the next big thing is. We are
the largest
provider of extra-care housing. Obviously, extra care is a fantastic
product and there are always queues for such housing, but I do not
think that the old-fashioned sheltered housing will suit in the future.
We must have a retirement offer that is better than we have had before.
The biggest target
for who is going to move into retirement housing is no longer the
under-occupying council tenant—although they still exist, and
creating mobility within the social housing sector is great—but
the under-occupying owner, who might not be very rich at all. Enticing
them to leave the three-bedroom suburban house is a huge prize, because
that would produce the family housing that the house builders are so
reluctant to build, because they make more money out of one and
two-bedroom flats. So, you are absolutely right.
I would not go the whole way,
though, and say, “We welcome you.” We do at the moment at
Hanover; 25 per cent. of the people who move in have sold their house.
Actually, though, at Hanover, I want to get my hands on some of the
money that those people have got from selling their property. Although
it is nice that they want to give something to the kids and all that, I
also think that we should have a shared ownership product for them,
which would put at least a chunk of the money that they have received
from their sale back into housing, where it is perfectly safe. That
would be good for them in the long run.
I have talked to tenants who
have moved in, having been home owners, and have not had the chance of
buying into their property because we just offered renting. They have
said things like, “Yeah, that would have been great. I wish that
I had bought in because house prices have gone up in the 10 years since
I sold mine.”
So, I am keen to collect money
from people coming into Hanover developments. Some 72 per cent. of
retired people are home owners. Many of them now have unmanageable
properties and are lonely—they are affected by all the things
that can mean it is time for a move that will be good for everybody,
including the family that takes the
home.
Q
181
Sir
George Young:
I have two questions, Lord Best. We live at
a time when the major political parties are committed to deregulation.
You are the second consecutive witness who has asked for more
regulation, this time in connection with the private rented sector. Is
there not a risk that if we over-regulate the private rented sector, we
could go back to where we were 20 or 30 years ago when you and others
were advocating reform in order to regenerate and revive the private
rented sector, which has resulted in what we have now? Exactly what
regulation do you want, and is there not a risk of overdoing
it?
Lord
Best:
Those are fundamental questions. I definitely
am part of a conspiracy that has been very quiet about the need for
regulation because we have been so worried about the UK having the
smallest rented sector in Europe, about encouraging people to invest,
about saying anything about regulation and frightening the horses, and
about 50 years of decline. So, I have always had to bite my lip and not
say, “We should be regulating these rascals far more
heavily.”
Those days are gone. Now, if we
were to scare off a few people among the great wall of investors who
are coming in, that would be good. They are amateurs and speculators,
albeit perfectly honourable speculators—I am not saying that
people who move their pension funds are dishonourable. But, total
amateurs are coming into a totally unregulated sector. It would be good
to scare some of them off, because not all the money has been very
productive.
Q
182
Sir
George Young:
What do you want to do to
them?
Lord
Best:
Just to finish my point, Sir George, on what
the money has done. It has definitely had an impact on house prices.
Some of the bubble that is about at least to deflate, if not burst, was
created by the £120 billion of extra funding from those people.
Remember, housing associations have raised only about £35
billion of private money. The buy-to-let people have raised £120
billion in about six years. When that much money chases the same number
of houses that were there before, it is bound to have an inflationary
impact.
There is also
the problem that first-time buyers have been driven out. First-time
buyers have dropped from 40 to 25 per cent. of the purchasers of new
homes. So, scaring off some of that investment, which is not something
that we would have dared to do for 50 years, would be great. To ease
back on it would be a good
thing.
As to how that
could be done, I have just gone on to the council of the ombudsman for
estate agents. New legislation means that, from April, a person cannot
be an estate agent unless they belong to an ombudsman and redress
scheme so that there is somebody to complain to. Estate agents must
sign up with an organisation with whose judgment they must accord. If
they misbehave in any way, they will be fined, and they can even be
struck off. They will be referred to the Office of Fair Trading and
could be told that they are out of the scheme. From April next year, if
they are out of the scheme and neither the ombudsman or a redress
scheme will have them, they have to take their sign down and not sell
any more houses—they are
out.
However, a
letting agent—some estate agents are also letting agents, in a
rather complicated way—can go and put their sign up now. They
need no qualifications and they do not have to have done anything
before. People can be a letting agent tomorrow and take serious sums of
money in deposits and landlords’ rents. We do not have any
regulation of letting
agents.
Some of the
taxi drivers use a letting agent to do the job for them, others do not.
One whom I sat behind the other day said, “I am not paying 12
per cent. to some agent. I can get down there at least once a fortnight
if the plumbing goes haywire or something.” But whether it is
the landlord or the letting agent on behalf of the landlord, the
starting point is that they need to be part of either an accredited
scheme, or a professional body that has a code of conduct that it will
apply. Martin Partington of the Law Commission advocates that in his
report. I have discovered that the associations and federations that
represent private landlords—they represent only a small number
of private landlords
because a lot of people will not join—believe in regulation, too.
I chair the private rented sector policy forum, which is made up of
landlord and tenant groups. The landlord groups agree with the tenant
groups that you need some regulation to keep out the cowboys and to
bring some formality into the wild west that is the private rented
sector. An accreditation scheme does not need to be so frightening that
proper investors do not actually prefer it to a system that is totally
chaotic. We will see all kinds of problems now that some of this buy to
let has
unravelled.
Q
183
Sir
George Young:
I will need to be persuaded about that. May
I ask you about something that you said in evidence a year ago to the
Communities and Local Government Committee, when you said that housing
associations were “second fiddle”? You have repeated that
again today. Surely the local authorities have all the planning powers
they need to avoid the scenario that we have heard just now about the
housing association being allocated the worst plot on the site? If the
local authorities wanted to, they could oblige the house builders to do
all the things that you have expressed concern about. They do not need
any more powers, because they have got
them.
Lord
Best:
That is true in theory and increasingly in
practice. Local authorities are getting cleverer, and the section 106
agreements are getting better—they are beginning to understand
each other. However, a lot of local authorities are no match, in terms
of negotiation, with high-powered house builders, who can run circles
around them, frankly—they have highly paid and astute people who
negotiate for them. You have some youthful planner who is working for
the council, and it is not a fair match, so the deal is not always as
good as it should be, although I think that things are getting
better.
There is still
a fundamental difference between that and, for example, the Joseph
Rowntree Foundation buying a site, doing a master plan and deciding
where it wants the children’s play area, whether to get people
to walk to work by a certain route and where to put the cycle path and
the trim track for joggers. In that case, the organisation involved
will say, “We want 60 per cent. for sale now. Which house
builders shall we use? These people seem to be rather good quality.
We’ll bring them in, but they will have to compete with other
house builders. If such a scheme is run by the agency that is
responsible for the long-term management of the place—it is
going to look after the rented housing and the communal areas for
ever—it will set up a commonhold or equivalent scheme, in which
the ground rents stay in the place and can be used for the maintenance
of that place.
There
is a little scam that is currently almost universal in the sale of
flats. The ground rents are imposed by the house builders on the
occupiers. The ground rents are then capitalised, bundled together and
sold to an investor at 18 times the annual ground rent. That is a kind
of standard practice. You choose a ground rent that is small enough to
make no difference to the price you get for the flat, so the sale of
the ground rents to somebody else—there is nothing in return for
the ground rents, which are just payments—is just an extra
little bit of bunce on the top for the house builder. If we were to
collect up the ground rents, we would not sell them to somebody else,
because they are there to pay for the grounds, the common parts of the
building and things that happen. That is just a little scam that
happens almost universally with flats.
It also makes it much easier to
manage property if the agency is there to do the managing, where as the
people building it might be gone tomorrow. Sometimes the builders
think, “Where’s the next site to do? That is their
problem. We have given them all £1 in a management company; they
can sort that out for themselves.” Can they? I am not sure that
they can or will.
Keeping the ownership of the
place and getting the house builders to come as partners is fine. House
builders are infinitely better than Rowntree or anybody else at
building to exactly the price that they say that they are going to
build to. Everything that I have ever built has always come in over the
price that I first thought of, whereas the house builders always bring
it in. They have skills that are not always matched by the housing
associations. Use them for the things that they can do, but it is that
way round in my opinion, rather than always being second
fiddle.
Q
184
Mr.
Raynsford:
May we consider the regulatory regime that the
Bill establishes, and in particular, three areas in which concerns have
been voiced, not least by previous witnesses? The first is domain
regulation. Clearly, Cave’s recommendation was for the
introduction of a domain regulator. The Bill does not do so, and
previous witnesses, particularly from the local government side and the
Chartered Institute of Housing, recognised that there were formidable
difficulties in defining a unified regulatory regime. Do you have any
thoughts about how that problem can be best
overcome?
2.15
pm
Lord
Best:
Yes. It is well worth trying to get more into
the Bill and doing it now. The Secretary of State will say later, as
she said yesterday, that she is definitely committed to the idea of
local authorities and arm’s length management organisations
coming within a regulatory system within a couple of years, so that
commitment will happen at some later stage and it is well worth trying
to get this Bill to provide for it. The final amendments will probably
be tabled in the Lords in—I do not know—March? We have
some time now. Professor Ian Cole has been given the job of chairing a
little group that will examine how domain regulation could come to
pass, and we have time to table an amendment that would introduce it
early on. It is true that the regulatory system will be slightly
different, but it already has to be different for those private sector
organisations that provide social housing, so the regulator will
already have to account for differences according to who is behind the
social housing provision.
It may be that the only new
clause anybody can find the time and energy to produce in the time
available is an enabling one, and it will need to be a constrained
enabling one to get through the House of Lords down the other end. If
the provision is too open-ended, people will become very anxious about
it, but a constrained enabling new clause might still be enough.
The process whereby
you are nominated to a housing association or a council property is
fairly arbitrary:
your demand is today, and that is what is available. It is odd to have
two different systems, and when council stock is transferred to a new
organisation or to the council in a new guise, there is a great cry
from Defend Council Housing. It always says, with modest justification,
“That’s terrible. You’re going to lose your rights
if you’re under this regulatory system compared with the one
you’re under now.” People transfer and move around,
however, and as far as the expectations and understanding of the
tenants are concerned, it is important to have one totally comparable
regulatory system. The way in which it is administered, centrally, will
be different, but through the eyes of the tenant, there is no need for
it to be different.
Q
185
Mr.
Raynsford:
The second concern is the balance between
ensuring effective action where necessary to deal with malpractice, and
avoiding over-heavy regulatory controls. Concerns have been voiced that
the direct line from the Minister, who is able to direct on standards
through the regulator to registered social landlords, could compromise
RSL independence and might even alter their status under the
classification as non-public sector bodies. You are the chair of a
major housing association and you have enormous experience of that
territory, so do you have any thoughts on those issues?
Lord
Best:
We should not risk it. It would be better to
work around some amendments. I am not sure whether the wording is good
enough, and if there is any doubt, we should not risk it, because if
some EU bureaucrat classified us as public bodies and everything that
we borrowed became part of the national debt, I would not say half the
point of having housing associations, but a major reason why we have
promoted the option, would go out of the window. It would be a
disaster, and we would have far less money for social housing. It is
not worth the risk of getting the wording wrong.
The Secretary of State
directing the regulator and then the regulator directing the housing
association sounds too much like a chain of command. We could fall into
the trap of being classified as public bodies. In a way, we are being
asked to have faith that the civil servants have entirely got their
heads round this, and that they have checked it out with the economists
in Brussels or wherever, but I am not sufficiently confident that we
have got it sorted. What we need are some gentle amendments, not so as
to lose the power of the regulator to do the right thing but to make
absolutely damned sure that the Bill is not an Exocet that blows apart
what many RSLs are all about.
Q
186
Alistair
Burt:
While we were discussing the availability of rented
property and the pressures on housing generally, we touched on an
argument about the place of the rented sector in British society and
the fact that over the years there has been pressure to see rented
property solely as social rented property. That is in contrast to what
happens on the continent, where people rent much more often and the
supply is much more mixed. Do you have any observations on that
situation? Is there anything in the Bill that might change the nature
of housing in our society, which is so heavily concentrated on owner
occupation, almost to the exclusion of anything else? Is there anything
that you think would get back a slightly wider rented sector
and allow us to return to the situation 20 or 30 years ago, when a
larger proportion of those with higher incomes were prepared to
rent?
Lord
Best:
There has been a remarkable growth in the
private rented sector in recent years. The chart had reached about 9
per cent. and is now heading for 12 per cent. of the stock. There has
been a major uplift in the quantum of privately rented
properties—
Alistair
Burt:
From a very low
base.
Lord
Best:
From a pathetically low base. Only one European
country—Bulgaria or Romania, perhaps; you have to search pretty
hard to find it—has a lower proportion of privately rented
stock. There has been a turnaround in the value of that sector for the
young, mobile and single or for childless couples. I do not advocate
security of tenure for private tenants in the private rented sector,
which Shelter might have been edging towards; there is no doubt that
people would be unlikely to invest in the sector, because they would
never know when they would be able to get their money back out again.
That will not encourage the growth of the sector or its stability,
which means that we have a sector in which there is unlikely to be
security of tenure.
That does not matter
too much if you are young and mobile—and nowadays, mobile,
single and not settling down with a family takes you to about 33. In my
day it was about 23. However, the sector is really not suitable for
families with children who want to put down roots and need security.
You want to send your children to a school knowing that you will not
have to move them to another; you want to get settled in a community.
For families, relatively long-term security is important and the
private rented sector is not suitable to perform that task. Someone
said that long leases are quite popular at the top of the market;
there, you blur into home ownership.
We have done well in recent
years in increasing the amount of ordinary rented housing for singles
and mobile people. I have a son who recently left Manchester
university, and he and his partner have been looking for a flat to rent
in Manchester. I can remember the days when if you wanted to rent a
flat you rushed to the phone box and tried to ring the landlord before
anyone else, almost certainly to be told, “No, it’s
gone.” My son and his partner were taken around in a car by the
agent and shown 25 properties. It is another world. In the market they
are going for in Salford quays and Manchester the cost is about
£600 a month for the two of them, and they took one at
£620, which is not a bad price.
We have pretty quickly created
a new private rented market in those city centres that did not exist 10
or 12 years ago. That is great for people like my son and his partner,
but later on they will want to buy because they will want a family home
and not want the insecurity of being tenants. They will want the
investment things that go with owning and eventually paying off a
mortgage and having something for their children. That is just the
reality of it, I
think.
Q
187
Margaret
Moran:
Those of us who have been around the housing mafia
for a long time remember well the RSL—the housing association,
as was—drive
to develop in the 1980s. Do you think that there is a danger of that
occurring again? Do you think that there is enough emphasis in the
Bill, given that it is a housing and regeneration Bill, to ensure that
we will end up with sustainable and cohesive communities? You were
talking about not talking about units, as we used to, but about
people.
Lord
Best:
A really important part of that is whether, in
the future, we build a mix of incomes into what we provide. The kind of
ghettoisation of social housing has been almost criminal, has it not?
People’s life chances have been diminished by the way in which
we have done it. Large estates, where only poor people are allowed, or
only people who have problems in many cases, have not been a good
policy. We know that now, and the tide has turned.
On how to achieve that mix,
sometimes the mix is totally artificial and slightly silly. Hanover has
a block of 50 apartments at Imperial wharf, where the private sector is
selling for an average of £640,000 a flat. The social housing is
there, but it is actually just a mechanism for getting your hands on
some land. We cannot really call it a mixed community when there are
homeless families and the average price is £640,000. But for the
generality of new schemes, we will try to ensure that there is a jumble
of people, some of them in the middle between the owners and tenants
and no one quite knows, and that tenants have the opportunity not to be
tenants by buying some shares and moving up the ladder.
We have got to get better at
allowing people to staircase down, as we call it; a lot of shared
owners will get into problems when the interest rates go sneaking up in
the next few months, their early offer is over and they have to pay
more for their mortgages. We will have to be clever in allowing people
to staircase down rather than make them homeless, so that they stay
there as tenants, which they can afford, not as homeowners, which they
no longer can. You are absolutely right to ring the warning
bell.
Might builders
rush out there and do it all again? I think that the answer is probably
not. Probably the lesson has been learned and we will create things
that are sustainable as communities, not just a bunch of
houses.
Q
188
Paul
Holmes:
You touched earlier on the Secretary of State,
through the regulator, being able to tell RSLs what to do, and that
they might therefore become public bodies. What specifically do you
think of the idea of the regulator being able to tell housing
associations that they should deliver healthy living policies, or get
people back into work, or other such things? They are not receiving
public money to do that; they are receiving it specifically to build
houses.
Lord
Best:
I think one has to be a bit careful with using
the regulator for that purpose. It is one thing to be sure that you are
protecting the existing and future tenants and that their interests are
being well served; it is another to use the regulator as a tool of
public policy because there is something else on your agenda.
“Antisocial behaviour? Let’s get these people, for free,
to do a lot of the work that might have been done by other
agencies.” On worklessness, housing associations, at least the
good ones—the RSLs vary on a spectrum of nought to 100, even
though there is a lot of regulation and you would
have thought that they would all be standard by now—are getting
really good at tackling worklessness issues. I am so impressed. The
Housing Corporation has a gold award scheme, and for the third year I
am a judge. This year a prize goes to the one that is doing most to get
people into jobs on the estates and in the area where they are working.
Some are doing really fantastic things. However, to get the regulator
to step in and insist that such policies be carried out would be
totally counter-productive. Hackles will rise.
There are boards of housing
associations; they are responsible people—15,000 people are on
the boards of housing associations. By all means give them incentives
and bright ideas and use the good will that is there, but we ought to
back off from using regulation. Some modest amendments will probably be
necessary.
The
Chairman:
Lord Best, we are very grateful for your time.
You will have heard us say earlier that the
Hansard report of
this sitting will be published. If there is written information that
you would like us to have, please let us
know.
May we have the
next
witnesses?
2.30
pm
Thank
you for joining us, ladies and gentlemen. In the interests of speed and
efficiency, I will indicate who is now with us: the Minister for
Housing, Yvette Cooper; the Under-Secretary of State, who has left us
to join the hunted, Iain Wright; Philip Cox, the director of the Homes
and Communities Agency implementation team; Peter Ruback, the deputy
director of the affordable housing division; and, Anne Kirkman, the
deputy director of the decent homes, housing finance and mixed
communities division. We are very grateful to you for joining us so,
without further ado, we would like you to go into bat and we will bowl
the first question at
you.
Q
189
Alistair
Burt:
Minister Cooper, when talking about the use of
surplus land to build eco-homes and eco-towns, you seem quite confident
that 200,000 new homes can be built on surplus public sector land by
2016. That has been said by the Department. If you are confident of
that, is there any reason why you have taken compulsory purchase powers
for the new agency?
We
have had some discussion already about the agency’s powers, and
I think that it will be an important issue in our scrutiny of the Bill.
Could you just help us out on the issue of why compulsory purchase
powers are needed, when there appears to be sufficient surplus land to
do the
job?
Yvette
Cooper:
May I say that it is a pleasure to be here,
Mr. Gale? This is the first time that I have given evidence
to a Committee in this format and I hope that you will guide me on
procedure. I also draw the Committee’s attention to the written
ministerial statement that I made yesterday, which includes some
provisions that have relevance to the Bill. As and when such questions
come up, I will refer to it, but I wanted to make sure that everyone
was aware of
it.
In
response to the question, our intention is to ensure that the Homes and
Communities Agency has the powers that English Partnerships currently
has in compulsory purchase powers. There will be times, for example,
when
land assembly issues are involved. There might be a public sector site
with private sector land surrounding it, or between it and the adjacent
local authority site, so the council and the HCA will want to work on
it together. Compulsory purchase powers would be needed in such
circumstances. The proposal reflects the kind of circumstances in which
English Partnerships currently uses compulsory purchase powers. It is
right that that should be included in the
Bill.
Q
190
Alistair
Burt:
I am sure that you would confess to a little
disappointment about the Government’s performance over the past
10 years in delivering the sort of housing record that you would like
to have achieved by now. It is quite clear that you are setting quite a
lot of store by the agency to deliver a step change in the number of
houses to be built. It is one of the great master plans for the future.
Why do you think that the agency can deliver when, up to now, the
record has been relatively
poor?
Yvette
Cooper:
House building is at its highest rate since
1990, and there has been a significant increase over the past few
years. Significant work is under way, particularly in growth
areas.
Some local
councils are still resistant to additional homes. It is important that
every part of the country recognises the need for more homes. The
HCA—and we have not had this before—brings together
public sector land and public sector grant for housing. We are
therefore bringing together procurement money for new and additional
housing and public sector land. In addition, we are bringing housing
and regeneration together more effectively.
Traditionally, housing was seen
as the role of the Housing Corporation, and the role of English
Partnerships as more about regeneration, although recently it has
become more about land for housing. It is important to link housing and
regeneration functions effectively, particularly in the light of the
John Calcutt review, which made some interesting proposals on the
potential for using land previously assessed as low-value brownfield
land, and increasing its value to use it to support more housing.
Bringing together those land and housing functions and the land
regeneration and procurement functions gives the HCA considerable
potential.
Q
191
Alistair
Burt:
Sounds good. Do you think in that case that you
would follow the recent recommendation of the Public Accounts Committee
and give the Thames Gateway to the HCA to
run?
Yvette
Cooper:
Clearly the HCA plays an important role in
the Thames Gateway, because we are talking about procuring substantial
numbers of homes and affordable homes there. There are also land issues
in the Thames Gateway, and there is a series of areas where the
functions of English Partnerships and the Housing Corporation are
relevant. That, too, is part of the HCA’s remit. There are other
areas where we have consulted on growth area functions, the decent
homes work of the HCA, and other issues where we think there are strong
reasons for the HCA to play a role. We will confirm our views on
precisely what will be covered by the HCA in time for you to have those
debates in Committee. You will appreciate that we are hoping to
make an early appointment of the chief executive of the HCA. As part of
that programme we would like to set out the other things that will be
covered by the HCA. That gives us an opportunity to look at its role
regarding the Thames Gateway, too. Clearly, many growth area functions
and Thames Gateway functions are
similar.
Q
192
Alistair
Burt:
Let me press you on that. The capability review of
the Department was published in December 2006. It identified the
Department’s weakest area as delivery. Bearing in mind the
performance of the Department on the Thames Gateway over the past
several years, what gives you any confidence that it is any better for
the Department still to run it than the agency? Why can you not say
that you are going to give it to the
agency?
Yvette
Cooper:
The Department’s record on the Thames
Gateway is extremely strong. Look at the changes that have taken place
in the Thames Gateway. Even over the past 12 months, we have seen the
go-ahead for Crossrail, including the spur down to Abbey Wood, in which
the Department has been very closely involved. It includes the channel
tunnel rail link and the progress on the London Gateway, including the
new port. It also includes the go-ahead for the Ebbsfleet planning
permission, which was possible only as a result of close working
between the Thames Gateway team in the Department and the Department
for Transport. We have also pulled together the delivery plan, which
has involved a lot of cross-Government working to agree budgets across
Government
Departments.
I agree
that we are now moving into a different phase. Having got that
cross-Government delivery plan and the budgets in place, we need to
move on to the practical delivery implications, which means a much
stronger role for the HCA. As I have said, however, we will set out its
final functions in advance of your detailed
consideration.
Q
193
Alistair
Burt:
I am grateful for that. Finally, you slightly
surprised me with your praise for the performance of the gateway over
the past year or so. If that is the case, why has the chief executive
been
sacked?
Yvette
Cooper:
You will appreciate that it is not
appropriate for me to comment on departmental staffing arrangements,
which are a matter for the permanent secretary. Judith Armitt, who was
the chief executive of the gateway, is still an employee of the
Department. Those are internal civil service staffing
matters.
Alistair
Burt:
I don’t think you will be able to get away
with that for long, but thank you for your
answer.
Q
194
Sir
George Young:
I wish to raise other issues later, but I
would like to follow up what Mr. Burt’s question
about compulsory purchase order powers. As you said, the HCA is a
merger of English Partnerships on the one hand and
the investment wing of the Housing Corporation on the other. English
Partnerships has CPO powers and planning powers, but the Housing
Corporation does not have either. Do you think that the English
Partnerships-type powers—planning and CPO—of the new,
merged body will move across to the conventional housing function
discharged by the Housing Corporation, or do you think that those
powers will continue to be used mainly in relation to scenarios where
English Partnerships would intervene? That is a matter of enormous
sensitivity to the local authorities. Have I made the question
clear?
Yvette
Cooper:
Not entirely. Would you give me an example of
the kind of case to which you are
referring?
Q
195
Sir
George Young:
At the moment, there is no question of CPO
powers or planning powers being exercised by the Housing Corporation in
relation to a straightforward housing scheme, because it does not have
them. When English Partnerships moves in on a major infrastructure
scheme, it needs CPO and planning powers. Is it your intention that
when the HCA is confronted with what I would regard as a
straightforward housing scheme it should use the CPO and planning
powers and take them away from the local authority, or would those
powers continue to be discharged, as they are at the moment, by the
local
authority?
Yvette
Cooper:
We would expect the local authority to use
its planning powers and to play a strategic housing role. We want the
local authority to lead on the appropriate development of housing, the
appropriate sites for housing and the need for affordable housing. The
HCA will have a series of roles, including the distinct roles of
existing bodies. The Housing Corporation’s role is one of
funding. It does not undertake the delivery of housing schemes in the
middle of Wakefield, Gloucestershire or wherever; it funds them. It
provides funding to housing associations or developers conducting those
development programmes. We would expect there to be a whole series of
areas where that relationship pertained. There might be an application
for funding from a housing association, from a council, or from a joint
venture for funding, and the HCA will provide that funding. In other
cases, English Partnerships would previously have been the developer of
a piece of public sector land, or would hold the ring and deal with
development plans for it. Now, the HCA will lead the
development.
The real
gain is that the agency is more than the sum of its parts.
It can operate as a partner in support of local
government. Local government will take the lead, and draw up what it
wants to achieve in its area, such as the development of an old
coalfield site on which the HCA is working, or the development of areas
where direct funding is available. There will be huge potential, as
local government can work with the HCA and draw on its skills. There
are some areas where local authorities have excellent skills and are
extremely good at delivering development. For example, in Greenwich,
there are lot of skills within the relevant department. However, other
areas have much weaker skills, and it is an added advantage that they
can ask the HCA for help, advice and expertise on how to take forward
some of those
programmes.
Sir
George Young:
But if you want to work in partnership with
the local authorities against that background, you would not want to
take away their
planning powers and vest the planning powers for a particular project in
the Homes and Communities
Agency.
Yvette
Cooper:
No, you would not expect to do so. There is
only one example of planning powers being vested in English
Partnerships, and that was done in close partnership. The decision to
give English Partnerships development control powers was made in
partnership with Milton Keynes council. We have always envisaged that
this is about building supportive relationships and working with the
local authority in the lead, which will provide flexibility. Special
arrangements can be put in place in the unusual circumstances that
apply in Milton Keynes.
Q
196
Mr.
Raynsford:
In describing the role of the Homes and
Communities Agency on previous occasions, you have emphasised the fact
that it would carrying forward the powers of the Housing Corporation to
ensure delivery of the Mayor’s strategy in London. It is fine to
work in partnership with authorities that want partnership, but there
are obvious issues about what happens when individual authorities do
not perform, or when the Mayor is concerned that they are not
delivering satisfactorily. How do you think that the agency can balance
the two separate roles of working in partnership yet being able to
intervene when necessary, if there has been a failure to deliver by the
local
authority?
2.45
pm
Yvette
Cooper:
The primary starting point is the planning
system, and in the obligation of local authorities to ensure delivery
under that system. There are issues on what happens when cases go to
appeal, if local authorities do not do their job through the planning
system. Equally, we think that there are special arrangements for
London, which were set out as part of the revisions associated with the
Greater London Authority Act 1999. The Mayor has a responsibility to
deliver his overall strategy. The Act contains specific additional
powers that recognise that and allow the Mayor to step in where there
is under-delivery against the strategy on the housing and planning
sides.
It is right
that the Homes and Communities Agency should be tasked with delivering
that strategy for the Mayor. Additional things can be done, for
example, with public sector land and by direct work with housing
associations in areas where the council or borough is not doing its bit
to support housing. The Homes and Communities Agency will be able to
ensure that there is work to try to make progress on homes in relation
to land, with housing associations and, in London, particularly with
the Mayor.
Q
197
Andrew
George:
It may be that I am catching up with others, but I
just want to be clear about any residual powers of English Partnerships
for the delivery of industrial space, workshops and other things for
which it has provided in the past. I also want to be clear about
whether those powers will be transferred into the new, amalgamated
body. If I am right that the powers will indeed be transferred, then
given your statement that the new body is a housing body, to what
extent will that mean that either the past powers of
English Partnerships to make proposals for industrial infrastructure
and workshops will be suppressed by the activities of the new agency or
the new agency will be diverted into that territory? To what extent can
those functions be
balanced?
Yvette
Cooper:
We have to address regeneration, as well as
housing. Work such as the coalfields programme—part of English
Partnerships’ work—has been extremely important as a
regeneration role. As I said previously, we underestimate the potential
of linking regeneration towards delivery of housing. Regeneration is
critical in its own terms, but it will not be possible to deliver all
the homes that are needed unless there is that link.
We have referred specifically
to the Homes and Communities Agency rather than just the homes agency.
The expectation is that all the regeneration roles of English
Partnerships will be carried forward into the Homes and Communities
Agency. Yesterday’s statement discussed the Homes and
Communities Agency being able to look at low and mixed-income
communities and what can be done among existing communities. That is
about regeneration and linking housing and employment and so
on.
Q
198
Andrew
George:
Does that mean that Ministers will provide
indicative budgets and suggested silos on the proportion of the Housing
and Communities Agency that is directed towards housing and the
proportion that is directed towards other regeneration functions? Or
will you leave it entirely to the agency itself to determine those
matters?
Yvette
Cooper:
Clearly, funding priorities and similar
matters need to be set out at a ministerial level, but we take advice
from a range of bodies and organisations. For example, yesterday we set
out the regional housing pot based on advice from regional housing
boards. That includes the funding for new affordable housing, and
funding that will go on private sector renewal, much of which is about
regeneration.
At this
stage, we cannot be precise about exactly how the budget for the new
agency will be set—how much will be prescribed, and how much
given as flexibility. We need to look carefully at where we can get
synergies between the budgets for the different organisations and what
the flexibility will be. The huge potential gain is being able to look
at those budgets together, but it is probably too early for us to
specify precisely on
that.
Iain
Wright:
Following on from what the Secretary of State
was saying, I draw the Committee’s attention to clause 2, which
lists the objects of the HCA. It states quite clearly that they
are
“(a) to improve the
supply and quality of housing in
England,
(b) to secure the
regeneration or development of land or infrastructure in England,
and
(c) to support in other
ways the creation, regeneration or development of communities in
England or their continued
well-being,”.
That is not
“either/or”; it is “and”. Linking in with
what the Secretary of State has said, it is the role of the new chief
executive and his or her board, when they move forward, to decide upon
allocations.
Q
199
Andrew
George:
But if the rationale and drive behind it is the
target of building 3 million homes or whatever it happens to be, will
that not mean that the economic regeneration roles, the residual roles
of
English Partnerships, will be very much a second priority and will be
lost in the development of the
agency?
Iain
Wright:
No, absolutely not. I am very clear on that.
As the Minister has already said, it is clear in the name—the
Homes and Communities Agency—that the relationship between
housing and regeneration is absolutely key. My personal
feeling—my boss will tell me off if I am wrong—is that if
we plonk 3 million homes in a field in the middle of nowhere and then
pat ourselves on the back, it would be the wrong approach. We must have
integrated sustainable communities with viable, regenerative and
economic bases, which is what the agency can
do.
Q
200
Margaret
Moran:
Forgive me if I am wrong, but looking at the powers
of the HCA, I could not see anything relating to an equality duty.
Perhaps I have missed it, but if it is not there, why not?
Secondly, there is a great deal
of interest in community land trusts. Perhaps you can clarify your
definition of them, as there is a momentum to include something along
those lines within the Bill. Perhaps you will also clarify your advice
on the pilots that are being formulated at the
moment.
Yvette
Cooper:
I have asked one of the officials to respond
on the equality duty and the detail of the legislation.
We are clear that community
land trusts have considerable potential in terms of providing more
affordable housing, and we strongly support them as a model that can be
tried in different areas. We have 14 pilots under way—seven in
rural areas and seven in urban areas. The interesting question is
whether they can be made to work if the land is not gifted in for free.
If the land is gifted for free, they are clearly a successful way of
providing affordable
housing.
We are using
the pilots to look at how they can be made into viable models—we
think that that is possible on the basis of some of the work that comes
forward through the models and some of the proposals that are currently
under way that look at different ways of doing that. It is something
that is currently being supported. English Partnerships is involved,
but the main engagement with the community land trust at the moment is
through the Housing Corporation, which funds some of the pilots. The
agencies have the ability to do that within the existing framework.
They are actively doing it, and we would like to see them do more. The
HCA already has the powers to promote community land trusts, and we
expect it to do
so.
Philip
Cox:
I would need to check, but I think that the
Homes and Communities Agency would be a public body and, therefore,
governed by the usual requirements of equality set out in other Acts of
Parliament. That is where the equality duty comes
in.
Q
201
Grant
Shapps:
I want to turn your attention to targets and local
delivery.
It is a fact
that the Department has had a problem with delivery, which has been
recognised in a variety of reports. In particular, we have already
heard about the
Thames Gateway, which both the NAO and the PAC criticised for having a
lack of direction. Delivery there has been a
problem.
The
Bill’s approach seems to be to create high targets and expect
them to be delivered. Yet the history is not favourable. In the past 10
years, about 146 housing units a year have been delivered, as opposed
to 175 in the previous 18 years. We know that fewer social housing
units have been delivered every single year in the last 10, than under
any of the 18 years before. Am I right in thinking that your analysis
is, therefore, that a more powerful central body is required to get
this delivery through, which would be the
HCA?
Yvette
Cooper:
Nice try, Mr.
Shapps.
As we are clear, the level of
house building has increased substantially over the last few years and
is now at its highest level since 1990, which is important. It is also
the case that we have seen substantial increases both in the level of
investment in new social housing, and also in the level of delivery in
new social housing.
It
is certainly true that the cost of social housing in the early 1990s
was much lower and, therefore, the cost of procuring and building
social housing for the public sector was much lower at that time. That
was, however, as a result of a quite devastating housing market crash
triggered by the Conservative Government at the time. Perhaps the
lesson on housing delivery from previous Conservative Governments is
not one that we should learn from or should be citing in the
Committee’s discussions
today.
However, there
is a question about how to move forward and achieve increased housing
delivery in the future. It is right that local councils need to take
some responsibility for that. It is unfortunate that a series of,
particularly Conservative, local authorities have been strongly
resisting housing delivery and, indeed, attempting to frustrate such
delivery in their areas. That is clearly of concern to us, and I hope
that it concerns Conservative Front Benchers as well. We want to see
all local authorities responding to the need to deliver more homes in
their area and we think that the HCA is the right way to help them do
so. I am slightly puzzled by Mr. Shapps’s reference
to targets in the Bill. I wonder to which sections of the Bill he was
referring when he was talking about
targets.
The
Chairman:
Order. We are here to discuss the Bill. I
appreciate that we are in a party political arena and that the
witnesses on this occasion are politicians, as are those on the
Committee, but it is as well that we all remember that the purpose of
these Committees is to seek to improve the legislation through genuine
questions and genuine answers. I am not certain that seeking to score
party political points, either on the part of the witnesses or of
members of the Committee, will serve any useful purpose. Perhaps you
could bear that in
mind.
Q
202
Grant
Shapps:
I quite agree, Mr. Gale. The point here
is to dig down to what is below the surface. The Bill is, after all,
the upshot of the Green Paper, which is specific about the targets. I
understand—perhaps you will correct me if I am wrong—that
the HCA is the delivery mechanism for the targets that were discussed
in the Green Paper.
Yvette
Cooper:
Certainly, we expect the HCA to work very
closely with local authorities in order to deliver the extra homes that
we need. Mr. Shapps’s initial question suggested that
the Bill was about setting targets, and I was not sure which clause he
had in mind when he made that
reference.
Q
203
Grant
Shapps:
If you are clarifying that the Bill is not
designed to deliver the targets discussed in the Green Paper, that
clarifies a significant area of interest, because many of us feel that
the HCA has merit and can do some good things. It would be really
interesting to understand the motivation for framing legislation in
that way and that is why this sort of witness investigation is a proper
process for understanding the direction of the Bill. To what extent do
you believe that the failure to deliver the Government housing targets
over the past decade has been the result of a lack of central control
and central power, in appropriate circumstances, as you see it, to ride
roughshod over local
communities?
Yvette
Cooper:
I am not sure which targets you have in mind
when you say they are not being delivered, because the current targets
that are in regional plans across the country are more than being
delivered. At the moment, local authorities are delivering more than
the targets in the current regional plans. We believe that by 2016 they
should be delivering 240,000 homes a year, which is an increase from
the previous target of 200,000 a year by 2016. This far, there has not
been any under-delivery against the targets that have been set for
2016, because, as I recall, it is not yet
2016.
3
pm
Q
204
Grant
Shapps:
You said 200,000 houses by 2016, but I understood
that it was
240,000.
Yvette
Cooper:
Yes, that is the new target. As I have said,
we have set the target of 240,000 homes a year by 2016, up from the
previous target of 200,000, but, of course, it is
2007.
Q
205
Grant
Shapps:
At the moment, the Government are missing the
house building target that they have had up to this point. For example,
we are nowhere near the 200,000
figure.
Yvette
Cooper:
Also, as I understand it, we are nowhere near
2016.
Q
206
Grant
Shapps:
No, but 2016 is 240,000, not
200,000.
Yvette
Cooper:
I shall say this very slowly: the previous
target was 200,000 homes a year by 2016. Today is 13 December
2007.
Q
207
Grant
Shapps:
Was it your intention as a Government to build
fewer houses every single year under this Administration than under the
last?
Yvette
Cooper:
I am happy to return to a discussion of house
building under the previous Government, if you will allow me,
Mr. Gale, but I do not want to try your patience any
further.
The
Chairman:
Order. I am not sure that I
will.
Yvette
Cooper:
Let us be clear: we have set a target of
240,000 homes a year by 2016, which will require a lot of local
councils across the country to support considerably higher levels of
house building than they currently are.
Lyn
Brown:
My question is not on this point, Mr.
Gale.
The
Chairman:
Briefly, Mr. Burt, on this
point.
Q
208
Alistair
Burt:
The evidence given by Sir Simon Milton of the Local
Government Association indicated concern about the whole area of taking
planning powers away. He stressed the point that councils want a
greater involvement than that on the face of the Bill. Will you publish
any guidance about precisely how or when the agency will step in and
take powers away? How can we reassure councils that that is not going
to be an arbitrary process? How can we deliver for the LGA across the
country some certainty about when decisions will be made?
It is one thing for a community
to say, “Look, we really do not think that this is right for our
area,” and quite another thing for the Mayor of London to say
that he does not want affordable housing on the development site at
Victoria station, even though the local council does, and for
legitimate expressions of local feeling to be overridden. How is that
difficult judgment to be made, and are you going to publish some
guidelines to let councils know how that will be
done?
Yvette
Cooper:
Let us be clear: we would not expect the HCA
normally to be the planning body, and English Partnerships, as we
speak, is only using that power in one area of the country, and that is
in close partnership with the local authority. There are potential
partnership arrangements that you might envisage. We have also simply
tried to replicate the existing powers from English Partnerships and
the other organisations that are effectively being pulled together in
order to have the same flexibility to do that kind of
thing.
So,
there are also provisions in the Bill about the circumstances under
which the Secretary of State must take the decision. It is not a
decision that the HCA can take. The Secretary of State must take the
decision under particular circumstances, which includes making the
designation orders. A whole procedure must be gone through there, which
includes local authority consultation. It is all set out in clause 13.
Did you want to add something,
Iain?
Iain
Wright:
I want to take Mr. Burt back to
precisely what Sir Simon Milton said on Tuesday. It was in direct
answer to one of my questions, in which I was saying that in the era of
a London mayoral system and of multi-area agreements, a local authority
may be dragging its heels. He
answered:
“You
painted a scenario in which one authority was seeking to drag its
heels. In those circumstances, I would wish to understand why that
local authority felt differently from the other local authorities in
the agreement and what obstacles and blockages were making it feel that
more housing was inappropriate—it would almost certainly be
because of a lack of necessary infrastructure in that area. In those
circumstances, I would expect the HCA to act positively to remove those
blockages”.——[Official Report, Housing and
Regeneration Public Bill Committee, 11 December 2007; c.
9.]
I see that as the
relationship between the HCA and the local authority as well. It is a
one-stop shop; a repository of good talent and skills to allow local
authorities to step up to the plate in order to ensure that their
housing needs are addressed.
Q
209
Alistair
Burt:
That is helpful. It gives us a sense that, if those
powers were to be used more than rarely, then something would have gone
wrong. Is that your intention, Mr.
Wright?
Iain
Wright:
I certainly believe that the relationship
between the local authority and the HCA is crucial, and it must be a
proactive and positive relationship. It cannot be a top-down
imposition. It needs to be a constructive, positive relationship in
which the agency says to the local authority, “How can we help
you? What are the blockages”—to use Sir Simon’s
term—“in terms of infrastructure? How can we help to
remove
those?”
Yvette
Cooper:
I do not think that anyone would regard
Milton Keynes as a situation in which something has gone wrong. The
arrangements were put in place because it was felt generally to be best
and was worked out with the local authority, given the history of
Milton Keynes as a new
town.
Q
210
Alistair
Burt:
So your clear defence is that this is almost last
resort stuff, and that if the powers are used extensively to take
planning powers away from local planning authorities, something will
have gone
wrong?
Yvette
Cooper:
I do not think that in Milton Keynes it was
viewed as a last resort. So I think that those are not what you would
expect to be the usual arrangements. They were used in Milton Keynes
because there are unusual circumstances there, due to the nature and
scale of the development, the ownership of the land and the history of
Milton Keynes. The right way to see it is that it would not be expected
to be the normal arrangement that the HTA became the planning
authority, but there may be specific arrangements, such as those for
Milton Keynes, for which it might be
appropriate.
Q
211
Lyn
Brown: In the evidence sessions and on Second Reading,
people have noticed certain omissions in the Bill, such as
overcrowding, the review of the private sector, and houses in multiple
occupation. Yesterday, when you made your statement, you talked about a
review of the private sector and also indicated a review of the
statutory overcrowding standards. Does that mean that you will look at
multiple occupation in housing, because that would certainly be welcome
in my constituency? I also wonder what the time scales might be, and
whether there might be Government-backed amendments to the Bill to deal
with those
issues.
Yvette
Cooper:
I will deal with the issues of overcrowding
and the private sector. Our view is that there are already powers to
increase the overcrowding standards, and we took them, I think, in the
Housing Act 2004. The children’s plan sets out our intention
that we need to increase the overcrowding standard to the bedroom
standard. Yesterday, we set out an overcrowding action plan, which will
work with 38 local authorities that account for about 60 per cent. of
the overcrowding problem. We would expect those local authorities
immediately to start operating to the bedroom standard, because they
are getting extra funding to work on the issue, but we will work with
them to look at the costs and time scales and to determine the
appropriate timetable for moving to the bedroom standard right across
the
country and for using secondary legislation to raise the overcrowding
standard to achieve that. That is the point on
overcrowding.
On the
private
rented—
3.10
pm
Sitting
suspende
d for a Division in the
House.
3.25
pm
On
resuming—
The
Chairman:
Order. In her opening remarks, the Minister
referred to a speech that she made yesterday. The text of that speech
has now been circulated to all members of the Committee and you should
find a copy of it in your place. If there is a further Division, I
shall terminate the sitting. We are allowed only 15 minutes of injury
time, so if there is a Division within the last five or 10 minutes of
that time, it would be pointless to bring everyone back again. That is
the state of play as I see it. I ask Lyn Brown to pick up the
questioning where she left off.
Lyn
Brown:
Minister, you were saying that there was no need
for primary legislation on the statutory overcrowding standards. I
think that you were going on to speak about the private rented sector,
and I hope that you will address HMOs and the point raised in these
evidence sessions that that debate should be not about property, but
about the number of people occupying
space.
Yvette
Cooper:
In yesterday’s statement, I said that
we wanted to conduct a wide-ranging review of the private rented
sector. The Housing Act 2004 included a series of measures on HMOs and
other matters in the private rented sector. It is right to review the
workings and implementation of those measures and to have a more
wide-ranging review of the private rented sector. We will set out terms
and conditions in the new year and give a bit more detail about it. We
do not anticipate making any further changes to this Bill linked to the
private rented sector, as we do not want to pre-empt the work of the
review, which will look at the private rented sector as a
whole.
Lyn
Brown:
May I push you on the time
scale?
Yvette
Cooper:
We expect it to report during the course of
next year. We have not set a time scale, but we will do so early in the
new year.
Q
212
Mr.
Love:
Minister, I am sorry to take you back to your answer
to an earlier question about community development trusts—I had
hoped to get in before now—but you have said that one of the
central problems in making it all stack up is the disposal of land.
There has been quite a lot of discussion about what is in the Bill in
relation to “best consideration” for land. Has any
thought been given to a more appropriate wording, which might help in
situations concerning community development trusts and other
circumstances within the public sector when “best
consideration” might not be the most appropriate way to ensure
the development?
Yvette
Cooper:
The wording used in the Bill refers to the
previous bodies; for example, English Partnerships’
consideration includes the same “best consideration”
language. Similar wording applies to housing associations and to local
authorities, too. It allows you to look more broadly than simply at
money and the market value. On the basis of my detailed discussions
with our legal advisers, I believe that the explanatory notes are not
accurate, as they simply refer to the market value, when it seems to me
that “best consideration” goes considerably beyond that.
It allows you to take market value into account and might also include
other issues such as the public benefit, and so
on.
That
is our view about the legislation, which simply replicates the current
arrangements under which English Partnerships is already allowed to
operate. That was our intention. We are happy to look at it further,
but that remains our view about the best arrangement at this
stage.
3.30
pm
Q
213
Mr.
Love:
A witness from the Chartered Institute of Housing
suggested that we
consider
“new
investment frameworks in which the state can look at investments rather
than grants and see a return on its investments over a period of
time.”——[Official Report, Housing and
Regeneration Public Bill Committee, 11 December 2007; c. 23,
Q34.]
It would be an entirely
different way of looking at it to consider the investment return rather
than saying, “One person’s grant is another
person’s cost increase.” Is there any possibility that we
could have not only a nuanced shift but a substantial shift in order to
try to create the opportunity for greater
development?
Yvette
Cooper:
Interestingly, I think that English
Partnerships already takes a long-termist view when it is looking at
the returns from its land, at how to dispose of its land and what to do
with public sector land in the public sector interests. For example,
the wave of NHS sites that were transferred over in the past few years
have been used to build homes under a first-time-buyers initiative,
where you effectively get deferred receipts as part of those schemes.
There are a range of ways in which English Partnerships already
operates in a sensible, long-term framework for getting the best
benefit for the community, for the public interest. The legal framework
within which it operates seems to allow it to do
that.
We are happy to
keep looking at this issue further because the CIH have raised it with
us, but our view at the moment is that English Partnerships currently
has a good framework, and that we should transfer that to the new HCA.
Part of this debate has been triggered by the fact that the wording
used in the explanatory notes is rather different and does not reflect
the text of the Bill itself.
Q
214
Sir
George Young:
Can we move on to social mobility?
Notwithstanding the devastating attack on my stewardship as Housing
Minister, I recognise that much that this Government have done in
housing is good. However, one of the failures has been on tenant
mobility. In 1997, the Government inherited a national mobility scheme
and social tenants, be they local authority or RSL, could move to other
parts of the country because somebody was operating a centralised
scheme. That collapsed, but this is not the time for a post mortem. The
Government had known for some time that that scheme was going to
collapse.
I was reading
what the Minister said yesterday, and I find it a very disappointing
response indeed. Apparently, all we are getting is that the Government
will be working with the Housing Corporation, key social landlords and
authorities across the country on how they can start to build a
national programme to give people better choice about where they can
move to. Do you agree that, given where we were four or five years ago,
we do not seem to have got anywhere since I secured a debate on the
subject a few months ago?
Yvette
Cooper:
I think that there is a problem about
mobility around the country. There is also a problem about mobility
even within areas. Even the national system that existed did very
little in terms of transfers, and there were a series of problems for
some time. Part of that was about the fact that we need more social
housing, which is an underpinning theme, but it was also about reduced
mobility even within local areas. There are three issues: one is
mobility within a district or a local area; the second is immediate
cross-border mobility and being able to move within a sub-region; and
the third is the national one.
The choice-based lettings
schemes, which have proved effective, provide a format for supporting
greater flexibility. It gives people a chance to choose, rather than a
system of allocations, where you are told by a housing officer,
“Right, it’s this one, that one or you’re
out” and there is no other choice at all. You actually have more
chance and choice to bid, and that provides an opportunity to have much
greater flexibility within areas. That is why we said that we want to
change the reasonable preference categories, particularly to support
those people who want to move from larger properties into smaller
ones.
There ought
to be much greater flexibility across local authority boundaries.
Within the sub-region, they ought to be able to operate sub-regional
choice-based letting schemes. That would give people much greater
mobility within the sub-region, which is where a lot of moves—in
particular, a lot of family moves—take place. That will be
supported by the £3.8 million that we announced in the statement
yesterday. That should allow all local authorities to be part of a
sub-regional choice-based letting scheme by 2010. That would give all
tenants the chance to be able to move within the sub-region. You are
right that that is not enough. You have then got to have the national
arrangements in place, but it seems to me that choice-based lettings,
rather than the traditional national model, are a better way. You still
give tenants a bit of choice. If they want to move from London to
Wakefield, for example, or Wakefield to London, you actually give
people choice. Unlike in the previous mobility arrangements, you build
it into the choice-based lettings system. That seems to me to be a more
sustainable long-term arrangement than the things that have been
attempted over the last few years. That is the arrangement that we want
to build on. We have work under way at the moment with the Housing
Corporation, but what we have not done—I agree with
you—is to set out a final framework that solves the problem in
any
way.
Sir
George Young:
I will not pursue this because we will be
able to do so in Committee, but I just make the point that 10 years ago
we had a national scheme. By 2010, all we will have is a sub-regional
scheme. I regard that as a disappointing step backwards. I think that
the
Government will have to come up with a better strategy for dealing with
tenant mobility than the one that they have at the
moment.
Q
215
Margaret
Moran:
I am afraid that we are co-conspirators, having
served on the homes board for many a year. What evidence base have you
for suggesting that the choice-based lettings scheme, even on a
sub-regional level, will do some of the things that are at the heart of
the Bill, such as encouraging more employment and employability,
sustainable communities, and so on? Where is the evidence base,
compared with the home scheme, for
example?
Yvette
Cooper:
The choice-based lettings scheme alone will
not attempt to do everything in terms of giving people access to
employment.
Margaret
Moran:
No, but mobility is about
that.
Yvette
Cooper:
Mobility is about a series of things. Some of
it is about being able to get priority. As well as changing the
reasonable preference for older people who want to move to smaller
properties, we want to consult on changing the reasonable preference
schemes for people who want to move for work reasons. That is about the
legislation and the legislative framework, not about the service that
underpins it.
What the
choice-based lettings scheme does that is different to the previous
scheme is that by 2010 you will be able to go into what is effectively
just like an estate agent and look at homes across the sub-region. A
choice-based lettings unit has just opened in Castleford in my
constituency. From the outside it looks just like an estate agent. You
have all of the pictures in the window of the different houses. That is
a very different way of choosing where you want to live. With that kind
of mobility linked to it, there will be a much stronger emphasis on
choice and on what it is that tenants want. To give tenants that kind
of choice within the sub-region seems to me to be very valuable. That
is not something that they had through the old
scheme.
I agree with
you, however, that what the old scheme did provide was much more
national mobility than is currently provided, because of the events
that we saw in the past 12 months. You and I can have a more detailed
conversation about that, because there were a series of particular
problems. The potential of getting this right is that we can build on
the choice-based lettings approach and on the idea of tenant choice,
rather than people having somebody else making the decisions for them.
Empowering tenants should be at the heart of increasing mobility within
the sub-region and at national
level.
Iain
Wright:
The precursor to all of this, which I am
going to have stamped on my head, is that we need to build more homes.
To ensure that the jigsaw works, the first point is whether we have
suitable accommodation for older people. Will they have the bungalows,
the adapted accommodation or whatever, in order to be able to move from
that three-bedroomed property that might help a family? Local
authorities are key in helping to assess those needs with their
strategic housing role. As we move forward, the agency will be
important in helping them step up to the
plate.
Q
216
Andrew
George:
I want to come back to what is perhaps my
obsession with English Partnerships and its industrial workshop role.
This is really supplementary to the answers that I received earlier. My
experience of English Partnerships from my part of the world is that it
develops workshops, particularly in areas where the private sector
would not otherwise provide them. Given its clear priority and the
budget priority of providing housing and addressing housing concerns,
to what extent will this agency be able to provide any kind of
attention to economic development issues and workshop development? I
appreciate what Mr. Wright said—they were warm words
and they were sincerely expressed—but is it possible to set out
a notional proportion of the overall budget that will go towards
industrial and workshop development in the next few years? Do you have
any idea what proportion of the available money will be directed
towards activities that are not directly related to housing? Of that
money, how much will go towards workshop development?
Iain
Wright:
I reiterate what I said to you about clause 2
about regeneration activities, although perhaps we can tease this out
more during the detailed, clause-by-clause deliberation. I hope I can
give you some comfort by saying that English Partnerships regeneration
programmes will be continued in the new agency. I cannot give you a
reassurance in terms of a precise proportion, but this will certainly
be an important part of what the agency
does.
Q
217
Andrew
George:
But would it not be better to separate out those
functions and find a more appropriate agency through which they could
be delivered, so that this body could establish its primary priority,
which is housing? The important work that English Partnerships does in
providing workshops in areas where the private sector cannot do so
could therefore continue and would not be lost in the overall
objectives of the HCA.
Iain
Wright:
No, I do not agree with that. I have
mentioned the agency and the local authority, but another part of this
key governance arrangement—this almost triangular
relationship—will be the RDAs, with the sub-national review and
the importance of local authorities in pushing economic development.
The agency will play a crucial role in that and will take over the
English Partnerships role. How that will be reconfigured as part of the
new governance arrangements under the sub-national review is something
that we will see as we move forward.
Q
218
Grant
Shapps:
Moving on to another issue, a question that has
come up repeatedly is whether the Bill deliberately tries to redefine
social housing and affordable housing. For the sake of absolute
clarity, I will read the definition in the Bill, because it appears to
change the definition that has made sense to the housing industry for
the past three or four years. Under the heading “Basic
principle”, clause 67(1)
states:
“In
this Part ‘social housing’ means...low cost rental
accommodation”.
That is
further defined in clause 68, which says that such
accommodation
“is made
available for rent...the rent is below the market rate,
and...the accommodation is made available in accordance with rules
for eligibility designed to ensure that it is occupied by people who
cannot afford to buy or rent at market rate.”
So the Bill defines social housing as
affordable housing is defined today. Can we clarify whether that is the
intention in the Bill or whether it is a drafting error?
Yvette
Cooper:
Eh?
Grant
Shapps:
Do you want a bit more clarity on
that?
The
Chairman:
Order. I think the
Minister would like a bit more clarity.
Q
219
Grant
Shapps:
At the moment, when we talk about social housing,
people understand what we are talking about, do they not? If you talk
about affordable housing, you are talking about all
kinds of housing, including registered social landlords, housing
associations and so on. Clauses 67 to 69 appear to redefine all housing
as social housing, and that matters, because it would confuse the
current understanding. Are you clear? I understand why it is
difficult.
Yvette
Cooper:
Let us be clear about the intention that we
have set out. The idea is simply to capture what social housing is and
to write it down; it is not in any way to change the definition of
social housing. We have been very clear about the amount of social
housing we expect to provide. My colleague, Mr. Wright, has
already said that the definition in clause 68(c) should be clarified
because it talks about the accommodation being made available
“to ensure that it is occupied by
people who cannot afford to buy or rent at market
rate.”
There will, of
course, be people who might be able to afford to rent in the private
rented sector, but who might need social housing because they have
other kinds of problems. They might need the stability that they cannot
get in the private rented sector. That is the first area where we think
that there should be an amendment to that clause, so that it refers to
people whose needs are not met in the market. I think your concern is
that we are somehow merging the definitions of low-cost home ownership
and social
housing.
Grant
Shapps:
Yes,
exactly.
3.45
pm
Yvette
Cooper:
We are clear that there is low-cost rented
accommodation and there is low-cost home ownership, but that they are
different. We have set different targets for them. Under the
comprehensive spending review, we will deliver 45,000 low-cost homes to
rent and at least a further 25,000 low-cost home ownership homes
through the Housing Corporation’s budget for the third year by
2010. As I said, we think an amendment is needed to clause 68(c) to
clarify the fact that there are two different kinds of housings. If
further amendments are needed to clarify things, obviously we are happy
to look at that, but our intention is simply to write down in the Bill,
for the purposes of regulation by the regulator, what already takes
place and what is already defined as low-cost rental and low-cost home
ownership accommodation provided by registered social
landlords.
Q
220
Grant
Shapps:
That is very helpful. So you do not intend to
change the definitions?
Yvette
Cooper:
No, not at
all.
Q
221
Mr.
Love:
Martin Cave, in his report,
recommended “domain-wide regulation”, yet the Bill
suggests a two-year delay for local authorities. When representatives
of the Local Government Association came before us, they suggested that
the LGA would support immediate regulation under Oftenant, saying that
if there is a delay it would prejudice its ability to influence the way
in which Oftenant developed. Even more surprisingly, they suggested
that some of the onerous regulation that comes through Oftenant would
be acceptable to them. Given that they are anxious to be in at the
beginning and they do not seem to be concerned about the onerous nature
of some of the regulation, would it not be sensible to bring it
forward?
Yvette
Cooper:
I made some comments on this as part of the
statement to the House yesterday. I was surprised that the LGA was keen
to adopt the powers as set out in the Bill. Obviously, local
authorities have a different performance management framework. In my
view, it has always been important to work through in detail the
interrelationship between the different governance structures. There
are different governance structures, and local authorities, which are
democratically accountable, have a different arrangement from
not-for-profit housing associations. Getting this right in a way that
does not make it more difficult and burdensome for local authorities in
terms of their relationship with the performance management framework,
but equally allows effective and parallel regulation, as applies to
housing associations, would take some time. If the LGA is keen to have
that kind of framework, it is obviously something that we could look at
again, but my feeling is that it would be quite difficult to
do.
We have therefore
worked on the assumption that it would not be acceptable to the House
simply to take enabling powers as part of the Bill and try to do that
through secondary legislation, because the enabling powers would be too
broad. We should therefore complete domain-wide regulation as part of a
second piece of primary legislation, which we hope will follow as fast
as possible. We are setting up a new task group, chaired by Ian Cole,
to look at getting the precise detail right, so that we can then
consult on it with local authorities, and try to get the follow-up
piece of legislation as fast as
possible.
Q
222
Mr.
Love:
Can you provide any reassurance about the concern,
with which I have some sympathy, that if the LGA is not in at the
beginning, Oftenant may be set in its ways by the time that it comes
in? Is there some way of involving it so that it has an
influence?
Yvette
Cooper:
That is why we are keen to get on with it as
rapidly as possible. Let us bear in mind the fact that Oftenant will
not start until April 2009. Clearly, there will be a transitional
period when everything is put in place, but if, alongside that, we are
consulting on the detail of the revised provisions to include local
authorities, and if there is a clear framework and everyone is content
with the direction of travel in the second phase and its extension to
local authorities before the new regulator begins its work, that will
allow the regulator to begin its work with a clear view about the
direction of travel and about what still has to be added. The local
authorities and the LGA can then be involved in work to establish the
regulator from the beginning. That is our intention, and that is why we
are accelerating the work
now.
The
Chairman:
Just a minute. Mr. Burt, do you have
anything to say on this
point?
Q
223
Alistair
Burt:
I just want clarification. We discussed the matter
with Iain Wright in the margins of our discussion on domain. He
indicated that there would be flexibility, because if progress was made
while talking to councils, an amendment could be introduced in the
House of Lords rather than in the Commons. Are you saying that, even
with the best will in the world, you genuinely do not think that the
pace will be sufficient to do that satisfactorily, that you are
thinking of separate legislation and that there is no way in which we
can include the matter in the Bill, which was what people would have
liked?
Yvette
Cooper:
If there were consensus on the matter and
everyone felt that we could get far enough fast enough, we would
obviously be happy to look at amendments later down the line. Before we
published the Bill, we looked at the possibility of enabling
legislation and dummy or open-ended clauses, but we thought that that
would not be right for Parliament. Had we done so, the Committee would
be pulling us apart, because we had not worked through the detail. If
there is agreement between everyone on how we can do it fast enough,
that will save us from drafting a second piece of legislation. However,
I want to be honest with the Committee about whether that is realistic.
It seems complicated to get it all resolved fast enough to be confident
about the Bill, but we remain
open-minded.
Q
224
Mr.
Love:
Can I now turn
to—
The
Chairman:
Order. I am sorry, I am trying to bring in
everybody and our proceedings may be curtailed by a
Division.
Q
225
Mr.
Love:
My question is still about regulation,
Mr. Gale.
Previous witnesses have said
that the use of the phrase, “the Government will direct
Oftenant”, and the possibility that Oftenant will direct
registered social landlords, have led to concern about the status of
RSLs as independent voluntary bodies, with connected concerns about
funding issues. Can you offer some reassurance, or will modest changes
be made to clarify the status of RSLs under the new regulatory
regime?
Yvette
Cooper:
While it is true that the Bill provides for
the Secretary of State to be able to direct the setting standards, it
does not provide for the Secretary of State to direct the regulator on
intervention. The regulator has to make his own decisions about
intervention.
Our
clear intention is that standards should be set out in advance. They
would have to be outcome-focused, not input-focussed. It has to be a
light touch
regulatory framework. As for the way in which the regulator needs to
operate, I am trying to remember the clause that sets out the
objectives of the regulator and the way in which they have to comply,
for example, with the regulator’s compliance code. It is about
ensuring objectives. Clause 86
states:
“Objective
10 is to regulate in a manner
which—
(a)
minimises interference,
and
(b) is
proportionate, consistent, transparent and
accountable.”
The
regulator’s compliance code is quite detailed about being the
ability to avoid burdens. That framework should bring reassurance to
housing associations. We have looked at the matter closely. I do not
think that anyone has any interest in changing the status of housing
associations. It is important that they should continue to be private
sector bodies that can borrow and raise funds in that way—that
is their status, that is how they have operated and that is how they
must continue to operate. Clearly, if people table amendments we shall
examine them, but that is our strong intention and we continue to
consider the
matter.
Q
226
Mr.
Love:
Without wishing to appear anti-European, there has
been some concern that, in the past, English Partnerships has been
caught up in state aid rules and differences of interpretation between
Europe and the UK. That is floated just as a throwaway line, but are we
sure that, the way it has been framed at the moment, not only the UK
authorities but any others that might have a locus on this would agree
to the continued independence of the
RSLs?
Yvette
Cooper:
The state aid rules issue is new to me. I am
not sure; all kinds of bodies can be caught by state aid
rules.
Q
227
Mr.
Love:
Yes, absolutely. It is a complex matter, but I know
that the gap funding that used to exist got caught in state aid rules
and nobody could quite understand why there was a difference in the
views taken. I am worried that somebody might take a different view,
while the UK authorities are satisfied. That might be something that we
can tease out
later.
Yvette
Cooper:
I am happy to look at that
further.
The
Chairman:
Just before we proceed, so there is no
confusion, I am going to extend the sitting until 4.15 pm under
Standing Orders, or until a Division if there is one before that. If
there is a Division, the knife will
fall.
Yvette
Cooper:
While you are clarifying things,
Mr. Gale, I think that I claimed earlier that it was 14
December. It is actually 13 December. I got the date a day wrong; I
think Mr. Shapps got the date about seven years
wrong.
The
Chairman:
All right, we have got the
message.
Q
228
Paul
Holmes:
The biggest problem for me with the Bill is not so
much what is in it, but the gaping hole of what is not. About 2 million
social tenants are with RSLs, and about 2 million to 2.5 million are
with councils because they have voted not to stock-transfer. Most of
the Bill and the funding for the next three
years is about RSLs and operating through them. The Bill seems to say
that the housing needs of the 200 authorities that have not
stock-transferred are less vital and urgent than those of the others.
How do you justify
that?
Yvette
Cooper:
I just think that that is completely untrue.
Look at funding for existing homes through the decent homes
programme—we announced yesterday £2.4 billion for council
homes, to the ALMOs across the country, over the next three years. That
is a substantial investment in existing council homes. On new build,
housing associations operate in every district in the country, so new
homes are being built by housing associations right across the country.
We want that to continue.
Both as part of the Bill and
part of the Green Paper, we have said that as well as housing
associations building homes—we want them to build more
homes—we want councils to be able to build homes. Not all
councils will want to do that or have the skills and capacity, and it
will not be right for all of them to do so, but wherever they can we
want them to be able to bid to the Housing Corporation as well. That is
why we have already made some changes that we were able to make without
legislation, so some bids have come forward to the Housing Corporation
already from councils, but we want to make it possible for more to do
that. That is why we have made some changes to the housing revenue
account—to make it much easier for them to do
so.
Q
229
Paul
Holmes:
I will ask about the housing revenue account
shortly, but on the private venture companies that you want councils to
set up—there are 14 hand-picked experiments—the impact
assessment for the Bill states that that will be about 2,500 extra
houses.
Yvette
Cooper:
Are you talking about local housing companies
now?
Yvette
Cooper:
I think that that is different from councils
building council
homes.
Q
230
Paul
Holmes:
Then in terms of the money for the next three
years, your written statement yesterday said that £8.4 billion
would go to the RSLs, £2.4 billion to the ALMOs—only 60
of 64 authorities that still run their own houses—and the 140
authorities that are directly managed would get a share of less than
£2 billion along with the private sector. Clearly the weight of
funding and intent is still against the half of the country where
people are council tenants and most of the social housing is provided
through the
council.
Yvette
Cooper:
The budgets that you are describing do
different things. The £8 billion is about new build—it is
about building new homes, and as a result of the changes that we have
made, for the first time local councils can come forward to bid for
that money for new build. A lot of that money will be going to housing
associations building in the areas where councils still own the stock,
so there will still be new social housing in those areas for people in
those local communities, whether it is being built by councils or by
housing associations and whether or not they have transferred their
stock or have an ALMO. They should all be able to benefit from that
£8 billion new build money.
The
£2.4 billion ALMO money is for refurbishing existing homes to
bring them to the decent homes standard, so that is a different budget
and will go directly to ALMOs to refurbish their own stock, not to
housing associations. It is going directly from the taxpayer to ALMOs
for their
refurbishment.
It
being
Four o’clock
,
The Chairman
, pursuant to Standing Order
No. 83C(11) (Programming Sub-Committees)
,
deferred
adjourning the
Committee.
Q
231
Paul
Holmes:
The ALMO refurbishment, therefore, still totally
excludes the 140 authorities that are not ALMOs. Are you saying that at
the end of next year and the years after that, when we look at the
£8.4 billion that has gone to RSLs, we will see that it has been
evenly spread across the country and not focused on the areas where the
RSLs have most of their housing stock already?
Yvette
Cooper:
You would not expect there to be any
relationship between the funding for new build and the issue of whether
local authorities have done a stock transfer, because the funding for
new build ought to reflect the priorities of the regional housing
boards with regard to their advice about low-cost home ownership and
how much social housing there should be. Sometimes, they will also set
priority areas and we would then expect bids to come in from all areas,
regardless of what decisions the councils have made about their own
stock and whether they are ALMOs. We also want more councils and ALMOs
to come forward with bids, so that gives them greater flexibility than
they have had
before.
Q
232
Paul
Holmes:
Well, that is one to watch over the next year or
two. Clause 269 of the Bill will give the Secretary of State the power
to alter how the HRA works and, as you have said in other statements
and on Second Reading, the intention is that there will be some pilots
around 2009 to 2011—there are some paper pilots at the
moment—and hopefully that would start to roll out around
2010-12. Therefore, there is not much for the next three or four years
for the direct management authorities, but a hope of something further
down the road.
Let
us say that 75 per cent. of directly managed councils
are in positive subsidy. That is to say that they are losing rent money
to the Government to spend elsewhere, as Chesterfield does. If, after
2011, those experiments have worked, councils can then start to keep
their rent money and their right-to-buy money. That, as you have argued
every time we have talked about it, would obviously have a big impact
on the 25 per cent. of directly managed authorities which
are in negative subsidy and which get money from the rest of the
councils. What will you do to plug that gap in four year’s time
when those pilot studies come into wider
use?
Yvette
Cooper:
What is actually happening with those pilots
and with the work on that is considerably more complex because you have
to take account of some of the wider, redistributive issues embodied in
the HRA at the moment. The benefit of the HRA is that it encompasses
redistribution and takes account of the complex history of the way in
which council homes are funded in different areas. There are all kinds
of aspects of financing
and historical debt arrangements. There is also different need across
the country. So the upside is that the HRA tries to capture that. The
downside is that it makes it difficult for local authorities to take
sensible, long-term decisions about the management of their
stock.
That is why
we have been doing those pilots and the approach so far has been to see
whether a situation could be envisaged in which areas could effectively
opt out of the HRA bit by bit and whether an arrangement that was fair
could be worked out so that, as they did so, all the areas that
benefited simply opted out and all those that lost ended up being
inside and lost out further.
We think that the results of
those pilots raise even more complexities and that might not be the
right way to do it and that is why we have set up the overarching
review of the HRA to look more widely at the whole thing. That was part
of the statement that I made yesterday. We want to keep the pilots
moving forward, because we think that that might be one way to do it,
but you need to take account of the long-term interaction with other
areas and whether or not they should be contributing or need additional
support in order to do so. I realise that that was not a completely
clear
answer.
Q
233
Sir
George Young:
Following Mr. Love’s
point, have you shown the Office for National Statistics the Bill and
asked whether the Bill will keep the housing associations in the
private sector? They are the custodians of the rules.
Yvette
Cooper:
We have had considerable discussions with the
Treasury. I have asked about potential arrangements for taking advice
from the ONS in advance of the Committee stage, as opposed to the
normal approach in which the ONS gets asked afterwards. It would be
helpful to have its advice in advance, and I have asked for
it.
Q
234
Sir
George Young:
Not half. Finally, when will you appoint the
shadow chief executive and the shadow board of the
HCA?
Yvette
Cooper:
We intend to appoint the shadow chief
executive as soon as possible, and we will let the House know as soon
as we are able to. We want the shadow chief executive to set up what
will effectively become a transition team to draw up more details. We
have not taken a final decision on when the board should be
established, but there are considerable advantages to having a shadow
board up and running some time before the agency is in place from April
next year.
The
Chairman:
We are heading towards a Division. Minister, I
thank you and your team for coming and giving evidence this afternoon.
We have not run out of steam, but we have just about run out of time. I
thank members of the Committee for their courtesy and attendance, and
may I wish all of those whom will we not see before, a happy
Christmas.
Further
consideration adjourned.—(Liz
Blackman.)
Adjourned
accordingly till Thursday 10 January at Nine
o’clock.
