Housing and Regeneration Bill

[back to previous text]

Mr. Raynsford: I beg to move amendment No. 345, in clause 172, page 67, line 29, leave out ‘compliance’ and insert ‘performance’.
The Chairman: With this it will be convenient to discuss the following amendments: No. 44, in clause 173, page 68, line 3, after ‘may’ insert
‘, in accordance with subsection (2) and subject to subsection (3),’.
No. 41, in clause 173, page 68, line 3, leave out ‘as’ and insert
‘for the purpose of protecting investment in social housing or protecting the interests of tenants and residents in social housing . These standards may refer’
No. 45, in clause 173, page 68, line 7, leave out from ‘may’ to the end of line 8 and insert ‘cover-’
Government amendment No. 229
No. 42, in clause 173, page 68, leave out lines 22 and 23.
No. 43, in clause 173, page 68, line 24, at end insert—
‘(3) In setting standards the regulator shall have regard (among other matters) to landlords’ contribution to the environmental, social and economic well-being of the areas in which their property is situated.’.
No. 47, in clause 174, page 68, line 27, at end insert—
‘(2) In setting standards, the regulator shall have regard (among other matters) to providers’ contribution to the environmental, social and economic well-being of the areas in which their property is situated.’.
Mr. Raynsford: We now reach a critical series of clauses that define the regulator’s powers. This is fundamental not just to ensure that we have an appropriate, effective and proportionate regulatory regime, which provides reassurance to tenants and safeguards in respect of public finance, but one that avoids unduly burdensome regulation or red tape. We also need to be absolutely confident that this regime, and specifically the chain of command that runs from the Secretary of State through the regulator to the regulated body, does not put at risk the non-public sector status of housing associations.
I referred to both those issues in my Second Reading speech of 27 November, at column 176, and they came up again on a number of occasions when we were taking evidence in the four evidence sessions on 11 and 13 December. In particular, we heard from David Orr, the chief executive of the National Housing Federation; from Mr. Julian Ashby of Tribal, and perhaps even more importantly, a major contributor to the Cave review; and Lord Best, a well known expert on housing matters—all of whom voiced concerns that the regulatory regime as defined in these clauses of the Bill might have the perverse consequence of putting at risk the non-public sector status of housing associations, so jeopardising their ability to raise finance to supplement the public finance put into social housing provision. The scale of the private finance that is currently available is enormous: between £30 billion and £35 billion has been raised to date, and without that capacity, the whole Government programme for expanding social housing in Britain will undoubtedly be unachievable. We are talking about something hugely important, and an obvious area of risk.
I have subsequently taken a delegation comprising the individuals whom I have mentioned, as well as other representatives of concerned housing associations to meet my right hon. Friend the former Minister for Housing, now the Chief Secretary to the Treasury, to expand on our fears and to suggest ways in which the Bill might be amended to address those concerns. I pay tribute to my right hon. Friend, as I do to my hon. Friend the Minister here in the Committee, for their very constructive engagement in discussing these issues, and their willingness to work through what are a number of very complex and difficult issues to ensure that we achieve the objectives that I believe that we all share of having an effective and proportionate regulatory regime that does not threaten the non-public sector status of housing associations.
I noted my hon. Friend’s clear statement this morning, when we were considering clause 118, that he did not want to see an unduly burdensome regime of regulatory diktat; I think that I got those last two words—“regulatory diktat”—right. I hope that I did not misrepresent his position. In that instance, he was opposing an Opposition amendment, and I hope that he will adopt a similar stance in responding to these amendments, which I have tabled in order to achieve the objectives that I have just outlined.
Let me run briefly through the amendments. Amendment No. 345 would leave out the word “compliance” in subsection (b) of clause 172, and substitutes the word “performance”, so rather than reading
“gives the regulator powers to monitor performance”,
the clause would read
“gives the regulator powers to monitor performance”.
I do not need to elaborate on the significance of that change. I am talking about a regulatory regime that is concerned not only with compliance with standards set, which can often produce a tick-box mentality and lead to unduly burdensome regulatory regimes, but one that aims to ensure high performance and to avoid unnecessary interference when the organisation is meeting those standards. However, it enables the regulator to take action when there is worry about the performance of an individual body subject to regulation.
12.30 pm
The recent unhappy affairs of the Ujima housing association, whose performance was clearly lamentable in many respects, has highlighted the importance of a regulatory regime that allows effective intervention when a housing association has not been managing its affairs well. I have absolutely no hesitation in endorsing such action. Indeed, the existence of a regulatory regime that has given confidence to lenders, tenants and members of the public has been fundamental to the success of the housing association movement over the past 30 or so years. In the event of problems, they will be dealt with effectively and tenancies will not be put at risk.
The transfer of Ujima’s properties to the London and Quadrant Housing Association Trust, a large and well-run association with a strong track record of taking over other associations in difficulty and improving on their performance, gives me optimism for belief that, with Ujima, we will see something similar—and I hope that we do. I also know that London and Quadrant wishes to maintain the specific character of Ujima, which was established specifically to serve the black and ethnic minority community. I hope that that character can be maintained under the new arrangements.
I represent an area in which Ujima held about 140 properties and I was struck over the past year and a half by the increasing number of complaints from its tenants about the poor standard of service from their landlord. It contrasted with the much higher standard of service that London and Quadrant gave to tenants living in literally neighbouring properties. The two associations were both involved in a recent development, the Rubicon development at Greenwich, which I am proud to say received an award at the London Planning Awards. It is a model of high-quality development of social housing. The London and Quadrant part of it has been exemplary. I have no doubt about the importance of monitoring performance, and that is why I am proposing the amendment that substitutes “compliance” with “performance”.
Amendment No. 44 is technical, so I shall pass straight on to amendment No. 41, which would leave out “as” in line 3 on page 68 of the Bill and insert the words
“for the purposes of protecting investment in social housing or protecting the interests of tenants and residents in social housing.”
That is the nub of my objective. It sets out what regulations should be about. I want to protect public investment in social housing and the interests of tenants and residents. That is absolutely fundamental to a good regulatory regime, and that it why it is important that it should be made clear at the outset that those principles are the purpose of the regulator’s activities.
Amendments Nos. 42, 43 and 47 deal with the environmental, social and economic well-being of an area. We have touched on that already, so I will not say much more now other than that it is right for the regulator to take account of that aspect of the performance of a registered social landlord—a body registered by the new regulator—but it is difficult to operate a regulatory regime that does not fall into the trap of becoming either tokenistic, involving a tick-box mentality, or unduly burdensome. The proposal emphasises the importance of looking at the contribution that registered landlords make rather than imposing standards and monitoring how far those standards have been complied with. It has a similar objective to the earlier amendment.
The amendments would clarify the key purposes of regulation, which is about protecting tenants’ interests and public finance. That would ensure that we had a proportionate, non-burdensome and non-bureaucratic style of regulation and, above all, avoid putting at risk the non-public sector status of housing associations by creating an unbroken chain of command from the Government to the regulated body. That is the purpose of the amendments, and I hope that my hon. Friend the Minister will be able to respond sympathetically, even if he cannot accept them, as I suspect will be the case.
Mr. Wright: I would argue that this is potentially the most serious and important group of amendments that we have discussed so far, certainly in terms of the possible consequences if we get things wrong. I vividly remember Lord Best’s evidence to the Committee in December, when he said that it was simply not worth getting public sector classification wrong, and I absolutely agree. As became clear from the excellent speech made by my right hon. Friend the Member for Greenwich and Woolwich on Second Reading and from contributions by Lord Best and others in our oral evidence sessions in December, this part of the Bill is arguably the most controversial of the lot. I am, however, satisfied that the changes that we are introducing in the Bill do not affect the sector classification of RSLs and I shall come on to that in some detail when I respond to my right hon. Friend.
Alistair Burt: I have just stepped in to give the Minister a break before what will probably be among the most difficult 10 minutes of his career, as he faces my right hon. Friend the Member for North-West Hampshire and the right hon. Member for Greenwich and Woolwich. In case he did not notice, however, this weekend was an FA cup weekend, and if he is saying as a representative of the alleged party of the people, that he spent his weekend on the internet checking the issues before us, instead of following the fortunes of our various teams, I am very surprised.
Ms Angela C. Smith (Sheffield, Hillsborough) (Lab): Hartlepool was not playing.
Mr. Wright: As my hon. Friend says from a sedentary position, Hartlepool United was not—it pains me to say this—involved in the FA cup on Saturday, although I will leave it to hon. Members to work out the reasons why.
I hope that you will not rule me of out order, Mr. Gale, but I should pay tribute before I go on to my right hon. Friend the Member for Pontefract and Castleford (Yvette Cooper), who has been promoted to Chief Secretary to the Treasury. She was an excellent Housing Minister, who pushed social housing to the very top of the political agenda. She was also a great boss and she will do a fantastic job as Chief Secretary to the Treasury. In addition, I think that the Minister for Housing, my hon. Friend the Member for Don Valley (Caroline Flint) will prove to be a fantastic successor. In paying tribute to her, however, I should point out that Hartlepool United is tonight playing Doncaster Rovers, which is her team, so I do not want her to have too good a start in her new ministerial position.
That said, let us move on to the extremely serious issue before us. I pledge to my right hon. Friend the Member for Greenwich and Woolwich that we are considering the entire structure of this part of the Bill, particularly in relation to directions and the standards system. That is largely in response to the concerns that he has raised, and I pay tribute to him for what he has done on the issue. I shall certainly consider the points that have been raised in these very thorough amendments when we table our own amendments at subsequent stages in our consideration of the Bill.
Some of the arguments relating to the powers given to the regulator in clauses 173 and 174 suggest that the regulator should not be able to set binding standards with which providers must comply. At present, the Housing Corporation issues guidance to registered social landlords, which, if approved by the Secretary of State, can be taken into account by the corporation in considering whether mismanagement or misconduct has occurred, or in exercising its powers to secure the proper management of the landlord’s affairs.
My right hon. Friend the Member for Greenwich and Woolwich and others believe that the regulator’s standards should merely be a matter to be taken into account in assessing whether there has been misconduct or mismanagement, rather than being directly enforceable. Indeed, the proposed amendment to clause 178 would achieve precisely that result.
I realise that this is not a stand part debate, but I want to go back to first principles and set out what we are trying to achieve. It is important to set out to hon. Members that the regulator will be operating in a different environment to that currently operated by the Housing Corporation. The Housing Corporation is responsible for paying significant amounts of grant—billions of pounds. While not explicitly described as an enforcement power in the Housing Act 1996, the possibility of withholding grant if the corporation has serious concerns about the management or performance of a registered social landlord is arguably the most important weapon in its enforcement armoury.
Mere guidance may have a much stronger effect on an RSL’s behaviour under the current Housing Act system, where non-compliance could have serious financial consequences. That particular unstated enforcement power will not be available to the new regulator, since, as we are all aware, the Housing Corporation’s grant and investment functions are to go to the HCA instead.
Mr. Raynsford: I am following my hon. Friend’s argument closely. He rightly focuses on the fact that the new regulator will not have any direct power to withhold grant, unlike the Housing Corporation, but from an earlier series of debates, when we were considering linkages and liaison between the HCA and the regulator, we established that it would be proper for those two bodies to talk to each other. I would hope that in the event that the regulator had concerns about the performance of an RSL, it would draw them to the attention of the HCA, which could then have the effect that he has described under the current regime, of leading the HCA to withhold grants. While I hear his point, I do not think that it is going to be a completely black and white issue of powers that used to exist no longer existing and the sanction of withholding grant no longer being in any way available.
Mr. Wright: I absolutely agree with my right hon. Friend’s comments. Clause 102(3), on the terms of direction that the regulator can provide to the HCA, will be important. Nevertheless, I return to the point about the splitting of the regulatory and investment functions, which are currently under the one roof of the Housing Corporation. Although I fully understand where my right hon. Friend is coming from, I would suggest that the circumstances in which the regulator will be able to prevent the agency from paying grant are possibly narrow, although there will be discussions. Arguably, that is the implicit point of the split between regulation and investment. On that basis, the regulator may need a stronger basic framework of standards with which registered providers must comply, although I am clear that the regulator must be able to enforce compliance with its standards.
I am also clear about the role of the Secretary of State. In the context of the Bill, the Secretary of State should and would only ever issue strategic directions on standards. As Martin Cave pointed out in his review, the emphasis should be on rents, on physical maintenance and conditions, and on tenant engagement and consultation. I envisage that those will be the topics where the weight of Government interest—I use that phrase carefully—would lie.
Previous Contents Continue
House of Commons 
home page Parliament home page House of 
Lords home page search page enquiries ordering index

©Parliamentary copyright 2008
Prepared 30 January 2008