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.
Before I do, however, I should
tell the Committee that I spent the weekend on the internet
looking—sad man that I am—at the report of the Committee
stage of the Health and Social Care (Community Health and Standards)
Act 2003. My right hon. Friend was an excellent member of that
Committee, which discussed
foundation hospitals, and I remember with great interest his comments
about public sector classification. He also contributed to an
Adjournment debate about public sector classification in July 2004. I
have done my research quite well over the weekend and I am extremely
apprehensive about discussing public sector classification with at
least two fantastic experts on the issue—my right hon. Friend
and the right hon. Member for North-West Hampshire. However, I will do
my best. 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.
| 
