Clause
178
Supplemental
Mr.
Raynsford:
I beg to move amendment No. 50, in
clause 178, page 69, line 21, leave
out subsection (1) and
insert—
‘(1) The regulator
may exercise its powers as set out in Chapters 6 and 7 in order to
secure the proper management of the affairs of a registered provider.
In considering whether mismanagement or misconduct has occurred, the
regulator may have regard (among other matters) to the extent to which
the standards are being or have been
followed.’.
The
Chairman:
With this it will be convenient to discuss the
following amendments: No. 347, in
clause 223, page 82, line 22, leave
out paragraph (a).
No.
348, in
clause 225, page 83, line 34, leave
out paragraph
(a).
Mr.
Raynsford:
The Committee is probably relieved that this is
the last group of amendments that I shall move. It tidies up one of the
remaining concerns about the specific powers of the regulator, and how
the regulator will look at standards and use evidence of a failure to
meet standards as a basis for intervention with a failing provider. It
is important for the regulator to have this power. It is right that the
regulator should intervene if a provider has not met proper standards
and that has resulted in substandard management, misconduct or other
unfortunate circumstances that adversely impact on tenants or possibly
on public
finances.
There is no
question about the importance of a regulatory regime that allows
intervention. There is, of course, a question as to whether the
regulatory regime is proportionate, encourages good practice and avoids
the worst type of tick-box mentality that simply wants people to say
that they have done certain things in order to satisfy the regulator
that standards have been
met.
The purpose of
amendment No. 50 is to specify that the regulator, in exercising his
powers to secure the proper management of the affairs of a registered
provider, may have regard, among other matters, to the extent to which
standards have or have not been followed when deciding whether
misconduct or mismanagement have occurred. That seems to be a sound
basis for the regulator reaching a judgment about the need to intervene
or to take action to remedy a failure without the risk of becoming
unduly prescriptive on the one side or unduly tokenistic—the
tick-box mentality that I already described—on the
other.
The other two
amendments, which are about management tenders, are designed to leave
out in clauses 223 and 225 the provision that states that a section
applies if
“a registered
provider has failed to meet a
standard”
because
it simply creates as the test the fact that a standard has not been
satisfied. There is the danger, as I said, that people will look solely
at the extent to which the letter of the provision has been satisfied
when determining whether there has been a failure. Unfortunately, it
will probably lead to a more mechanistic, more tokenistic approach to
regulation than I would
like.
The purpose
of the amendments is to delete the automatic
provision for intervention if there has been a failure to meet a
standard. Instead, there is a wider provision for the regulator to have
regard to the failure to meet a standard in deciding whether
mismanagement or misconduct have occurred; therefore, there is a need
for intervention.
I am
sure that my hon. Friend the Minister will say that
the amendments are unduly restrictive because they retain the tests of
mismanagement and misconduct that are part of the current regime. I
believe that those tests are important because, ultimately, regulation
should not be about simply seeing whether people satisfy a
particular test and ticking the box, but seeing whether they are
managing properly and effectively, and are not guilty of
misconduct. I have not
tabled the amendments with any great expectation that they will be
accepted, but I hope that they reinforce the case that I have made that
the whole regulatory framework needs to be reviewed to ensure that we
have the right balance between effectiveness on the one side and
appropriateness and proportionality on the other. For the reasons that
I have outlined in previous debates as well as this one, I still think
that there are grounds for concern about the clauses in this section of
the Bill. I look forward to further discussion in due course on
amendments that my hon. Friend may wish to introduce on Report or at
subsequent stages to ensure that we have the best possible regulatory
framework.
Mr.
Wright:
I am keen to meet my right hon. Friend’s
expectations, which is why I shall ask him to withdraw the amendments.
He is right that we are reviewing the matter, and, as I have mentioned
on several occasions, we are discussing the wording of this part of the
Bill with stakeholders. I hope that he will be involved in the process.
As he rightly suggested, we may make amendments in due course to
reflect any revision to our
position.
The
amendments are not strictly necessary, as the regulator’s powers
under the new system in the Bill are consistent, even modelled, if I
dare say that word, on modern regulatory practice. They are not
substantially different from those in the existing system. However, I
have made clear my intention to look at the matter again in close
co-operation with my right hon. Friend, on which basis I hope that he
withdraws the
amendment.
5.30
pm
Mr.
Raynsford:
I am satisfied with my hon. Friend the
Minister’s response and I beg to ask leave to withdraw the
amendment.
Amendment, by leave,
withdrawn.
Amendment made: No. 238,
in clause 178, page 69, line 26, at
end insert—
‘( ) Standards
may be expressed by reference to documents prepared by
others.’.—[Mr.
Wright.]
Clause
178, as amended, ordered to stand part of the
Bill.
Clause
179 ordered to stand part of the
Bill.
Clause
180
Survey:
supplemental
Mr.
Wright:
I beg to move amendment No. 239, in
clause 180, page 70, line 24, at
end insert—
‘( ) Proceedings
for an offence under this section may be brought only by or with the
consent of—
(a) the
regulator, or
(b) the Director
of Public Prosecutions.’.
This is a technical amendment
that replicates existing provision in sections 37(4) and 38(3) of the
Housing Act 1996. On that basis, I shall not detain the Committee
further.
Amendment
agreed
to.
Clause 180,
as amended, ordered to stand part of the
Bill.
Clause
181
Inspection
Mr.
Wright:
I beg to move amendment No. 240, in
clause 181, page 70, line 26, after
‘may’ insert ‘arrange for an inspector
to’.
The
Chairman:
With this it will be convenient to discuss the
following: Government amendments Nos. 241 to 247.
Government new clause
41—Inspector’s
powers.
Mr.
Wright:
The amendments in this group are largely technical
and consequential on the fact that the regulator need not carry out
inspections itself. Government amendments Nos. 240 to 243 clarify that
the regulator may appoint an inspector from his staff, as we think will
happen, and, as I mentioned in an oral evidence session, from others
including, for example, the Audit Commission.
Government amendments Nos. 244
and 245 are necessary to clarify that a report, which must be published
by the regulator, will be prepared by the inspector rather than by the
regulator itself.
Government amendments Nos. 246
and 247 add the Audit Commission, as well as anyone else whom the
Secretary of State “thinks appropriate”, to the list of
those who must be consulted when the Secretary of State authorises fees
to be charged. I anticipate and envisage that the Audit Commission will
carry out the vast majority of inspections in line with the
Government’s policy of limiting the number of inspectorates and
minimising bureaucracy and regulation whenever possible. I hasten to
add, however, that the regulator will decide on the matter.
New clause 41 gives the
inspector powers similar to those available to the Audit Commission
under the Local Government Act 1999, including to require documents, to
have access to premises, and to be afforded facilities in which to
carry out an inspection. Those powers are no more than the Audit
Commission relies on at present, so they should not present a new or
additional burden on regulated parties.
Amendment agreed
to.
Amendments
made: No. 241, in clause 181, page 70,
line 26, after ‘inspect’ insert
‘—
(a)
’.
No.
242, in
clause 181, page 70, line 27, at
end insert ‘, or
(b) the financial
or other affairs of a registered
provider.’.
No.
243, in
clause 181, page 70, line 27, at
end insert—
‘( )
“Inspector” means one or more members of the
regulator’s staff, or other persons, authorised in writing by
the regulator for the purposes of conducting the
inspection.’.
No. 244, in
clause 181, page 70, line 27, at
end insert—
‘( ) After
carrying out an inspection an inspector must produce a written
report.
( )
The regulator—
(a) must
give the registered provider a copy of the report,
and
(b) may publish the report
and related
information.’.
No.
245, in
clause 181, page 70, line 29, leave
out subsection (3).—[Mr.
Wright.]
Andrew
George:
I beg to move amendment No. 335, in
clause 181, page 70, line 33, leave
out subsections (4) to
(7).
This amendment
has the vocal support of my hon. Friend the Member for Montgomeryshire.
Its purpose is self-evident. RSLs would not wish to heap upon
themselves unnecessary costs, but owing to the way in which the clause
is drafted, inspection costs could be heaped at relatively short
notice. One does not know what those costs will be, and they could be
generated for purely vexatious but insubstantial reasons that might
none the less need to be satisfied at the expense of the RSL.
Given that some of the
inspections might need to be made at relatively short notice, they
cannot be budgeted for. All the arguments are self-evident. As
discussed previously, the clause will place RSLs at a disadvantage
compared with competitors that do not need to meet those regulations
and inspection costs. For all those reasons, RSLs will need reassuring
that if costs are to be applied, they will be proportionate. As
drafted, however, the clause does not provide that reassurance. It is
best, therefore, that we delete subsections (4) to (7) to ensure that
RSLs are properly protected from unplanned expenditure that in many
cases might be brought upon them in a climate of
over-regulation.
Mr.
Wright:
I disagree fundamentally with the amendment. On a
point of principle, it is right that a registered provider
suspected of failing to meet standards should be required to pay. The
alternatives, about which we could argue, are that the costs be met by
all registered providers or by the taxpayer. However, I disagree with
both of those. In some cases, it might not be in the interests of the
tenants for the registered provider to be charged the full costs of an
inspection, which is why we envisage that the regulator’s scale
of fees will provide for the size or turnover of the registered
provider and other circumstances affecting the provider’s
ability to afford the full
fees.
The hon.
Gentleman must agree that we need some controls on the power, which is
why we have proposed that the Secretary of State may authorise the
regulator to charge fees under clause 181(4) and that, before doing so,
he must also consult with the regulator, the Audit Commission and
persons representing providers, under subsection (6). Before charging
fees, the regulator must prescribe a scale of fees, on which it should
consult with the Secretary of State and persons representing providers,
as set out in subsection (7). I am fairly convinced that the regime as
set out in the Bill is appropriate and right in principle. On that
basis, I hope that the hon. Gentleman will withdraw his
amendment.
Andrew
George:
The Minister says that he disagrees fundamentally
with the amendment. However, he said that the
provision will apply if a housing association is
“suspected” of breaching regulations and
responsibilities. If there is a suspicion that it is failing to meet
its regulatory requirements, standards and obligations, it might find
itself the subject of perpetual and vexatious complaints and with the
perpetual expectation of having to meet the bills of
inspections.
Mr.
Love:
Taking up the point that the Minister made, if the
hon. Gentleman pushes the amendment to a vote, is it not yet another
example of a Liberal Democrat tax increase—and is it
funded?
Andrew
George:
I think that I will sidestep
that. There is a serious point here. If the Minister said that the
charges would be applied only if a housing association were found
guilty of the accusations behind the inspection, that would be
reasonable. I am concerned, however, that the regulator might be
perpetually inspecting a perfectly acceptable housing association that
provides an excellent service but is simply under the cosh of
complainants pursuing vexatious complaints against it, thereby forcing
it to meet excessive costs.
Lembit
Öpik:
Does my hon. Friend agree that if this is a
tax increase of any sort it is nothing compared with the outrageous tax
increase by stealth that the Minister proposed earlier in relation to
charging fees for the regulatory elements of the regulatory
body’s
activities?
Mr.
Wright:
Will the hon. Gentleman give
way?
The
Chairman:
Order. I somehow suspect that that has nothing
to do with the
amendment.
Andrew
George:
Thank you, Mr. Benton. I wondered
whether I might intervene in the debate. Given the nature of the two
interventions that I have taken, it is clear that the debate is being
undertaken in the context of a great deal of political
froth.
It is important
to seek reassurance from the Minister and the
Government that inspection charges will be applied
proportionately. I should think that it would be most appropriate to
apply them retrospectively if a housing association were found not to
have applied the regulations. If an inspection proves that a housing
association is operating properly, it is quite improper that it should
then have to meet the costs of the inspection.
Given the nature of the
Minister’s comments, I hope that he will indicate that
inspection costs will be applied proportionately. I hope also that
before Report he will reflect on my points about inspection costs
having a disproportionate impact on an RSL that is being over-inspected
or disproportionately inspected, particularly if it is found to be
meeting regulations. I am pleased that we have explored this issue and
I beg to ask leave to withdraw the amendment.
Amendment, by leave,
withdrawn.
Amendments
made: No. 246, in clause 181, page 70,
line 37, leave out
‘and’.
No.
247, in
clause 181, page 70, line 39, at
end insert—
‘( ) the Audit
Commission for Local Authorities and the National Health Service in
England, and
( ) such other
persons as the Secretary of State thinks
appropriate.’.—[Mr.
Wright.]
Clause
181, as amended, ordered to stand part of the
Bill.
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