Clause
216
Social
housing ombudsman
compensation
Question
proposed, That the clause stand part of the
Bill.
Sir
George Young:
The clause deals with the housing ombudsman,
and it is good to see that the arrangements have been plumbed into the
Bill. The letter that I referred to a few moments ago, which I would
like to quote but cannot because it is with the Official Report,
raised the specific matter of the title, “social housing
ombudsman”. There were two points. First, the official
designation is “housing ombudsman”; the Housing Act 1996
calls it that. Secondly, on a related point, the housing ombudsman
service extends outside social housing and has a certain competence in
the private rented sector. Whether or not the Minister has seen the
letter, I am confident that it is somewhere in his Department. If there
is substance in those points, will he consider amending the title of
the clause on Report to delete the word
“social”?
Mr.
Wright:
Yes, I am aware of the issue, and it is my
intention to amend
accordingly.
Question
put and agreed
to.
Clause 216
ordered to stand part of the
Bill.
Clause
217
Imposition
Amendments
made: No. 275, in clause 217, page 80,
line 39, leave out
‘and’.
No.
276, in
clause 217, page 81, line 1, at
end insert ‘, and
( ) any interest
or additional compensation which, by virtue of section 220(2), is
payable in the event of late
payment.’.
No.
277, in
clause 217, page 81, line 1, at
end insert—
‘(2A) The notice
may require the registered provider to publish information about the
compensation award in a specified
manner.’.
No.
278, in
clause 217, page 81, line 1, at
end insert—
‘( ) The notice
must explain the effect of sections 220(1) and (3) and
221.’.—[Mr.
Wright.]
Clause
217, as amended, ordered to stand part of the
Bill.
Clause
218
Warning
Amendments
made: No. 279, in clause 218, page 81,
line 17, at end
insert—
‘( ) Before giving a
pre-compensation warning the regulator must consult the person
appointed by virtue of section 120 as the ombudsman for the scheme of
which the registered provider is a
member.’.
No.
280, in
clause 218, page 81, line 23, at
end insert—
‘( ) A
pre-compensation warning
must—
(a) refer to
section 121 (voluntary undertaking),
and
(b) indicate whether or to
what extent the regulator would accept a voluntary undertaking instead
of, or in mitigation of, awarding
compensation.’.
No.
281, in
clause 218, page 81, line 25, after
‘224’ insert ‘,
226’.—[Mr.
Wright.]
Clause
218, as amended, ordered to stand part of the
Bill.
Clauses
219 to 222 ordered to stand part of the
Bill.
Clause
223
Management
tender
6.30
pm
Mr.
Wright:
I beg to move amendment No. 282, in
clause 223, page 82, line 36, leave
out second ‘the’ and insert
‘a’.
The
Chairman:
With this it will be convenient to discuss
Government amendments Nos. 283 and
284.
Mr.
Wright:
Clause 223 gives the regulator the power
to require a registered provider to put out to tender
some or all of the management functions of the provider related to
social housing. Clause 224 is supplemental, stating that the regulator
must give notice before requiring the tender of management functions,
specifying the grounds on which action might be taken, warning that the
regulator is considering action and explaining the
effects.
Government
amendment No. 282 clarifies that a selection panel, organised by the
registered provider concerned, may be constituted each time—I
stress “each”—that the regulator imposes a clause
223 management tender on a provider, rather than
there being one selection panel to select the management organisation
whenever the regulator imposes a clause management tender on a
provider.
Government
amendment No. 283 adds notices under clause 226 to
the list of pre-enforcement warning notices with which the clause 224
notice can be combined, on management transfer following an inquiry.
The amendment ensures consistency between different provisions of the
Bill that refer to different combinations of warning notices.
Government
amendment No. 284 is minor. The regulator already has to send to the
Homes and Communities Agency a warning notice under clause 223(2), but
under the amendment it must send a copy of its final decision to impose
a requirement under that subsection. That is a sensible requirement, as
the agency remains informed for its own purposes of the state of play
in respect of the registered provider, which may be an applicant for
financial assistance.
I hope that I have made matters
clear, and I hope that the Committee will accept the
amendments.
Amendment agreed
to.
Clause 223,
as amended, ordered to stand part of the
Bill.
Clause
224
Section
223:
supplemental
Amendments
made: No. 283, in clause 224, page 83,
line 22, after ‘218’ insert ‘,
226’.
No. 284,
in
clause 224, page 83, line 28, at
end insert—
‘( ) If the
regulator imposes a requirement it must send a copy to the
HCA.’.—[Mr.
Wright.]
Clause
2
24, as amended, ordered to stand part of the
Bill.
Clause
225 ordered to stand part of the Bill.
Clause
226
Section
225:
supplemental
Mr.
Wright:
I beg to move amendment No. 285, in
clause 226, page 84, line 32, leave
out ‘, 228 and 232.’ and insert ‘and
228.’.
The
Chairman:
With this it will be convenient to discuss
Government amendments Nos. 286 and
287.
Mr.
Wright:
The amendments are minor and technical. I
understand that the Committee has had notice of what they will
do.
Amendment
agreed
to.
Amendments
made: No. 286, in clause 226, page 84,
line 32, at end
insert—
‘( ) In imposing a
requirement the regulator must have regard to views
of—
(a) relevant
tenants,
(b) the registered
provider,
(c) the HCA,
and
(d) if the regulator thinks
it appropriate, any relevant local housing
authority.’.
No.
287, in
clause 226, page 84, line 32, at
end insert—
‘( ) If the
regulator imposes a requirement it must send a copy to the
HCA.’.—[Mr.
Wright.]
Clause
226, as amended, ordered to stand part of the
Bill.
Clause
227
Appointment
of
manager
Mr.
Wright:
I beg to move amendment No. 288, in
clause 227, page 84, line 42, after
‘appoint’ insert ‘an individual
as’.
The
Chairman:
With this it will be convenient to discuss
Government amendments Nos. 289 to
291.
Mr.
Wright:
Amendments Nos. 288 to 291 are again technical and
minor. Amendments Nos. 288 and 289 clarify the power in clause 227 that
relates to strengthening a registered provider by the appointment of an
individual special manager rather than an organisation providing
management services. If the regulator wanted the provider to appoint an
organisation to manage social housing, it could require a tender under
clause 223, or transfer to another provider under clause 225. Where a
special manager is appointed under clause 227, clause 228 requires a
pre-enforcement warning notice to be served.
Amendment No.
290 enables that notice to be combined with other pre-enforcement
action warning notices. It ensures consistency between different
provisions in the Bill, each of which refers to combinations of warning
notices. Amendment No. 291 keeps the HCA aware of the position on
enforcement at a registered provider. It requires the regulator to
notify the agency of the regulator’s appointment of a special
manager under clause 227(2)(a), or its requirement under clause
227(2)(b) that such a
manager be appointed by the registered provider. I hope that hon.
Members will accept the amendments.
Amendment agreed
to.
Amendment
made: No. 289, in clause 227, page 84,
line 43, after ‘appoint’ insert ‘an
individual as’.—[Mr.
Wright.]
Clause
227, as amended, ordered to stand part of the
Bill.
Clause
228
Section
227: supplemental
Amendments made: No.
290, in clause 228, page 85,
line 34, leave out ‘, 226 and 232.’ and
insert ‘and
226.’.
No. 291,
in
clause 228, page 85, line 34, at
end insert—
‘( ) The
regulator must notify the HCA of an appointment or requirement under
section 227(2).’.—[Mr.
Wright.]
Clause
228, as amended, ordered to stand part of the
Bill.
Clause
229
Transfer
of
land
Mr.
Wright:
I beg to move amendment No. 292, in
clause 229, page 86, line 3, leave
out ‘used for social
housing’.
This
is another technical amendment that permits the regulator to transfer
the land of a non-profit registered provider. This is an existing power
used only in the most serious cases following an inquiry. The amendment
makes it clear that, if the regulator transfers land on the basis that
it would be better managed by someone else, it must take into account
not only whether the social housing will be better managed but, if land
other than social housing is being transferred, whether that land would
be better managed too. It seeks to make the land transfer power
effective by allowing for the transfer of all the land and therefore
the business of the failing provider. I hope that hon. Members will
accept the amendment.
Amendment agreed
to.
Clause 229,
as amended, ordered to stand part of the
Bill.
Clause
230 ordered to stand part of the
Bill.
Clause
231
Removal
of
officers
Question
proposed, That the clause stand part of the
Bill.
Mr.
Raynsford:
This clause relates to the removal of officers.
It gives power to the regulator, in certain circumstances, to get rid
of the directors, trustees or committee members of not-for-profit
organisations. My question relates to the fact that the vast majority
of the cases under which the regulator has a power to act are to do
with technical matters where the person is either bankrupt or has been
disqualified under the Companies Act, or is incapable because of mental
disorder from performing his functions. Subsection (9) provides the
seventh case, which applies to
a
“person who is impeding
the proper management of the registered
provider”
—it goes
on to say—
“by
reason of absence or failure to
act”.
There have been
cases of people who, for a variety of reasons, have seriously
mismanaged housing associations. There was a strong case for their
removal but that was not because of absence or failure to act. It was
because of their malpractice. I am surprised that, unless I am
misreading the provisions, there does not appear to be any power to
enable the regulator to remove someone who has been capricious and
incompetent or who has been acting in a way that has squandered the
resources of the organisation. In earlier discussions, I referred to
the affairs of the Ujima housing association, where it appears that
there is quite strong evidence that there was mismanagement by
senior members of that association. That
mismanagement contributed to the financial difficulties that ultimately
led to the association having to be transferred into the ownership of
another one. This is not some theoretical case but a real-life
circumstance and a situation where there could well be a need for
judicious action on the part of the regulator to safeguard an
association whose long-term health and viability is being put at risk
by the misbehaviour of one or more members of its board or
committee.
I have two
questions. First, why is case 7 written in such restricted terms as to
apply only to people who are judged to have impeded
“the proper management of the
provider by reason of absence or failure to
act”?
Secondly, what
powers does the regulator have to deal with other directors or
committee members who are guilty of
mismanagement?
Mr.
Wright:
I appreciate what my right hon. Friend is saying.
However, I point out strongly to him that this power is an existing
power of the Housing Corporation, under the terms of the Housing Act
1996. As he will understand, this power is only used when it is clearly
necessary to protect the assets and the tenants. I go back to my old
friend, objective 10 in clause 86, which is designed to ensure that
this power is used in a “proportionate” manner. Also, the
regulator will be able to remove officers during the inquiry stage.
Hopefully in a moment, we will introduce new clauses 47 and 48, under
the terms of which the removal of officers can happen when the affairs
of an association have been mismanaged. We are improving the system as
it currently stands, but the bulk of the system—the main
foundation of it—is in the 1996 Act. I hope that that provides
some reassurance.
Mr.
Raynsford:
I cannot say that I am entirely reassured. In
earlier exchanges, my hon. Friend rightly highlighted the fact that we
are dealing with different circumstances from those that applied with
the Housing Corporation. He has justified the changes that have been
made elsewhere on the ground that the new regulator requires greater
powers because it does not have the direct sanction of withdrawing
grant, which is currently available to the Housing Corporation. I am
sceptical of the argument that this power is simply a carry-forward of
the powers available to the Housing Corporation. Secondly, if it is the
case that someone’s activities are seriously jeopardising the
viability of a housing association, surely it is better for the
regulator to be able to act swiftly rather than having to go through a
protracted inquiry, by the end of which it may be impossible to
safeguard the continued viability of that organisation.
If we are creating new
provisions that are appropriate to the new circumstances and to the new
regulator, we ought to take account of circumstances that are wider
than the very limited ones that are provided for under case 7. Will my
hon. Friend give further thought to this issue——not
today, because clearly we have to make progress, but before the Bill
completes its passage through this House?
Mr.
Wright:
I have a lot of respect for what my right hon.
Friend says, and will look at this issue again. However, as I have said
before, under the current regulatory regime, the Housing Corporation
has powers to intervene when there are serious problems with a
regulated body. The lenders have insisted on that, quite rightly,
largely in regard to mismanagement or misconduct. I suggest that these
powers are mainly appropriate in only the most extreme cases. The new
regulatory regime will try to solve housing management problems at a
much earlier stage. It will intervene earlier and maybe not in such
extreme circumstances.
I am sad that the hon. Member
for North-East Bedfordshire is not here, but he is muddled on the
modern regulatory regime. Intervening earlier will help to stop
systemic problems with services to
tenants.
6.45
pm
My right
hon. Friend will, I think, agree with me that the
sector should be compliant with recent developments in improving
regulations. For example, the Macrory report suggested a number of
intermediate intervention steps, which we are proposing, while at the
same time making sure that the existing powers are there, as I said
before. However, I hope that the regulator would not have to intervene
at such a late
stage.
Question put
and agreed
to.
Clause 231
ordered to stand part of the
Bill.
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