Housing and Regeneration Bill


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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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