The
Committee consisted of the following
Members:
Austin,
Mr. Ian
(Parliamentary Under-Secretary of State for
Communities and Local
Government)
Brown,
Lyn
(West Ham) (Lab)
Cruddas,
Jon
(Dagenham) (Lab)
Duddridge,
James
(Rochford and Southend, East)
(Con)
Farrelly,
Paul
(Newcastle-under-Lyme)
(Lab)
Goldsworthy,
Julia
(Falmouth and Camborne)
(LD)
McCafferty,
Chris
(Calder Valley)
(Lab)
McGuire,
Mrs. Anne
(Stirling)
(Lab)
Main,
Anne
(St. Albans)
(Con)
Malins,
Mr. Humfrey
(Woking)
(Con)
Meacher,
Mr. Michael
(Oldham, West and Royton)
(Lab)
Shapps,
Grant
(Welwyn Hatfield)
(Con)
Smith,
Mr. Andrew
(Oxford, East)
(Lab)
Soames,
Mr. Nicholas
(Mid-Sussex)
(Con)
Teather,
Sarah
(Brent, East)
(LD)
Turner,
Mr. Neil
(Wigan)
(Lab)
Simon Patrick, Committee
Clerk
attended the
Committee
The following also
attended, pursuant to Standing Order No.
118(2):
Jackson,
Mr. Stewart
(Peterborough)
(Con)
Eighth
Delegated Legislation
Committee
Wednesday
10 March
2010
[Jim
Sheridan in the
Chair]
Draft
Housing and Regeneration Act 2008 (Consequential Provisions) Order
2010
2.30
pm
Mr.
Nicholas Soames (Mid-Sussex) (Con): On a point of order,
Mr. Sheridan. May I raise as a matter of courtesy the late
arrival of the Minister? This is the second such Committee that I have
sat on which the Minister has entered when it was almost
beyond recall. I would be grateful, Mr. Sheridan, if you
would remind the Whip and the Minister that it is a courtesy to the
Committee that they appear properly briefed and on
time.
The
Chair: I am sure that that point will be taken on board by
both the Minister and the
Whip.
The
Parliamentary Under-Secretary of State for Communities and Local
Government (Mr. Ian Austin): I beg to
move,
That
the Committee has considered the draft Housing and Regeneration Act
2008 (Consequential Provisions) Order
2010.
The
Chair: With this it will be convenient to consider the
draft Housing and Regeneration Act 2008 (Registration of Local
Authorities) Order
2010.
Mr.
Austin: I would like to apologise to you, Mr.
Sheridan, the whole Committee and of course the Government Whip for my
late arrival. I am not sure that it is the second
occasion
Mr.
Soames: It is the second
occasion.
Mr.
Austin: If it is, there we are and I am sorry about that,
as I am sorry that I was late
today.
The
two orders were laid before the House on 20 January 2010.
Their overall purpose is to allow the new regulatory framework for
social housing regulation to be brought into effect on 1 April 2010.
During the passage of the Housing and Regeneration Act 2008, there was
cross-party support for enabling the Tenant Services Authority to
regulate local authorities. Few in the housing world, including local
authorities and tenant groups, have departed from the view that it
makes sense to regulate local authorities and housing associations
under a common framework. Indeed, we responded to cross-party pressure
by including an enabling power in that Act to bring forward the local
authority measure that we are considering
today.
The
regulatory reforms were originally proposed in Professor Martin
Caves report Every Tenant Matters, published in
June 2007, which recommended that a new independent social
housing regulator should be
established and that it should regulate all social housing landlords.
The Government implemented Professor Caves recommendations
through the 2008 Act, which provided for the establishment of a new
independent regulator and the creation of a new cross-domain regulatory
framework. The new regulatorthe Tenant Services
Authoritycame into being in December 2008, but has, on a
transitional basis, continued to regulate housing associations using
the regulatory powers that were previously exercised by the Housing
Corporation. That transitional period has allowed time for the TSA to
develop new performance standards in consultation with tenants and
landlords, and the final standards will be issued shortly. We now seek
Parliaments approval to bring the new regulatory framework
provided by the 2008 Act into effect. That is the overall aim of the
two
orders.
The
Housing and Regeneration Act 2008 (Registration of Local Authorities)
Order will enable the Tenant Services Authority to register council
landlords so that they are subject to regulation. The 2008 Act provides
the legislative framework under which the new regulatorthe
Tenant Services Authoritywill operate from April 2010. The Act
currently prevents the TSA from registering council landlords. The
order-making power in the
Act
Mr.
Soames: I would be grateful if the Minister could speak
up. It is difficult to hear him, as he is speaking into his notes. Will
he explain why he believes that we needed yet another regulatory body
set up by the Government? Given the importance of the legislation, it
should presumably interest tenant organisations, so why did only 11 per
cent. of the tenant organisations in this country bother to respond to
the consultation? To what does he attribute
that?
Mr.
Austin: The Tenant Services Authority is taking on the
powers of registration that the Housing Corporation previously had. We
consulted widely on the establishment of the new arrangements and those
were the responses that we received. I will pick up on that point
later. In addition to my apology for my lateness, I apologise for not
speaking loud enough for the hon.
Gentleman.
The
Act currently prevents the TSA from registering council landlords. The
order-making power in the Act allows for the removal of that
prohibition so as to permit their registration. The power is a broad
one, as it provides that regulations may deliver any other changes to
legislation in connection with council landlords registration.
That registration means that council landlords who retain some or all
of their housing stock, including in cases in which that stock is
managed by others, would be subject to regulation.
The Act dealt
only with the regulation of private providers of social
housing, such as housing associations. We made it clear during the
passage of the Act that we would later legislate to apply the
regulators powers in the Act, as appropriate, to council
landlords. As I noted earlier, section 114 was included in the Act to
facilitate that, following cross-party
support.
The
principle of having a single regulator for all social housing has
received consistent and widespread support from both councils and
tenants. Our shared goal is to raise the standard of services for
tenants, no matter who their landlord is. The needs and experiences of
tenants will be central to the new regulatory framework
led by the TSA. Social tenants often have limited leverage in the
market; they cannot easily exercise the choice to move
into another home or to rent from another landlord. It is therefore
important to ensure that tenants are offered opportunities to be
involved in decisions that affect them and that they should have
recourse to the protection that regulation provides where they receive
an unacceptable level of service. The policy intent underpinning the
order is that the TSA should be provided with the powers necessary to
enable it to apply a common regulatory framework across all providers
registered with it, wherever
practical.
We
have also been clear from the outset that any new regulatory framework
operating under these powers should support the steps that we have
taken to strengthen local delivery and accountability through the local
performance framework. The TSA, in bringing forward its proposals for
social housing, has made it clear that it shares our aims to reduce
unnecessary burdens on local authorities. Our aim has been to minimise
substantive amendments to the 2008 Act to those cases where it
addresses fundamental differences between local authorities and private
providers. Where differences arise with regard to their role,
governance and wider performance management, our aim has been that they
should be addressed by the regulator through application of its
regulatory framework, rather than tailoring the Act by type of
provider. However, some tailoring of the Act and amendment of other
legislation is necessary in connection with the registration of local
authorities.
The
new regulatory framework, which would apply across all providers of
social housing, has standards at its core. The Act allows the regulator
to set standards on the matters that tenants care about the most. The
TSA consulted on its proposed standards between December 2009 and
February 2010. It described the outcomes that the regulator will want
to see delivered as well as any specific requirements that it is
expected to
meet.
The
TSA has made it clear that it wants to develop a new relationship
between landlords and their regulator through an emphasis on
co-regulation. Under its new approach, the main relationship would be
between landlord and tenant and would be one in which tenants help
shape, influence and monitor the service provided. A key element of
that would involve housing providers agreeing local standards with
their tenants to better reflect those areas of service that are
relevant to them. The regulator may require information of a provider,
order an inquiry or commission an inspection. Where the regulator
establishes that there has been a breach of standards or general
mismanagement, it would have recourse to a range of enforcement powers
to help ensure that tenants receive an acceptable level of
service.
Sarah
Teather (Brent, East) (LD): I mostly have queries about
the orders and will probably be able to deal with most of my points
through interventions. Will the Minister comment on the overlap between
the TSA and the comprehensive area assessment? How will the CAA feed
into the work of the TSA and vice
versa?
Mr.
Austin: I will deal with that point a little later. The
regulations are relatively simple in that they largely amend provisions
in the 2008 Act as necessary for the registration of council landlords.
The order provides
that council landlords that currently retain ownership of social housing
stock, regardless of their management arrangements, would be registered
with the regulator from the outset. Existing council landlords would
not therefore need to apply to be placed on the register. The order
inserts a new duty on the regulator so that it will co-operate with the
Audit Commission and, in particular, consult it on matters relating to
council landlords. This information will be important in informing its
regulatory approach and decisions on what action might be appropriate
where performance issues are
identified.
The
order does not apply the power in the Act that enables the regulator to
set financial management standards for housing associations. This is on
the basis that the financial governance of councils is already subject
to regulation through comprehensive area assessments. The intervention
powers granted to the regulator in the Act provide a suite of powers
that it could use to address poor performance in the housing
association sector. It is our intention that the same powers should
apply to councils, but only where those powers match the powers that
the Government hold to intervene in serious cases of underperformance.
In accordance with that principle, the order provides that powers to
impose fines on providers and order a landlord to pay compensation to
tenants should not be applicable with regard to councils. In addition,
the order would disapply powers to suspend and remove
officers.
Finally,
the order transfers the powers in the Housing Act 1985 to give consent
for the transfer of the management of a councils housing stock
to another provider from the Secretary of State to the regulator. We
propose that it should be for the regulator to ensure that the
management of social housing is efficiently and effectively run and it
will be consistent for it to determine the benefits, or otherwise, of
contracting out by a council of part or all of its landlord
functions.
I
now turn to the consequential provisions order, which is much more
routine in nature. The order makes consequential amendments to
primary legislation arising from part 2 of the 2008 Act, which
provided a new regulatory framework for social housing. These
amendments are a matter of technical necessity. Most fall into one of
two categories: amendments that reflect the replacement in England of
the term registered social landlord with
registered
provider of social housing
and amendments that
reflect the transfer of the Housing Corporations regulatory
functions to the TSA.
The TSA
currently regulates registered social landlords, commonly known as
housing associations. RSLs are non-profit, private sector bodies that
are independent of Government. As part of the new regulatory framework
that is due to be in place from April 2010, profit-making bodies will
be able to register with the TSA as wella change that was
recommended by the Cave review. The term registered social
landlord by definition refers to a body that is
non-profit-making.
Given that
profit-making bodies will be able to register after 1 April as well,
the 2008 Act introduced the broader term
registered
provider of social
housing,
or
registered provider for short, to denote bodies that
are registered with the TSA. To protect the existing non-profit status
of RSLs, the TSA will register non-profit
and profit-making providers separately. Therefore, we need to be able to
differentiate between types of registered provider. In particular, the
term
private
registered providers of social housing
will refer to all
bodies registered with the TSA that are not local authorities. The
term
non-profit
registered provider of social housing
will refer to those
private registered providers that are non-profit-making.
In amending
existing references in primary legislation to registered social
landlords, we have had to consider whether these legislative
provisions should in future apply to non-profit registered providers
only. Our general approach in the order has been to apply these
provisions to all registered providers of social housing. Our aim, as
far as possible, is for there to be a level playing field between
providers and that social tenants should not be any better or
worse off due to the status of their landlord. However, there are some
specific cases in which there are technical or policy reasons to apply
the existing references to RSLs to non-profit providers
only.
The second
category of consequential amendments is much more straightforward. The
amendments reflect the transfer of the Housing Corporations
regulatory functions to the Tenant Services Authority, or the regulator
of social housing as it is referred to in the legislation. In
conclusion, there was cross-party support for these proposals during
the passage of the 2008 Act. The aim is to ensure that all landlords
who provide social housing, whether housing associations or councils,
deliver high standards. We have listened to the Oppositions
views and included an enabling power in that Act to bring forward the
local authority regulations that we are considering today. I commend
these orders to the
House.
2.44
pm
Mr.
Stewart Jackson (Peterborough) (Con): Good afternoon,
Mr. Sheridan. I am sorry that I am not my hon. Friend the
Member for Welwyn Hatfield (Grant Shapps). He is much better known and
better looking than I am, but I will have to do. As my hon. Friend the
Member for Mid-Sussex said, it is nice of the Minister to grace us with
his presence, with his Parliamentary Private Secretary in a cameo role,
for the Committees
deliberations.
There
was a degree of consensus on the legislation in a purely technical
sense, but we do not believe that the Cave review has sufficiently made
the case for an extra level of bureaucracy. Let us bear in mind the
context of the orders. A huge Bill, covering the expenditure of
billions of pounds of public money, was introduced but not properly
scrutinised because of the Government Whips timetabling. The
Government were primarily responsible for that, because they tabled
more than 200 amendments to the Bill between Second Reading and Report.
As I recollect, because I served on the Committee that debated the Bill
with my hon. Friend the Member for Welwyn Hatfield, we only had an
opportunity to discuss the minutiae of housing revenue account and
other minor issues rather than have a proper debate on the efficacy or
otherwise of the TSA. That is the background as we consider these
orders.
For the
avoidance of doubt, a future Conservative Government will abolish the
TSA. We believe that what is being proposed in terms of the rationale
reveals a fundamental lack of trust in tenants and an opinion that they
cannot be trusted to work through properly elected boards with
professional officers with registered social landlords in terms of the
oversight facility. We also believe that in respect of the power to
extend the order to local authorities, it could be argued, if one was
playing devils advocate, that the best regulator is the voter,
who will judge the performance of that local authority as a
landlordor a registered social landlord, to use the new
namewhether they are delivering the goods at election
time.
We
will not be dividing the Committee and voting against this statutory
instrument, because it would not be appropriate to dance around
technical minutiae on the head of a pin, but our commitment is clear.
The performance of the TSA has not been good over the past 12 months or
so. It was the quango responsible for the extra bureaucracy laid upon
council tax payers and central Government taxpayers, which paid the
Audit Commission £1.8 million to carry out its basic audit
function. That body paid a public affairs consultancy £100,000
to arrange meetings with influential Ministers.
That is the
level of waste and duplicity that we see in that new body. It talks
about value for money, supporting tenants and core activities at the
front line, yet it spends significant amounts of public money on
wasteful activities, such as paying a lobbying firm to arrange meetings
with Ministers and paying £89,000 on a contract to
employ
a
human resources expert on a consultancy basis to advise on and oversee
the entire recruitment
process
of
its board, when in fact its board was made up of two constituent
predecessor bodies.
We can
therefore understand tenants concerns about the TSA. It comes
down to this: would you invent this body if you did not have to? In the
less benign financial regime that we are in at the moment, we have to
be mindful of bureaucracy and extra burdens on taxpayers and tenants
who want to see repairs, new build and accountability at the local
level. As my hon. Friend the Member for Mid-Sussex has alluded to, only
11 per cent. of the representative organisations that are elected
directly to speak for tenants took part in the significant consultation
exercise89 per cent. of them did not. I suspect that they were
cynical about the need for the
body.
I
do not decry the Governments rationale for wanting to improve
tenants democracy, accountability, quality of life and quality
of housingI understand all that. But is establishing a new body
the best way to do so? We believe that if there is malfeasance and
maladministration, it is proper for Ministers to be responsible for
intervening in extremis, for the local government ombudsman to be
charged with the responsibility of ensuring that tenants are treated
fairly and with equanimity and for the Audit Commission to have a role.
It could be arguedas some havethat even the Homes and
Communities Agency should have a role across the country on matters of
oversight and assessment of the performance of those who used to be
called registered social landlords.
For those
reasons, we are committed to abolition. We do not think that the case
for the TSA has been made thus far by Ministers in a coherent and
comprehensive
way. However, we understand that there are slight amending and technical
caveats, and on that basis we will not divide the Committee. However, I
hope that our concerns are noted. We are fully committed to the
decision outlined in our green paper in February 2009, Control
Shift, to abolish this bureaucratic, wasteful and useless
organisation.
2.52
pm