House of Commons portcullis
House of Commons
Session 2009 - 10
Publications on the internet
General Committee Debates
Delegated Legislation Committee Debates



The Committee consisted of the following Members:

Chairman: Jim Sheridan
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 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 regulator—the Tenant Services Authority—will 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 regulator’s 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.
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?
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 council’s 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 Corporation’s 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 well—a 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 Corporation’s 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 Opposition’s 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 Committee’s 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 devil’s advocate, that the best regulator is the voter, who will judge the performance of that local authority as a landlord—or a registered social landlord, to use the new name—whether 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 exercise—89 per cent. of them did not. I suspect that they were cynical about the need for the body.
I do not decry the Government’s rationale for wanting to improve tenants’ democracy, accountability, quality of life and quality of housing—I 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 argued—as some have—that 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.
2.52 pm
 
Contents Continue
House of Commons 
home page Parliament home page House of 
Lords home page search page enquiries ordering index

©Parliamentary copyright 2010
Prepared 11 March 2010