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Baroness Hamwee moved Amendment No. 86:
The noble Baroness said: This amendment is grouped with Amendments Nos. 87, 88 and 89. My later amendments, Amendments Nos. 92 and 95, which I do not intend to move, cover rather similar ground.
On a number of occasions the Minister referred to the replacement of the value of houses which are sold at their full market value. This amendment seeks to ensure that there is a proper reinstatement to the housing association since I believe that more than simply the value of the house is needed in order to put the housing association back where it started, especially in respect of replacement costs. I refer to paragraphs (b) and (c) of the amendment which add to paragraph (a), the words of which already appear in the Bill. That proposal is to take account in particular of the cost of selling and purchasing. Members of the Committee who have been involved in property transactions, from the smallest to the largest, will know that they do not come without associated costs. Any organisation which arranges a transaction will have to cover at the least staff time, fees, valuation costs and all the costs involved in searching for a replacement dwelling. There will be--dare I say?--lawyers' fees. There will be stamp duty, land registry fees and even costs in dealing with the Housing Corporation with regard to expenditure from the disposal proceeds fund.
The amendment mentions interest. I am not necessarily wedded to interest at the very high rate--I believe it is now 15 per cent.--proposed in the amendment. But it is a fact that interest would recompense the housing association for not having the cash represented by these amounts in its own account and earning interest.
The Housing Corporation is a quango. As such its dealing in these matters tempts me in one or two places to raise issues which I might otherwise not wish to bring to the Committee. I feel, however, that it is important to have some detail on the face of the Bill, given the difficulties of raising at a later stage questions about the way in which the schemes are being operated, since there is indirect rather than direct accountability. Therefore, I seek a proper reinstatement.
Amendment No. 88 allows the corporation to borrow and is essentially a timing matter in order to ensure that funding is available to the corporation. Since reimbursement to housing associations is not a precondition, it will follow the event. I hope that the Minister will take the opportunity to give the Committee assurances that the funding will be secured to the fullest extent possible in order to ensure that the intention of reimbursing housing associations can be implemented. I do not intend to move Amendment No. 89. I beg to move.
Lord Mackay of Ardbrecknish: This group of amendments seeks to amend the provisions relating to the payment of grant to registered social landlords to cover the new right-to-buy discounts. I do not believe that any of the amendments would improve the scheme.
Clause 20 requires the corporation to pay grants to registered social landlords in respect of discounts given by them to tenants exercising the right to acquire. The
Clause 20(4) provides that the corporation, when paying a grant, may provide that the grant is contingent on compliance with such conditions as it may specify. The type of conditions which the corporation is likely to specify will relate to matters such as audit, record keeping, and so on. Amendment No. 87 would remove that power. It is clearly useful for the corporation to be able to specify these matters as it will help it keep track of what is, after all, public funding. I see no justification for the proposal in Amendment No. 87 to remove that power.
Amendment No. 88 would add a new subsection to Clause 20, providing that the corporation may borrow from any person such sums as it requires to make payments of grant to social landlords under Clause 20. The corporation already has borrowing powers under Section 92 of the Housing Associations Act 1985 which are subject to the Secretary of State's approval. Therefore, we believe that the amendment is superfluous.
I believe that I heard the noble Baroness aright when she said that she would not move Amendment No. 89. With my explanation, I hope that she will feel able to withdraw the amendment she has moved.
Baroness Hamwee: I do not feel that the Minister answered Amendment No. 86 at all. He repeated that the market value will be provided. I do not intend to pursue the point further but I shall take the opportunity between now and the next stage of the Bill to attempt to gather further detailed information of the cost of the transaction. I hope that the Minister will be prepared to consider the perfectly practical and commonsense points which may be made in order to deal with what I believe will be a funding gap. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 87 and 88 not moved.]
Clause 21 [Purchase grant in respect of other disposals]:
Clause 22 [Assistance from local authorities]:
Baroness Hamwee moved Amendment No. 90:
The noble Baroness said: Amendment No. 90 deals with the subsection providing that,
Lord Mackay of Ardbrecknish: Clause 22 enables local authorities to promote and provide assistance to registered social landlords. As the noble Baroness, Lady Hamwee, points out, subsection (4) allows local housing authorities to sell, or supply under a hire purchase agreement, furniture to the tenants of registered social landlords.
The noble Baroness is concerned that this is an additional power we are giving to local authorities which is not necessary because it can be swept up under Section 111 of the 1972 Act. However, the provisions simply re-enact earlier legislation, and that earlier legislation was contained in Section 61 of the Housing Associations Act 1985.
I suspect that if we did not carry this legislation forward people would assume that we had removed it and that, rather than being swept up by Section 111, it may be swept out. The provision provides local authorities with a practical way of providing help to those who are setting up home for the first time or those who, because of a change in circumstances, would find it difficult to meet the full costs of providing furniture for their home. For example, it could be used to help tenants who need rehousing as a result of a fire. Many local authorities have taken advantage of the provision when working with registered housing associations to provide furnished accommodation in their area.
This is a useful provision which should be retained rather than relying on any hope that it can be swept up by Section 111. I am sure that the noble Baroness will withdraw her amendment in the light of that explanation.
Page 13, line 14, leave out from ("be") to end of line 15 and insert--
("(a) the aggregate of the discounts given in that year;
(b) the replacement costs; and
(c) the interest.
(2A) The rate of replacement costs per dwelling shall be set in each September for the following year by the Corporation and different provision may be made for different cases, and in particular may be made in relation to different values, different areas, different descriptions of housing accommodation and different descriptions of registered social landlord, and may be a composite sum allowing for actual items of expenditure.
(2B) Before setting the replacement costs the Corporation shall consult such bodies appearing to it to be representative of registered social landlords as it considers appropriate.
(2C) In this section--
"replacement costs" means the estimated costs of disposal, including processing the person's claim, valuation and legal expenses, and of acquisition of a replacement dwelling, including search, valuation taxes and legal expenses and with an appropriate allowance for abortive disposals and acquisitions, at a rate as determined by the Corporation in accordance with subsection (2B); and
"interest" means interest on the discount and replacement cost from the date of disposal to date of payment at the rate of interest on judgment debts in the High Court.").
Page 14, line 14, leave out subsection (4).
"A local housing authority may sell or supply under a hire-purchase agreement furniture to the occupants of houses provided by a registered social landlord, and may buy furniture for that purpose".
11 Jun 1996 : Column 1595
In moving the amendment I do not wish to suggest that local housing authorities should not have this power. I simply ask the Minister whether they do not already have the power under Section 111 of the Local Government Act 1972. That is the section which allows local authorities to,
"do any thing ... calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions".
The point may seem a frivolous and unnecessary one. However, in the wider context of local authorities having to justify everything they do on the basis of legislation, I am concerned that, rather than relying on the Section 111 power to deal with matters which are ancillary, the powers of local authorities will become much narrower as a result of the general thrust of legislation. I beg to move.
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