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Lord Rooker moved Amendment No. 230C:

The noble Lord said: In moving the amendment, I shall speak to the others in the group, which are almost identical except for one that leaves out lines 18 to 25 on page 146. As drafted, Clause 190 would allow the relevant authority to pay grants to companies other than registered social landlords for essentially the same housing purpose as for which they make grants to registered social landlords. For the purpose of the clause, "company" means a company registered under the Companies Act 1985 and ALMOs—that is, arm's-length management organisations.

This group of amendments would broaden the range of organisations eligible to receive grant. We have listened to arguments from the Opposition in the other place, and do not wish to exclude any potentially suitable providers. The amendments would mean that persons eligible to bid for grant would no longer be restricted to companies as defined under the Companies Act 1985 or arm's-length management organisations. The amendment would allow the Housing Corporation to pay grant to "persons", as defined in the Interpretation Act 1978. That would include a body of persons corporate or unincorporate.
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The amendment would prevent situations from occurring where, for example, a joint venture between developers established as a company would qualify for grant, but a limited liability partnership joint venture between the same development partners would not. We still believe that a requirement for applicants to be registered companies would provide some additional assurances on their viability. However, the amendments will not mean that unsuitable persons will now be able to be allocated grant. I want to make that absolutely clear.

The Housing Corporation will be expected to make sure that only fit and proper persons receive funding. The reassurances that we want about the suitability of bodies can be sought in other ways—for example, as part of the corporation's "due diligence" work. These amendments would also bring the clause into line with general European Union policy, which seeks to avoid discrimination on the constitutional status and geographical basis of organisations.

The intention behind Amendments Nos. 230D and 231F appears to be to widen the range of bodies to which the Housing Corporation can pay grant. Frankly, the amendments that we have tabled are similar, taking into account the concerns raised in previous debates. However, the amendments of the noble Lord, Lord Best, would seek to place more restrictions on the definition of an eligible body than the Government are proposing. They would prevent government and governmental bodies, contracting authorities or individuals from applying. It is unlikely that many of the bodies excluded by these amendments would submit a bid. For example, the Public Services Contract Regulations include such bodies as national museums, tribunals and rent assessment panels.

However, the noble Lord, Lord Best, is right—I understand that this is a key concern and one we share—to be concerned that only suitable persons should receive the grant. But we think that that can be achieved without placing the restrictions on who is able to bid for the grant. I beg to move.

The Deputy Chairman of Committees: If I may make an apology to the noble Lord, Lord Best, I should have mentioned to the Committee that if Amendment No. 230C is agreed to I would not be able to call Amendment No. 230D, but of course he can speak to it now.

Lord Best: I am entirely satisfied with the amendment in the name of the Minister and I shall not move Amendment No. 230D and Amendment No. 231F which goes with it.

On Question, amendment agreed to.

[Amendment No. 230D not moved.]

Baroness Miller of Chilthorne Domer moved Amendment No. 231:

"( ) The proportion of grants awarded to companies in rural areas shall be in proportion to the percentage of the population living in such areas."
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The noble Baroness said: We talked at length earlier about the needs of rural areas, so I will not go back into those arguments that the noble Lord, Lord Bassam, replied to. This amendment seeks to make sure that the inevitable economies of scale that urban areas enjoy do not mean that an enormous proportion—disproportionate to the population—of the proposed grant goes only to urban and suburban areas, leaving rural areas to lose out, as they have done in the past.

I have had a projection from the Rural Housing Trust, which is the leading developer of small schemes of affordable housing in villages in England—that is, settlements of fewer than 1,500 people. The trust has been working with such villages since 1976. Since that time it has produced nearly 3,000 units of accommodation in 300 villages spread over 33 counties. It works at a small and appropriate scale for the size of village it works in, down to as few as two or three in an area such as Studland in Dorset, for example, where there is no such thing as affordable housing even for people earning probably £100,000 a year. If you are on a normal salary it would be hopeless. So three affordable houses in that area were really meaningful.

The trust's projection—which I want to bring to the attention of the Minister—is that over the next few years 8,000 small villages will need 50,000 new homes. That is in quite small settlements of under 1,500. I am very anxious that an innovative grant such as this is not going to make rural areas lose out. I beg to move.

Lord Hylton: I support the spirit of the amendment and do so as someone who, about 34 years ago founded a fairly small—now almost medium-sized—rural village housing association. Had that not been done, the village where most of the houses owned by the association stand, would almost certainly have been totally gentrified and passed beyond the means of the local inhabitants—the sons and daughters of local residents.

I might add that our last housing association scheme took five to seven years from start to completion—due to shortage of funds, planning difficulties, other housing associations going bankrupt and numerous other problems. The Committee will realise that this is extremely uphill work. I recommend to the Government the point made by the amendment. I do not necessarily expect them to adopt it as it stands, but could we at least be told that the policy of the Housing Corporation will be in accordance with the sense of the amendment? That would be of great benefit.

Lord Rooker: I could almost say, "yes" to both speeches. We are completely at one regarding the intention of both the noble Baroness and the noble Lord. I make no bones about that. I do not wish even to be nit-picking about the amendment, but, as it is drafted, it could have a perverse effect if there was only one application in terms of percentages of bids—for example, if there was a poor bid that did not stack up. But that is not the thrust of the amendment. The thrust is so that the small settlements and rural hamlets do not lose out on what we hope is an innovative scheme for providing social housing in another direction.
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I want to reassure the Committee that funding for affordable housing will be allocated in line with the priorities identified through the regional housing strategy process. But it must not be forgotten that part of that process is that regional housing boards must ensure that they have engaged with rural stakeholders and that the final product has been rural-proofed.

When I was Minister for Housing—Keith Hill now holds that post—we were visited by Alun Michael and his associates from Defra to ensure that our policies and their practical operation were rural-proofed. We already have a programme for small settlements below 3,000 involving the Housing Corporation; but I take on board what the noble Baroness said regarding the smaller ones. We would not want them to be missed out of this innovative scheme. Obviously, business cases will have to be put forward; but the main thrust is that this is not an urban policy, but a national housing policy.

A quarter of the population of the country lives in non-urban, rural areas—millions of people living in small hamlets, small villages and towns. We do not want them and their families driven out due to a lack of affordable housing. We are very keen to address that. We have stepped up the Housing Corporation programme only slightly, but we have stepped it up. We want to ensure that those areas also share in the new policy.

Baroness Miller of Chilthorne Domer: I thank the Minister warmly for his good reply, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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