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Amendments No. 97S and 97T—I do not understand how people cope with all these numbers and letters, especially when the order in which Z comes in the alphabet is different in different amendments; some people understand these things but the rest of us just try to cope—make the same point, that while preference in social housing should be given to people in need of housing, it is also necessary to look at the nature of the communities that are being created, affected or changed. One of these amendments relates to accommodation for rent and the other to owner-occupied accommodation, but in both the key is the need to promote mixed and sustainable communities. To some degree this goes back to the report produced rather more than a year ago by Professor John Hills on the role of social housing, in which he identified a number of problems specifically about council housing but which also relate to social housing in general. One of the main problems he identified was the unsustainability of communities increasingly dominated by the poorest and most vulnerable. There is tension between providing accommodation for people in the greatest need and creating communities that are sufficiently mixed and sustainable.

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There are all sorts of different ways of dealing with this, but this is not the time to go into them. However, the purpose of the amendment is to make the point that, if we are not careful, social housing becomes ghetto housing of one sort or another, and it is very important that we avoid that. Let us consider what has happened to council housing in many areas over the years. Some council estates used to be entirely or mainly owned by the council. In many areas, particularly when the estates had existed for 25 years or more, there was a balanced and sustainable mix of ages, occupations, incomes and lifestyles, and the estates had become mature communities.

The twin pressures of allocation policies that restricted new allocations to people in the greatest need for the very best of reasons, which we all supported, and of the right to buy, in which substantial parts of the estate were sold off and went into the private ownership sector—in many cases, these are now being sold on to private landlords, unfortunately—have resulted in those council estates being less mixed, less sustainable and less mature communities than they used to be. These are important issues. I do not want to detain your Lordships for very long, but these issues must underlie discussions about social housing in general, where we are going with it and what sort of communities we are creating. I beg to move.

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Lord Bassam of Brighton: I greatly enjoyed the restrained contribution from the noble Lord, Lord Greaves, on what he described as modest amendments. It was a useful beginning to a discourse on the philosophical underpinning to the issue. I congratulate him on that, because we sometimes lose sight of where the whole notion of social housing comes from and it is helpful to be reminded. His observations about the impact of the right to buy on some council estates were very interesting. I recognise some of them from my experience of my time on my old local authority.

The council estate adjacent to the university has in part become studentified, which is an issue; there is no question about that. It was a strange spin-off from a policy that was put into place by Conservatives in an earlier Government, from motives that one well understood at the time. That Government certainly believed that they were taking a measure that would provide a greater social mix in many of the council estate areas in which the right to buy was taken up.

In general, the amendments return to the definition of social housing, which has been the subject of running debates not only in your Lordships’ House but in the Commons Committee. They follow on directly from that and seek to provide, as the noble Lord has argued, further instances of where the clauses operate. I can offer the reassurance that the clauses do not introduce any element of means-testing into social housing, if that is a concern, and that his amendment to Clause 70 explicitly refers to promoting mixed and sustainable communities as a criterion for allocations.

The noble Lord has explained his amendment to Clause 71, which attempts to address a number of important social housing issues, such as the affordability of rent levels for those on low incomes. He referred particularly to how that affordability might vary, as he sees it, in different parts of the country, and to the importance of creating mixed and sustainable communities.

Amendment No. 97S intends to influence allocations policies so that they promote more mixed communities within social housing estates. However, these clauses do not affect allocations policies. They refer to the existence of allocations policies simply because they are one of the features that define social housing. The amendment would therefore have no impact on day-to-day allocations, but may have a perverse impact on regulation. It might mean that some new homes for rent could not be classified as social housing, because the allocations policies were not in line with the definition.

If, for example, a registered provider was operating an allocations policy that was not in line with the regulator’s standards, any new homes that were built would not be defined as social housing, and those homes would therefore fall outside the scope of regulation. The effect would be precisely the opposite of what is intended. The homes need to be defined as social housing so that the regulator can enforce its standards.

Amendment No. 97T makes a similar amendment to the definition of low-cost home ownership accommodation. It includes a similar reference to promoting mixed and sustainable communities and refers to,

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That language is unhelpful, because most low-cost home ownership purchasers often can afford to rent at a market rate. This would in fact restrict low-cost home ownership to very marginal purchasers and would seem to go against the main purpose of bringing about more mixed communities with a range of incomes.

However, we agree that the amendments probe some pertinent issues. For example, the question of how we can achieve more mixed and sustainable communities in social housing goes to the core of what the department does on a day-to-day basis. Our concern is that these issues cannot be addressed by these clauses and that the amendments seem to be attempting to achieve policy outcomes that the clauses have little or no impact on.

It may be helpful therefore if I set out again the purpose of these clauses. The clauses define which new homes become social housing. I reiterate that all existing homes owned by existing registered social landlords are automatically defined as social housing unless they are specifically excluded, such as care homes, for example. Once a home is classified as social housing, it remains social housing unless a specific event occurs, for example the tenant exercising a right to purchase.

In terms of the amendments, the clauses do not affect how homes are allocated. They do not affect the tenure of the tenant, and they do not make it possible for homes to leave the social housing stock. These clauses refer to allocations policy, for example, because that is one feature which defines social housing and therefore helps us to identify which homes need to be regulated. The clauses do not have any impact on allocations policies in their own right.

While the regulator will play an important role in ensuring that rent is affordable for people on low income, through its ability to set standards on rent and the Secretary of State’s ability to direct on rent standards, the clauses are not the right place for these important issues to be addressed and they will have no impact on long-term rent setting. I have some sympathy with the aims of the amendments, but I do not believe that they would achieve these aims and, in some instances, they may even be counterproductive.

To protect tenants, it is important that all new publicly-funded social housing falls under the scope of the regulator. In particular, the amendments might mean that some new homes could not be classified as social housing, for example, because the local allocations policies were not in line with the definition. That would leave tenants vulnerable and would leave the regulator unable to enforce standards. I understand what the noble Lord is trying to achieve, and he has raised some important issues in the amendments, but I rather fancy that the amendments do not achieve their objectives and that they might have perverse consequences.

Lord Greaves: I thank the Minister for that careful reply. It is probably true that these amendments are technically not up to the job that I would like them to do. However, the issues will not go away. They are fundamental to a great deal of this part of the Bill,

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particularly this section of it. They will come back, and we will no doubt discuss them again, whether or not in the context of the Bill. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 97R and 97S not moved.]

Clause 70 agreed to.

Clause 71 [Low cost home ownership]:

[Amendments Nos. 97T and 98 not moved.]

Clause 71 agreed to.

Clauses 72 and 73 agreed to.

Clause 74 [Leaving the social housing stock: sale]:

On Question, whether Clause 74 shall stand part of the Bill?

Baroness Hamwee: I have no objection to the clause standing part subject to the typos being corrected. A cross-reference has not been updated. I shall point it out afterwards.

Clause 74 agreed to.

Clauses 75 to 79 agreed to.

Lord Whitty moved Amendment No. 98A:

The noble Lord said: This amendment is intended to take one stage further the arguments put forward by the noble Lord, Lord Best, in support of the first amendment we discussed this afternoon, which I strongly support. I apologise to the Committee that I am having to Box and Cox and did not manage to get up to support that amendment.

This amendment is a way of getting on to the agenda an issue that we have not addressed hitherto in relation to what areas the regulator should cover. I am sure that these clauses as drafted do not do what I intend and—as the noble Lord, Lord Greaves, admitted with his amendments—I am sure there are some serious technical problems with them. However, they put on the agenda the fact that social landlords, whether they are councils, ALMOs or, in some cases, registered housing associations, manage large estates. On those large estates there are not only tenants in the strict sense of the word—direct tenants of the social landlord—but also ex-tenants who bought their flats, who are of the first right-to-buy generation and very similar in demographics and attitudes to the tenants, and those

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who bought the flats as the second generation and live on the estate of relatively low-cost housing, but not that low cost these days. There are also flats that were bought to let and are therefore occupied by sub-tenants who may be sub-tenants of other registered social landlords. This achieves the kind of mixed communities that we are all after in that there are owner-occupiers and direct tenants, often short-term tenancies fulfilling priorities in housing allocation priorities.

However, certain services, charges and relationships are still with the main landlord. On a large council estate a lot of things are dealt with on a more or less equivalent basis for tenants, sub-tenants and lessees, yet the Bill does not allow the regulator to intervene in the areas relating to non-direct tenants: for example: cleaning services; environmental services—the gardening, to put it crudely; big bills that relate to major works; smaller episodic bills relating, for example, to the introduction of digital television, which I have had cause to raise in other contexts in this House; and issues such as additional heating where charges are imposed by the landlord or the ALMO on tenants and lessees alike and will ultimately fall on the sub-tenants as well. They are calculated on the same basis and the services are the same for all forms of tenure.

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While accepting the priority in the Bill on those areas that were previously regulated by the Housing Corporation—and housing associations essentially—and the assumption of the noble Lord, Lord Best, that we could later extend this to ALMOs and local authority tenants, it needs to be recognised that there are residual landlord functions that also relate to other forms of tenure on that estate that will not be allowed within the purview of the regulator. The noble Lord, Lord Best, used the word “domain”, which to me is not just a status issue but a physical one, where the later landlord is covering all these different forms of tenure. Many quality of life issues, some expense and value-for-money issues and some fairness and equality issues arise in relation to all these forms of tenure.

That is not a particularly acceptable message to some of the representatives of tenants and lessees who often see things through different lights and who are very much in the domain of improving the quality of life and genuinely creating mixed and sustainable communities in these areas. If nothing else, I hope that the Minister will give some indication that the department is prepared to take on board in this context, and in other parts of the Bill, that there are issues to be addressed that are appropriate for regulation and regulatory intervention. The general regulation on lessees or in tenancies in the private sector will not cover these.

Like the noble Lord, Lord Best, I would have preferred the regulator to have a very wide function in the first place. Down the line we will have to address the situation; otherwise we will create another form of inequity and inflexibility in housing provision by restricting the regulator to dealing with only one channel of communication between the provider and the occupier when there are multiple forms of relationship. I beg to move.

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Lord Greaves: Briefly, I support everything that the noble Lord, Lord Whitty, said. Sometimes that is true where you would not expect it on ordinary estates, but it is particularly true in blocks of flats and such developments. I remind the Committee that my daughter is a tenant of a private landlord in a former council flat, and she is surrounded by tenants in similar situations, those from housing associations and people who own their own flats. It is very mixed indeed and it can get complex, which is exactly why people need the sort of regulation that the noble Lord suggests.

Lord Dixon-Smith: I sympathise with the proposal but add a word of caution. I heard what the noble Lord, Lord Whitty, said, and there is clearly a problem, but the people who bought the properties presumably thought that they were escaping from the inclusiveness of the original arrangement. If we do this, we will make the regulatory process more complex. It would be inappropriate to have blanket regulations applying to somebody who had bought their way out and had only a residual liability in respect of estate development. One would have to draft regulations to take account of the variations in tenure, which would make them more complicated; but the amendment would make that necessary.

Baroness Falkner of Margravine: A question occurs to me, so I hope that the noble Lord, Lord Whitty, can illuminate me. Where there is mixed tenure, does he envisage financial arrangements applying to the provider of the services? I am in broad sympathy with what he says, but I cannot see how it would work in practice. Would those financial arrangements be different according to the kind of tenure that people have on the estate, and what would be the implications?

Baroness Andrews: I look forward to my noble friend answering that difficult question. It is a relief when the questions are put to other Members of the Committee.

An important set of issues has been raised in this short debate. My noble friend is exercised by the fact that, for very good reasons, we have mixed economies within some of our larger estates and in blocks of flats where there is a mix of tenure. There are issues about those who have bought their properties and who are now faced with major bills for repairs, some of which are prompted by the fact that decent homes legislation enables local authorities to spend considerable amounts of money doing up their own properties. That implies and brings with it a cost to those who own their own homes, which illustrates my response to the amendment as a whole. It may sound a bit harsh that we do not think it is necessary for the remit of the regulator to be extended to leaseholders. It is not that we are not concerned about them but we consider that, because they are in a different position, they are more appropriately dealt with through other regimes, systems and services than through the wholesale extension of the regulatory framework.

If all the occupiers of an estate are owner-occupiers, they will clearly get the benefits of the legislation. However, where some of the properties are owner-occupied

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and some are let on a social housing basis, the owner-occupiers will have the benefit of leasehold legislation. In addition, the standards that may be set by the regulator under Clause 191 will give tenants on those estates and owner-occupiers protection, because in practice it will be extremely difficult not to do so. That clause will give power to the regulator to set standards for registered providers as to the nature, extent and quality of accommodation, facilities or services provided by them in connection with social housing. The legislation provides that that those standards may cover such areas as maintenance, environmental and social matters, as well as estate management.

While the standards will be set for the benefit of the social housing sector, many of them will also be of benefit to owner-occupiers living in estates with a mix of both owner-occupiers and social tenants. We need to go back to the principles of why we need a regulator for social housing, and we shall come on to that in later amendments. However, the problem is that social housing is not subject to the usual competitive pressures and therefore one is looking at a very contained market with few market incentives for good management and little entry to, or mobility within, the sector. Owner-occupiers have greater control over their housing circumstances, as the noble Lord, Lord Dixon-Smith, said. They have more mobility and choice. However, it is important that properties should be properly managed, irrespective of landlord or ownership.

We also have to remember that leaseholders have a wide range of rights, protections and responsibilities set out in their leases and in the body of the law; for example, in the Landlord and Tenant Act 1985. The lease sets out enforceable contractual rights, and legislation places a condition of reasonableness on variable service charges which a leaseholder has to pay. They can be challenged through the leasehold valuation tribunals, and further court action is possible.

There are statutory requirements for all landlords, including those in the social sector, to consult with leaseholders before carrying out works to buildings and estates. There is a set of principles around that consultation and notices of intention. We have strengthened that. We are proposing changes to the legislation, for example, so that leaseholders will automatically receive a regular statement containing information about their service charges with the same right to see supporting documentation. Amendments have been included in the Housing and Regeneration Bill to allow this to happen. There will be sanctions if this is not complied with, including the right to withhold service charges. So we are strengthening the protection available to leaseholders.

Perhaps I may say something about what we are doing on large major-works bills in parts of London that have caused particular problems. I think that it is fair to say that this issue has been exercising my department for some time. We have been very conscious that the problem is very variable. Some boroughs have much higher numbers of leaseholders faced with these very high bills but some are not affected; it depends on the stock and patterns of ownership. Nevertheless when a leaseholder, particularly one on a low income,

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is suddenly faced with a bill for £10,000 or £20,000 because his block of flats is being upgraded, it is a real issue.

We have looked at various ways of addressing the issue. We set out in a Statement to Parliament last March how landlords, who already have a lot of scope in what they can do, can do more. When we reviewed it last year, we set out how we would look at extending the payment options. At the moment—I put this on the record because I think that it is important and I want local authorities to take note of it—local authorities can provide a loan at a low rate of interest, spread payment over a longer period or agree to delay payment until the property is sold. They can also buy back properties from owners who are in arrears with service charges or cannot cope with the costs of looking after their homes. The Government fund part of the cost of their doing so by letting them retain more of the receipts from property sales.

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