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Amendment No. 101C of the noble Lord, Lord Dixon-Smith, and the noble Earl, Lord Cathcart, would require the Secretary of State, when appointing new members of the regulator, to ensure that at least

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one-third of them are current tenants of social housing providers. We do not disagree with the spirit of the amendment, because we too want there to be tenants as members of the regulatory body. Having experience of living in social housing will clearly be advantageous for potential members, as it will give them first-hand knowledge of the problems that tenants face.

As I explained earlier, we are now recruiting through the normal public appointments procedure, and we have specified that some members should have experience as tenants. We currently envisage that the regulatory board will comprise the chair, chief executive and seven members and, among those seven, we would like to see at least two with direct experience of being a tenant. Caroline Flint made that clear in her announcement of 6 June. However, an amendment is unnecessary to establish that.

While we resist Amendment No. 102 of the noble Viscount, Lord Eccles, we understand the underlying concerns behind it. An important point is that Clause 84(2) specifies that a period of appointment may not exceed five years. It does not stipulate that appointments must last for five years, but merely sets it as a maximum length. In practice, it is likely that board appointments will last for three, or perhaps four, years—not least because a three-year appointment will probably be seen as a less daunting commitment for potential members. Housing Corporation board members have generally served three-year terms followed by a three-year reappointment, dependent on a satisfactory appraisal and recommendation by the chair. We would expect that practice to continue; indeed, as I have said, we are currently advertising for board members.

My noble friend Lady Dean made an important point about not having everybody going at the same point in the cycle. Certainly, when I have been involved in these appointments in the past, it was an issue. By having that flexibility with a five-year term, one potentially creates a situation where retirements come up periodically. That is an important consideration.

Amendment No. 102ZA would add the word “once” to the end of Clause 84(2). Hence the subsection would read, “A period of appointment may not exceed 5 years (but a member may be reappointed) once”. The amendment would clarify how often reappointment will be permitted. It is not necessary to include this in the Bill. The regulator is a public body whose appointment must comply with the guidance of the Office of the Commissioner for Public Appointments. This guidance makes it clear that public appointments should not last longer than 10 years, which allows for an appointment of five years and one additional reappointment. The purpose of the amendment is therefore already served through that route.

Amendments Nos. 102ZB and 102ZC seek to amend Clause 84, which permits the Secretary of State to dismiss members of the regulator in only five circumstances. These include absence of over six months, bankruptcy, financial interest and other forms of inability, unsuitability or unwillingness. This is the only way in which a member can be dismissed. The amendments seek to remove the specific reference to misbehaviour, so that “Case 5” refers only to members being unable, unsuitable or unwilling to perform duties, without

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specifying that this includes when there is misbehaviour. I therefore assume that the noble Baroness is content with the general principle behind the clause and behind dismissal in this case, but simply dislikes the use of the term “misbehaviour”.

It may help if I define misbehaviour. It is an entirely standard ground for removing a board member of a public authority. It covers two main circumstances: first, misbehaviour in office, such as using a position to confer benefits on family or harassing employees; and, secondly, misbehaviour that might affect the reputation of the body, which would normally involve the commission of a serious criminal offence.

If the clause no longer specifies misbehaviour, the Secretary of State would instead have to show that the acts that the person had committed made the person “unsuitable to perform functions”. However, unsuitability is probably a more difficult test to prove, as the Secretary of State would have to limit her considerations to the effect that the person’s actions would have on his or her suitability to remain a member. She would therefore be unable to take account of the reputational risk to the regulator of keeping the person as a member. That might be acceptable for criminal offences involving dishonesty, as it is reasonable in these cases to conclude that a person who is dishonest is not suitable to be a member of a public sector body. However, for other criminal offences or other serious misbehaviour, it is less clear that the unsuitability test would be satisfied. The wording should therefore stay as it is.

Amendment No. 104AB seeks to change the wording of Clause 92(b) by replacing the word “directs” with “permits”. The clause requires members or employees of the regulator to withdraw from performing a function where they have a conflict of interest, unless the regulator directs otherwise. The person is therefore automatically disbarred from that function unless the regulator directs that he can be involved; in other words, if the regulator permits him to be involved. The regulator is directing that the person is not disbarred from performing the function; he is not directing that the person must perform the function. It would therefore make no difference if “permits” were to replace “directs”. The two verbs have the same meaning in this context, so the amendment would have no effect.

Amendment No. 104AC seeks to change the wording of Clause 91(2) from:

to, “A committee or sub-committee may include non-members (provided that it shall not be quorate unless a majority of those present are members)”. The regulator has the power to set up committees and sub-committees. It can delegate authority over those committees to a member or an employee to exercise a function, and it needs to be able to do this for the committee to function.

Clause 89(1) permits the regulator to determine its own procedure, including provision for a quorum. The effect of the amendment would be that more than half the persons present on every committee and sub-committee would have to be members of the regulator—that is, they must be on the board—or they cannot legally take decisions. We take the view that there

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should be representation from the membership on each and every committee and sub-committee. That makes sense and ensures co-ordination and communication. It is a safeguard to ensure that there is awareness of the board’s policies on each committee. However, to have a majority of members is simply not practical and decreases the flexibility and, ultimately, the inclusiveness of the regulator’s work. Those are our reasons for opposing these amendments.

7 pm

The noble Baroness referred to an amendment that she did not move. I shall break with convention and refer to it. As regards the user panel, we already have measures in place to ensure that tenants are involved through tenant members of the board. As I explained, we seek to recruit those who might be involved in a sub-committee of the type envisaged. The National Tenant Voice will engage frequently at a high level with the regulator. The user panel point is already covered. I hope that the noble Viscount will feel able to withdraw the amendment.

Baroness Hamwee: Before the noble Viscount replies, I thank the noble Lord for those comments. As regards the misbehaviour point, my experience may be out of date but had the term been “misconduct” rather than “misbehaviour” I would have better understood it. “Misconduct” implies something rather more serious than “misbehaviour”, which is a rather broader term. However, “misbehaviour” may be coming into common use in this context.

Viscount Eccles: I am impressed by the interest this group of amendments has aroused. I thank everybody who has taken part in the debate. I particularly thank the Minister for his comprehensive reply. We are interested in precedents, and were reminded of them. If we look at the predecessor Bills and how the constitution and governance were set out, we see that it was rather sharper than in these clauses. Perhaps that is why interest has been aroused. On this occasion Ministers are not shy about putting forward government amendments. I hope to find a little more tidying up, if I may put it that way, between now and Third Reading.

On the point of substance, nobody could possibly object to the one-plus-seven balanced-board approach to the board of the regulator. I do not think that was what we were worried about; we were worried about the minimum of three. I told a story about government appointments advisedly because a Minister has often asked somebody in the department, “Aren’t we getting rather short of board members on such and such a body?” The reply comes, “I wouldn’t worry Minister, we’re allowed to go down to three”. Therefore, the numbers in the Bill are important and it would never be a good idea to get down to three.

The noble Baroness, Lady Hamwee, talked about “permits” instead of “directs”. I have a lot of sympathy with that. “Directs” has a technical meaning in Acts of Parliament and people must comply with it. While it can be acceptable when it is in the hands of Secretaries of State, it is not so good when it is in the hands of bodies which are not democratically elected.



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I thought that I had dealt with the “all at once” point. In the case of a new body you have to try to find a way forward which does not mean that everybody goes at once. If you are recruiting in part from predecessor bodies and recruiting over a certain period of time, also in part, there is no reason to suppose that everyone would have to go all at once. It is a very simple administrative matter to put that right. I am tempted to remind the noble Baroness, Lady Dean, that she and I, on a particular day, resigned from a board together. It was a long time ago.

Finally, on Clause 84(4)(e) and misbehaviour, I cannot help thinking that if I were a lot younger I might organise myself onto this board and misbehave. Since my appointment cannot exceed five years, I could probably get that going in about six months. Then I would go to judicial review and see how much I could extract. In all seriousness, Clause 84(4)(e) is a complete hostage to fortune. Frankly, as drafted, it will not do.

Baroness Hamwee: This is a serious point and I know that I am being tedious today. On declaration of interest and the regulator directing that someone should not withdraw, am I right in understanding that the regulator would do that through the board? I suppose that there could be a scheme of delegation, which would enable either the chair or the chief executive to give the direction. But is it anticipated that the board would vote, so that this would be by a majority? If so, does the person who has the conflict of interest in question vote, withdraw from the vote or what?

Lord Bassam of Brighton: I will write on this important point. It is, I think, somewhere in Clause 81. It is a matter of procedure. We will set it out for the noble Baroness so that it is transparent and we will share it with others.

Viscount Eccles: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 101A to 101C not moved.]

Clause 83 agreed to.

Clause 84 [Tenure]:

[Amendments Nos. 102 to 102ZC not moved.]

Clause 84 agreed to.

Clauses 85 and 86 agreed to.

Clause 87 [Consequential amendments]:

On Question, Whether Clause 87 shall stand part of the Bill?

Baroness Andrews: Before I address whether Clause 87 should stand part of the Bill, I should say that, since we are expecting a vote, it is permissible to start a long group even though we will not finish it. We can legitimately stop wherever we are and resume on Monday. Once the vote is called, with the permission of the Deputy

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Chairman, we will conclude the Committee proceedings. That makes perfect sense in the circumstances. I know that Members of the Committee who have been waiting to speak will have to come back on Monday. I am sorry, but we are the victim of circumstances.

What Members of the Committee see on the Marshalled List is not a misprint. My move to withdraw this clause is my attempt to shorten the process. But this does not shorten the process because we are tabling Amendment No. 112C, which will put the provisions of this and other clauses into a new schedule. I hope that the Committee will allow me to do that.

Clause 87 negatived.

Clause 88 [Fundamental objectives]:

Earl Cathcart moved Amendment No. 102ZD:

(a) minimises interference,(b) is proportionate, consistent, transparent and accountable,(c) complies with any duty of the regulator under section 22 of the Legislative and Regulatory Reform Act 2006 (c. 51) (code of practice), and(d) seeks to achieve the following objectives as far as possible.”

The noble Earl said: The group of amendments to which I shall speak is headed by Amendment No. 102ZD, which is tabled in my name and those of four other noble Lords. Clause 88 sets out 10 objectives for the regulator and states that,

Objectives 1 to 9 include encouraging a supply of well managed social housing; ensuring protection and choice for tenants; tenant involvement in management; efficient, economical and properly managed providers that contribute to their local areas; and encouraging investment in social housing without burdening or misusing public funds. These objectives are all excellent, but they show what the regulator is expected to achieve.

However:

We believe that this objective is fundamentally different because it is not about the aims of the regulator but about how the regulator has to proceed and the manner in which it proceeds when seeking to achieve objectives 1 to 9. It is not in itself an objective. I suggest that the regulator should always operate in a manner that minimises interference and is proportionate, consistent, transparent and accountable in all the objectives it undertakes and in pursuing all its objectives 1 to 9. The regulator should not have to balance that against the other nine objectives as required in subsection (13). That is why we have tabled Amendment No. 102ZD and its consequential amendment, Amendment No. 103C, which ensure that the obligation of proportionality applies to the way that the regulator pursues all its objectives.



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Amendment No. 103ZA is also in this group. It places an onus on the regulator to ensure that tenants have adequate information about the standard of their housing services. It would ensure that under objective 2 actual or potential tenants of social housing would have an appropriate degree of information about the management of their homes. That is essential if they are to have effective choice and be able to take part in management. As Professor Cave stated in his report, empowerment requires information. He reported that the Tenant Involvement Commission found that:

Tenants need information, but there is nothing in the regulator’s objectives that imposes an obligation on providers to provide that information. This amendment places an onus on the regulator to ensure that the information provided is directly relevant to the tenants and is adequate for them to make choices and be involved with the management without at the same time placing an undue burden on the provider. This information must be available for comparison at a local level.

The Cave review accepted that providing local comparative information may be problematic for landlords who operate across many local authority areas. Professor Cave said that the regulator should play a key role in ensuring that the core information requirement is manageable and consistent across all areas. The optimum level at which information should be provided is for housing within a local authority area. That would enable tenants to make like-for-like comparisons. It would provide them with the material they need to consider whether their homes could be better run by another provider in the same area.

The next amendment is Amendment No. 103E, which is given a definition by Amendment No. 104ZA. It would ensure a level playing field for the public, private and third sector providers of social housing property and services. Those involved in the provision of such housing fear that some types of provider will have an unfair advantage because the rules do not apply to all types of providers. An explicit requirement on the regulator to promote competitive neutrality would help to prevent the development of disadvantage in the regulatory framework as well as help to eliminate barriers to developing a more effective market in housing services. That would have the effect of empowering tenants and enable a lessening of regulation over time.

I know that other amendments are grouped with mine and I want to give other Members of the Committee a chance to speak to them. I beg to move.

7.15 pm

Baroness Wilkins: Amendments Nos. 102A and 108A are in my name, and I shall speak to them briefly. Amendment No. 102A would ensure that it is Oftenant’s fundamental objective to supply inclusive housing in its supply of social housing. Social inclusion has been an important objective of government policy but it needs to be future proofed. Amendment No. 108A would give Oftenant an explicit duty to set

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standards for registered providers in relation to the accessibility of the accommodation, facilities and services that they provide.

The Housing Corporation has design standards for new homes and this amendment, which has been sponsored by RADAR, Habinteg Housing Association and Care and Repair, proposes that the new social housing regulator should set standards for housing and the wider built environment and infrastructure as an important component of the Government’s goal of building inclusive communities.

I quote from the debate on this amendment in the other place in which Sir George Young states:

I apologise that I could not be here when the HCA’s responsibility for accessible housing was discussed. My noble friend showed a deep understanding of the need to ensure that housing and the community infrastructure are capable of meeting the changing needs of the whole population, and that disabled people are not defined as a ghetto group to be dealt with separately. We are all liable to need accessible facilities at some time in our lives. I hope that she will respond accordingly to these two amendments.

Baroness Hamwee: I shall probably be the one who has to stop mid-sentence.

I have a good deal of sympathy with the noble Earl’s Amendment No. 102ZD. I have read the assurances given throughout the debate in the Commons about the importance of objective 10. I do not think that anyone is quarrelling with that in itself but it just feels uncomfortable. I had difficulty articulating my problem with it but thought this morning that that is perhaps because objective 10 is how things are done, not what is done. That is why it is absolutely right that proportionality—I will use that word to encompass everything—should apply, but it is an overarching approach that applies to all the objectives. That is why it feels uncomfortable. When I first read the noble Earl’s amendment, I was not sure about paragraph (d), which seeks to achieve,

I then realised that it is already in Clause 88(1), so I cannot take issue with it.

We very much support the amendments of the noble Baroness, Lady Wilkins. I made that point when we discussed similar issues in the context of the HCA. I hope the answer will be that that is all wrapped up in objective 1, which deals with,

I read “demands” as a range of demands for different types of housing. This is not simply a numbers matter. It may well be picked up. I am sure that that is intended.



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