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I can only repeat a version of what I said to the noble Viscount, Lord Eccles, previously. As an NDPB, the regulator is subject to the same reporting and accounting requirements and procedures as any other large-scale NDPB. The accounts direction issued by the Secretary of State, as with other account directions, requires that the accounts must show a true and fair view of the state of affairs at the year end. Subject to that requirement, and set out in the Cabinet Office guidance, the accounts must therefore be prepared in accordance with the accounting and disclosure requirements in Managing public money and the current government financial reporting manual issued by the

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Treasury, known as the FReM, as amended or augmented from time to time, and subject to paragraph 12(3) of Schedule 1, which makes exactly the same provision for the HCA; and any other relevant guidance or disclosure requirements come into that.

Not only in this but in other legislation, we have arrived at the view that that is sufficient; we have met our duties. Treasury approval of the accounts direction would be sought as a matter of course. The noble Viscount is right: administratively, any proposals to depart from that would need Treasury agreement. I am confident that the question on when this change was made will be answered in this mega-letter. I have no consolation from behind me on the noble Earl’s specific question, so it will also have to be answered in the letter if he will patiently bear with me.

Viscount Eccles: I shall await the letter with interest. It may answer questions on why this practice has become unnecessary, and whether it runs through all legislation or only some types. I hope that the letter answers all the questions and that there will be no need to return to the matter, but it is possible that I may think it right to do so at a later stage.

5.30 pm

Baroness Hamwee: I was amused by the reference in Clause 97(4) to,

to financial assistance,

It would be a brave Secretary of State who did something of which the Treasury did not approve.

On my own amendment, the Minister said that she agreed with the point but said that it was important research, irrespective of who did it. I know that that was intended to be inclusive rather than exclusive, but I was hoping, to the extent that her department is able to influence the work of the regulator, that it would encourage the regulator to take on this wider-ranging research as part of achieving the objectives. Although the department and the regulator are not the same, I am sure that the department will have a great deal of influence. I am grateful to her for the assurances that she has given and I hope that that will be undertaken, because for the regulator to succeed his horizons need to be quite broad. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 99 agreed to.

Clause 100 agreed to.

Clause 101 [Charging]:

[Amendment No. 104C not moved.]

Clause 101 agreed to.

Clauses 102 and 103 agreed to.

Clause 104 [Accounts]:

[Amendment No. 105 not moved.]

Clause 104 agreed to.

Clauses 105 and 106 agreed to.

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Clause 107 [Direction to the HCA]:

Baroness Hamwee moved Amendment No. 105A:

The noble Baroness said: In moving Amendment No. 105A I shall speak also to Amendment No. 105B. These are short probing amendments. Clause 107(1) provides that:

Clause 107(2), states:

and lists certain matters. Are the circumstances set out in Clause 107(2) the only circumstances under which a direction may be given under Clause 107(1) or is Clause 107(2) not exclusive? I have raised this before with the Minister so I hope she can answer briefly. That sounds very impertinent—I did not mean it in that way. I was trying to assist her. I beg to move.

Baroness Andrews: The amendments query whether the circumstances set out in subsection (2) are the only circumstances in which the power can be used. I can confirm that they are.

Baroness Hamwee: I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 105B not moved.]

Clause 107 agreed to.

Clauses 108 and 109 agreed to.

Clause 110 [Disclosure]:

[Amendments Nos. 106 and 107 not moved.]

Clause 110 agreed to.

Clauses 111 and 112 agreed to.

Clause 113 [Eligibility for registration]:

[Amendment No. 107ZA not moved.]

Clause 113 agreed to.

Clauses 114 to 116 agreed to.

Clause 117 [Fees]:

Baroness Andrews moved Amendment No. 107A:

The noble Baroness said: These amendments in my name deal, by and large, with fees. In his report, Martin Cave proposed that the regulator raises money to cover its running costs from regulated bodies. The Government agreed that it was fair that the regulated bodies should meet this cost, as they do in other industries, rather than through continued public subsidy.

Clause 117 gives the regulator the power to set fees for registration of social housing providers. The regulator may make initial registration conditional on payment of a fee. The regulator may also make continued

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registration of registered providers conditional upon payment of annual fees, which, in practice, means that providers will have to pay a fee every year. We envisage that the regulator’s activities will be funded almost entirely by the registration fees to be charged to applicants to register, rather than grants from the Secretary of State. That will make the new body much more independent from government. In addition, by passing those costs on to the regulated bodies, we will ensure that they keep up pressure on the regulator to drive down costs. In time, we expect the regulator to improve efficiency and to lower the cost of the regulatory regime, much as other utility regulators have been able to achieve.

It is important to stress that we do not expect the costs to registered providers to be too great. The regulator’s cost should be relatively small at about £20 million per year, which reflects the regulation side of the Housing Corporation costs. If that was divided evenly between registered providers on the basis of numbers of homes, it would amount to about £10 per social home per year. We think that offers good value for money.

The regulator has to prepare and publish the principles under which fees must be set, and consult persons it considers representative of the interests of fee payers. This is set out in subsection (5). Those checks and balances should ensure that fees are modest and fair. I understand, however, that some stakeholders are still concerned. We are therefore proposing an amendment to require the regulator to seek the Secretary of State’s consent to the principles on which fees are set. That will replace the requirement in the Bill for the regulator to consult the Secretary of State on these principles.

I hope this change will provide further assurance that the regulator’s powers to set fees could not be used to generate excessive income but only to reflect the reasonable costs of regulation. I beg to move.

Viscount Eccles: I would like to know whether it was considered that this should be done by order rather than by, I assume, a letter of approval.

Baroness Andrews: It would be done by a written letter, not by a formal order. That is the point.

Viscount Eccles: I ask that the noble Baroness gives consideration to the possibility that it is quite a serious approval. It might be more appropriately done by negative order.

Baroness Falkner of Margravine: I have a query on Clause 117(4) which says,

I think I understand why the regulator may wish to be flexible, but I also recognise that, in the case of larger housing associations, particularly those with 50,000- plus units, £500,000 is not an inconsiderable amount, particularly when it is paid out every year. Can the Minister elaborate on why we have this ability to differentiate? Regulation usually means that larger players are able to carry out due diligence and their functions in a manner which is less time-intensive and

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effort-absorptive of the regulator than smaller players, which, on the whole, require more hand-holding. At the moment, the fees are distributed per unit of housing and I am concerned that that should remain so. Does the Minister envisage any point when the burden might shift disproportionately to some other formula?

Baroness Andrews:The point of specifying the need for some differential is that, of the 1,900 RSLs, the majority are small and, therefore, one has to have regard to their viability and be careful about that. The fact that the Secretary of State will be involved in setting principles will enable that sort of issue, which was raised by the noble Baroness, to be addressed. Nothing says that it has to be proportionate. It has to be a sensible and fair system, which has to be expressed in the principles. It will be picked up in consultation. I am grateful to the noble Baroness for raising that important point.

On Question, amendment agreed to.

Baroness Andrews moved Amendment No. 107B:

On Question, amendment agreed to.

Clause 117, as amended, agreed to.

Lord Bassam of Brighton: I beg to move that the Committee do now adjourn for a period of no longer than 10 minutes.

The Deputy Chairman of Committees (Baroness Fookes): The Committee stands adjourned for 10 minutes, as judged by the annunciator, because the clock is not quite right.

[The Sitting was suspended from 5.42 to 5.52 pm.]

Clause 118 [De-registration: compulsory]:

Baroness Hamwee moved Amendment No. 107BA:

The noble Baroness said: In moving Amendment No. 107BA, I shall speak also to Amendments Nos. 107BB and 107BC. These amendments to Clause 118 probe the comment made by the Minister Iain Wright in the Commons Committee:

That struck me as an odd notion. Does “may” in Clause 118(1) mean “may” as normal readers would understand it, or is it “may” in legislative language—meaning “shall”?

My second amendment would remove the words, “take all reasonable steps” to give a body notice of deregistration, to suggest that a body should always be given notice except when that body has ceased to exist.

The third amendment changes 14 to 42 days. It is not intended to tease the Government, but 14 days seems a very short period indeed. I want to hear why the Government feel that such a short period is right. In Amendment No. 107BB, on a company ceasing to exist, I used the language used in Clause 118(1)(c), although there will always be something, unless the

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company has been struck off the register. For instance, if it is in liquidation, there will be a liquidator. I beg to move.

Lord Bassam of Brighton: I am grateful to the noble Baroness for her point. We take the view that it is right that deregistration is at the discretion of the regulator, otherwise providers might leave regulation by accident or even by deliberate action—for example, by changing their management so they no longer meet the registration criteria. That would not be right.

Amendment No. 107BC extends the period of notice which the regulator must give to a body that it proposes to remove from the register from 14 days to 42 days. The combined effect of Amendments Nos. 107BB and 107BC would be that the regulator must give a body about to be removed from the register 42 days’ notice, except where the body no longer exists. I can see why the noble Baroness thinks there is no point in the regulator trying to notify a body that no longer exists. However, there is no need for the amendment; the provision cannot require the regulator to give notice to a body that is no longer in existence.

Baroness Falkner of Margravine: Amendment No. 107BC leaves intact the words “at least” before the 14 days. If I have understood the noble Lord correctly, it would not require 42 days, it would require at least 42 days. I wanted to get that on the record because what the Minister said did not mean that. He said that it would require 42 days.

Lord Bassam of Brighton: I said that, but it could be up to 42 days. I understand what the noble Baroness is saying.

Amendment No. 107BB removes the words, “take reasonable steps to”. The noble Baroness might consider that they provide a get-out clause for the regulator, an excuse for failing to give notice. However, I assure her that taking “reasonable steps” is a strong test. It would allow the regulator to fail to give notice only in exceptional circumstances; for example if, after making extensive inquiries, the regulator could not trace the provider. As to the length of the notice—the period given to providers before they are deregistered—we think that 14 days is sufficient to enable a provider to make representations to the regulator.

6 pm

Baroness Hamwee:Given that the criteria for deregistration are very clear and are linked with criteria for registration in the first place, I find it curious that the regulator needs discretion in case there is an issue. I believe that there is a good deal of case law about giving notice and what happens if you cannot find the person whom you seek to notify. To take all reasonable steps may be quite a high requirement but it is clearly less than the requirement to notify, as you are not completely disabled by the fact that you cannot find the notifyee.

On whether 14 days is enough, it does not seem a long period for an organisation to make representations to gather evidence and respond, but we are obviously going to disagree. I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.

[Amendments Nos. 107BB and 107BC not moved.]

Clause 118 agreed to.

Clauses 119 and 120 agreed to.

Clause 121 [Appeal]:

Lord Bassam of Brighton moved Amendment No. 107C:

The noble Lord said: This amendment is our response to an amendment tabled in another place by Lembit Opik MP, and essentially accepts that amendment. Clause 121 provides that a body may appeal to the High Court against any decision of the regulator to refuse to register it, deregister it or refuse to deregister it as a registered provider of social housing. It was suggested that appeals by registered providers and potential registered providers against decisions by the regulator in regard to registering or deregistering them should be directed at a tribunal rather than the High Court.

We said that we would have a look at that proposition, as we believe that there will be a viable first-tier tribunal route in existence. There would be advantages to using that way of resolving matters, including lower costs and a lesser burden for small registered providers, but this would need to be explored in more detail. This amendment therefore permits the Secretary of State by order to transfer these functions to the first-tier tribunal. I beg to move.

Baroness Hamwee: I thank the Government for enabling my honourable friend to leave his mark on the legislation. I have a couple of questions. Is it envisaged that an order might provide for a first-tier tribunal to have jurisdiction in some but not all the three cases set out in Clause 121(1)? Secondly, I am not trying to put anything into the Government’s mind or to suggest that a particular position is being taken—I simply do not know. Is it implicit in this that there would be a right of appeal, either generally or on a point of law, from the tribunal to the High Court? If those questions are more easily answered afterwards, I would be happy to receive a letter.

Lord Bassam of Brighton: To save on the letter, we intend that they are all covered; that is sensible. However, we would need to consider that further. On the second point, yes.

On Question, amendment agreed to.

Clause 121, as amended, agreed to.

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