17:44 - Division on Amendment 52A - Ayes: 183 / Noes: 207 - Amendment 52A disagreed.
Lord Shutt of Greetland
My Lords, I thank the noble Lord, Lord McKenzie, for speaking to his amendments, the first of which is Amendment 39. Clause 155 provides a power for central government to make determinations providing for the calculation of a settlement payment in relation to every council that retains its own housing stock. This payment is a mechanism for adjusting each council’s housing debt to a level which it can sustain after meeting the costs of managing and maintaining its stock. It will leave every council in a position to finance its own housing stock from its own rental income without need for subsidy. The clause sets out that these determinations may be calculated according to a formula, and that this formula may include variables relating to income, expenditure needs and levels of existing housing debt.
The methodology that we will use to calculate these settlement payments has been extensively tested and refined with local authorities through two public consultations. It has also been the product of joint working with local authorities and others working in the sector. Subsequent to these consultations, we have issued two detailed policy documents this year confirming our intentions to make full reforms based on the key principles set out in these consultations. These policy documents include the models we will use to value the stock and working drafts of the determinations that we will issue. We will publish a further consultation in November on the final proposals, when we have the latest data.
It is therefore fair to say that this policy has been subject to unusually high levels of public scrutiny and debate. In valuing the business, the expenditure needs are rooted in unit costs identified in independent research which was itself published for consultation. The income assumed is that set out in the Government’s national social rent policy. The settlement payments will reflect the difference between the value of each housing business and its existing housing debt. Where the debt is greater than the valuation, the Government will pay the difference to the council. Where the valuation is higher than the debt, the council will pay the difference to the Government.
The amendment which the noble Lord seeks would remove a degree of discretion available to the Secretary of State in setting the assumptions upon which the determinations will be based. This is unnecessary, as the assumptions will be based on the best information available at the time and have been extensively tested and consulted on. In addition, the determination setting out each settlement payment will be subject to a further consultation this autumn, during which councils will be able to correct any errors. Therefore I trust that this amendment will not be pressed.
On Amendment 43, Clause 157 sets out the practical provisions under which settlement payments should be made. It gives a reserve power to the Secretary of State to charge interest or recoup costs incurred if councils make their settlement payments after the time specified in the determination. I have described these as reserve powers as we do not expect to use them due to the excellent track records councils have in meeting their financial obligations. The noble Lord’s amendment would establish reciprocal arrangements whereby the Secretary of State would make additional payments where any sum payable by the Secretary of State to particular local authorities was not paid on time. I can assure you that the Government will make its payments to local authorities on time.
That sounds grand, so I thought I would check it out a bit further. Presently housing revenue account subsidy is paid in 10 instalments in the year, and is paid on time. When councils receive regular revenue support grant, it is paid and it is paid on time. On the rare occasions, for some technical reason, it has not happened on time, the Government have voluntarily paid compensation. The determination setting out the payment date will be issued by the Government and detailed arrangements for the day have already been set out by the Department for Communities and Local Government in the policy document Self-financing: Planning the Transition, which was issued this July. Therefore, I do not believe that this amendment is necessary, and I trust it will not be pressed.
On Amendment 45, we had some discussion on these areas on Monday and we already debated the power we are taking to set a cap on housing debt as part of our reforms. As I noted previously, Clause 158 is not a minor or technical part of these reforms, it is integral to protecting the Government’s central fiscal priority—to bring public borrowing under control. I understand that many councils do not want a centrally imposed limit on their ability to borrow for housing, but our reforms must not risk undermining national fiscal policy on public debt. Self-financing will give local authorities direct control over a rent income stream of around £6 billion a year. This could potentially be used to finance a large increase in public sector debt. It is not possible to say confidently how many councils might choose to borrow more but we know that councils will start out under self-financing with much less debt per dwelling than housing associations with similar costs and incomes. It is just not possible to take the risk that this deal might drive a big increase in public sector debt.
Noble Lords have asked why the prudential borrowing rules are not sufficient to protect against this. The prudential borrowing rules have worked very well but, as I said previously, our concern is not that local authorities will act in ways that are imprudent locally, it is that in aggregate these borrowing decisions may be unaffordable nationally. The amendment tabled by the noble Lord would remove this specific cap on housing borrowing and replace it with a power for the Secretary of State to issue guidance or regulations under the Local Government Act 2003. The Act does include powers to cap the debt of individual local authorities, but these are,
“for the purpose of ensuring that the authority does not borrow more than it can afford”.
As I have said, our concern is not that a council would borrow more than it can afford, it is that in aggregate councils may borrow more than the country can afford. The bespoke powers we are taking ensure that this cap will apply only to housing debt and not to any other borrowing by local authorities. Indeed, I have some sympathy with the intentions but I have to resist the amendment and I trust that it will not be pressed.
Lord McKenzie of Luton
My Lords, I thank the Minister for his very detailed, if predictable, reply. In relation to Amendment 45, I honestly do not think that he has reasonably addressed that point about the power that already exists with the Secretary of State being able, for national economic reasons—which is why he wants it in this clause—to set limits in relation to the borrowing of money by local authorities. That power is there. Why is an additional power needed? I do not think that the noble Lord has dealt sufficiently with that point.
As regards Amendment 43, as I understand it the proposition is that should the Government be late with their payments for technical or any other reasons, as has happened albeit infrequently in the past, they will make a voluntary payment. Is that on the record and what we are dealing with here? The amendment simply seeks to enshrine that formally in legislation. But, as I have said, I will not push that point if the noble Lord is putting on the record that in those circumstances the Government anticipate keeping local authorities whole.
Lord Shutt of Greetland
That would be the anticipation but the idea is that the Government pay on the dot at the appropriate time.
Lord McKenzie of Luton
Of course it is. One would hope that they do and I accept that overwhelmingly they have, under the current subsidy system. But it is good to have that clearly on the record.
As to Amendment 39, I recognise and understand that there has been extensive consultation around these important provisions and that there is more to come. I was seeking to get a better view on the extent to which there may still be disagreement challenges over the technical aspects of how the settlements are proposed. What is the process for settling that? Consultation is all very well but it is a question of how the Government respond to that if there are at least residual challenges about those calculations. As I have said, I do not propose to press Amendment 39. We will see where those future consultations and discussions lead us. I made my point in relation to Amendment 43 and we have something on the record.
I am inclined not to push Amendment 45 today, although I urge the Minister to give us a better explanation of why proposed new subsection (4) is not sufficient to cover what the Government seek to achieve. Without that, I give no guarantee that I will not seek to bring that point back at Third Reading.
Lord Shutt of Greetland
My Lords, I thank the five noble Lords who have spoken and I pay tribute to the noble Lord, Lord Best, and his work in housing over many years. The business of the amount gained when houses are sold and how the money is used is a subject that many of us have been debating for most of our years in public life.
What we have here is a total, and there are trade-offs in this element of the Bill. Although I understand the intention behind proposed new Clause 51, which is to end the surrender to central government of 75 per cent of receipts from the sale of right-to-buy and similar houses, and although I appreciate councils’ disappointment that we have not been able to end the policy, its continuation is necessary to help with the country’s huge fiscal deficit. The Government have ensured that the viability of the self-financing settlement is not affected by the decision. We are compensating local authorities for loss of rental income from future right-to-buy sales. To do this, we have included a forecast of right-to-buy sales in our valuation. The level of debt that authorities will take on has consequently been reduced in our latest estimate, as the noble Lord, Lord McKenzie, indicated, by £862 million. In addition, all councils will still retain 25 per cent of receipts. They will also be able to retain 100 per cent of receipts from other sales to spend locally on affordable housing or regeneration. It is worth noting that receipts generated from right-to-buy sales have rapidly declined, sales being now about 5 per cent of what they were at their peak.
I hope the noble Lord will draw some comfort from the fact that we issued a consultation on 25 August, which set out proposed amendments to the regulations governing the use of receipts arising from the disposal of council housing assets. We have proposed to amend the regulations to make it clear that the requirement to surrender 75 per cent of receipts to central government shall apply only to receipts arising from right-to-buy sales or sales that are right-to-buy in all but name: that is, sales to existing council tenants. Sales at market value to other purchasers could then be retained, provided they were spent on affordable housing, regeneration projects or paying off housing debt. I trust that that is helpful and, bearing it in mind, that the amendment will not be pressed.
Lord McKenzie of Luton
The Minister said that the Government were reducing the level of debt that local authorities would otherwise take on because of this policy by some £860 million. Does it follow that central government debt is correspondingly £860 million higher than it would otherwise have been, and how does that help deficit reduction?
Lord Shutt of Greetland
I might have to think that one through, because I see the contra. On the other hand, there is only one central Government. The problem that we have all along is that some 170 local government entities are involved in housing. At least you know where you are with central government and that £862 million. The position can be entirely different in local government.
I would like to think that there will be a time when this policy is not in place. However, as I indicated, it is no longer the big deal that it was, given that so many former council houses have been sold and the amounts coming in are nothing like they were at their peak, when this Government were not in business.
Lord Best
My Lords, the housing revenue account is often compared to the Schleswig-Holstein question. Of the only three people who understood it, one had committed suicide, one was in a madhouse and one was in a monastery. Following the debate on the housing revenue account today has been a bit like that.
I am very grateful to noble Lords who have spoken on this. The noble Lord, Lord Whitty, made two fundamental points. First, if only we had kept the receipts during the past 30 years, we could have built a lot of houses and renovated a lot more. That money has evaporated. If we could get that changed henceforth, that would be thoroughly commendable. The noble Lord also made the point that if local authorities had been able to sell vacant properties on some of their estates on the open market, they could have introduced people on different incomes and created mixed-tenure estates, which would have been better socially for everyone concerned. However, there is absolutely no reason why local authorities would do that, because they would lose all the money that they received from the sale and could not then replace the home that they had sold. I am very grateful for that intervention and for those of the noble Lords, Lord Beecham and Lord McKenzie.
I shall certainly bank the very important point that in respect of sales outside the right to buy—the voluntary sales by local authorities—the intention is that in future the levy will be lifted. That could be quite a significant change in the future. The leader of the London Borough of Hammersmith & Fulham, Councillor Stephen Greenhalgh, is very much in favour of this. He explained to me that he has properties which, going back to the days of municipalisation, are scattered in some streets and are now in need of substantial repairs or improvements, although they are also very valuable. Rather than spend a great deal of money on some of those properties when they become vacant, it would be much better for Hammersmith & Fulham to sell them on the open market and not spend the money on the repairs. That money would be recycled, getting two or three flats elsewhere for the price received for those properties in Parsons Green or wherever they happened to be in Hammersmith & Fulham. Therefore, the Minister’s concession here may open some opportunities for councils to take in receipts to recycle in a very meaningful way, and I am very grateful for that concession.
In relation to the right to buy, we live to fight another day. For the moment, I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
My Lords, the amendment proposed by my noble friend Lady Hollis is most interesting and has considerable merit. She has considerable experience in the local government and social housing sectors. Where tenants want to make major improvements or improve other amenities, I can see the case for this being financed by an increase in the rent paid on the property. My noble friend makes compelling points in particular regarding fuel poverty and green energy and also dealing with the issue of housing benefit. If the Government are not able to accept the amendment, will the noble Lord at least agree to take it away and reflect on it? It could be explored further and perhaps introduced at another time following discussion with relevant departments.
Lord Shutt of Greetland
My Lords, I thank the noble Baroness and the noble Lord for their contributions. It is more complicated than I thought. The amendment is clearly about additional facilities requested by the tenant, yet the points made by the noble Baroness have been about solar panels and, basically, energy. Clearly the amendment is about any form of enhancement required by a tenant. All I would say on the detail is that my noble friend Lady Hanham has shown me a letter that she wrote to the noble Baroness, Lady Hollis, on 9 August offering to discuss this matter. She may not have got the letter or something may have gone wrong, but this offer has not yet been taken up. My noble friend Lady Hanham would be happy to discuss the matter and that could well be a helpful way forward. I cannot give a commitment on where that would lead, but I think it would be a good thing if that offer were taken up.
I cannot accept the amendment because it would allow landlords complete freedom to charge rents above the target rent for particular properties in order to fund the cost of additional facilities. This would lead to an unacceptable rise in the housing benefit bill. There are two types of landlord to whom the amendment could apply: local authority landlords and housing associations. Both sectors are able to exercise some flexibility over rent setting but are subject to important constraints. In the case of local authority landlords, there is the “limit rent”, which is the maximum that the Department for Work and Pensions is willing to pay in housing benefit. This cap is vital to control the welfare bill. For housing associations, a direction on rent is set each year by the regulator in order to achieve a degree of consistency in rent levels across the sector and to protect the housing benefit bill. Noble Lords may not be aware of this, but for two-thirds of all tenants in council and housing association properties, the rent comes from housing benefit. So it clearly would be significant.
The noble Baroness’s amendment would remove an important control by Government over rents, which they will largely pay for. While this could pay for some improvements, it would result in uncontrollable increases in the housing benefit bill that we can ill afford. Furthermore, there would be no assurance that the taxpayer was obtaining value for money from the additional public expenditure. For this reason, I must reject the amendment. Councils and housing associations can charge affordable rents of up to 80 per cent of market rents as part of an agreement with the Homes and Communities Agency to build new homes. The extra rent must be used entirely to fund the new homes, which will produce a housing benefit saving as they are still at rents below those charged in the market.
I hope that, in the circumstances, the noble Baroness, Lady Hollis, will take up the offer from my noble friend Lady Hanham and that on this occasion she will not press her amendment.
Earl Attlee
My Lords, these amendments focus on the potential impact of accreditation schemes, both in the private rented sector and the social rented sector. I turn to the social rented sector first.
Amendment 52B would give the Secretary of State the power to require the Homes and Communities Agency, and from April 2012 the Greater London Authority, to supply information about any accreditation or standards to be held by landlords of social housing. I assume that the amendment relates to the HCA’s future role as a regulator of social housing. The noble Lord nods. However, under the Housing and Regeneration Act 2008 the regulator is already obliged to consult on its own standards for social housing landlords and to bring those standards to landlords’ attention. In practice, of course, the regulator’s standards are freely available for everyone to view on its website, so I do not see a need to empower the Secretary of State to require that this information is published by law.
The amendment could also encompass accreditation or codes that might be adopted by social landlords on a voluntary basis. It is important that this kind of voluntary activity is owned by the sector itself, so I am not convinced that the regulator should be required to publish information about it. Indeed it is important that there is a very clear distinction between the regulator’s standards, which are compulsory, and any codes or accreditation arrangements that are adopted by landlords on a voluntary basis. Of course, we would encourage such voluntary activity in the sector, but we do not believe that it would be helpful for the regulator to police it or to report on it.
Turning to Amendment 85, which deals with accreditation in the private rented sector, I think that we all agree that a good accreditation scheme can play an important role in developing a local authority’s relationship with their local landlords. Many local authorities already run successful accreditation schemes, but as with the social sector, accreditation works best when it is owned by those involved. One of the main strengths of voluntary accreditation to date is that local authorities have been able to tailor their schemes to local needs, and experience shows that accreditation works best when it matches local circumstances.
Instead of allowing that local discretion, the proposals in front of us today would impose top-down burdens on all local authorities, including those who, quite legitimately, decide that accreditation is not appropriate for their area. Worse, they would force all existing and effective accreditation schemes into a straitjacket designed by central government. Schemes that did not match up would have to be, quite pointlessly, dismantled and reassembled at considerable administrative cost. This does not seem to make much sense and we cannot support it.
My Lords, these amendments are intended to support accreditation—and the noble Lord explained why he believes them necessary—but unfortunately they would have the opposite effect by undermining effective schemes that are already in place. Given this, I would ask the noble Lord to withdraw his amendment.
Lord Kennedy of Southwark
My Lords, I thank the noble Earl for his reply. However, I still think that there is an issue here that needs further consideration, so I hope that this will be kept under review. That said, I beg leave to withdraw the amendment.
Lord Best
Amendment 54 is in the name of the noble Lord, Lord Kennedy and myself. Currently, the Secretary of State is able to direct the regulator to set standards for social housing in certain areas. In a strictly limited number of cases, he is able to direct the content of these standards. Clause 163 of the Localism Bill seeks to strengthen his powers in this area, allowing him to shape the contents of standards regarding tenancy exchanges in which tenants can swap properties. The view within the housing world is that this is giving the Minister too many powers to direct the behaviour of social landlords. The danger of accumulating more and more powers in the hands of the Secretary of State is that eventually, as one Minister after another brings their own fresh and no doubt good ideas to bear, you are effectively nationalising the housing associations; they are becoming creatures of government. They then run the risk of being regarded by the EU and others as public sector bodies. If the housing associations are no longer independent bodies and are regarded as public sector agencies, then all their borrowing becomes public sector debt and we have lost one of the key elements in having a social housing sector that is outside of public sector control.
So I am very sympathetic to standards about exchanges and the mobility of labour, and to the Minister’s hopes that housing associations will behave in a particular way, but laying this down, through direction to the regulator over these standards, does seem a step too far. I beg to move.
Earl Attlee
My Lords, Clause 163 is important in increasing mobility for social housing tenants who may wish to move for work, or to give care to or receive care from family or friends. We want to increase opportunities for tenants to move through mutual exchange. We have been working with the existing main providers of home-swap services to develop a technical solution that will put in place a national scheme that enables tenants to receive information on all possible matches across all providers in a scheme. Alongside this, we want all landlords to be required to provide their tenants with access to good internet-based home-swap services. Indeed, the majority of landlords who responded to our consultation on housing reform also agreed with this approach and said they could see no good reason why landlords should not subscribe to such a scheme. We therefore propose, through using the powers in this clause, that the social housing regulator should set a mutual exchange standard to make sure that social landlords sign up to good-quality services.
The noble Lord also raised the issue of public sector debt. While I am not undertaking to reflect on that and come back at a later stage, I will undertake to satisfy myself, through discussions with my officials, that the problem which the noble Lord alludes to does not exist. While I accept that some noble Lords view this as an overly bureaucratic approach, we believe that the benefits of increasing choice and mobility for social tenants must be the priority and that we should seek to deliver this better service for them.
Lord Best
I am grateful to the noble Earl for that response. I agree entirely that improving mobility and exchange schemes is a thoroughly commendable line to pursue. I think that I am now on my 23rd housing Minister since I started in this world. They have all had important ideas to add to the things that housing associations ought to do; it is just that in the end, if one is not careful, the cumulative effect is the creation of an agency that is simply a government bureaucracy. I am grateful for the noble Earl’s reassurances and beg leave to withdraw the amendment.
Lord Kennedy of Southwark
My Lords, I will be as brief as possible in speaking to this group of amendments. My Amendment 55 seeks to designate an individual within the Homes and Communities Agency to be responsible for regulation. The amendment has the support of the National Housing Federation, and it is important because it seeks to avoid a conflict of interest between the HCA’s regulatory and investment functions. It will help to ensure that regulatory issues can be addressed, even to the extent of formal legal proceedings, without compromising the investment function of the HCA, and vice versa. The HCA would of course still be required to appoint a regulatory committee to oversee the regulation officer. The Government may say that this proposal will diminish rather than enhance regulatory independence but I do not accept that that is the case at all. I am in fact arguing the exact opposite. If that is the Government’s position, I hope that the noble Earl will be able to give the House additional words of assurance on this matter. I beg to move.
Earl Attlee
My Lords, I am grateful for the way in which the noble Lord, Lord Kennedy of Southwark, succinctly moved his amendment. The Government are committed to ensuring the continued independence of the regulatory function once it transfers to the Homes and Communities Agency. However, our view is that the nomination of a single individual as a regulation officer would diminish rather than enhance regulatory independence. Rather than vesting the regulation function in an independent committee, these amendments, as the noble Lord explained, would confer the statutory powers on a single member of the HCA’s staff. In moving his amendment, the noble Lord talked about the problem of a conflict of interest. However, this person could presumably be dismissed at any time by the HCA on normal employment grounds. It could prove difficult for a member of staff in that position to take decisions that were demonstrably independent of the HCA’s other functions. In addition, where formal regulatory decisions are made by a properly constituted board or committee, there can be greater confidence that those decisions are broadly based and take account of the full range of relevant factors. I hope that the noble Lord will feel able to withdraw his amendment in view of my explanation.
Lord Kennedy of Southwark
My Lords, I thank the noble Earl for his response. Clearly we are not going to agree on this. Nevertheless, I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
My Lords, the Opposition fully support the amendment moved by the noble Lord, Lord Best. The amendment seeks to correct the use of what can only be described as an odd and unnecessary use of the term unsuitable. Like the noble Lord, Lord Newton, we ask the Minister to address that specific point of why unsuitable is being used. There is much concern that the Government are taking a much wider view and a much wider power and have additional intentions of using it. I hope that the Minister either accepts the amendment or that we have a very clear explanation about what this does and does not mean.
The Secretary of State already has the power to remove someone who is unable or unfit. As the noble Lord, Lord Best, said, this is adequate for the Monetary Policy Committee of the Bank of England, so we on this side certainly think that it is good enough for the HCA regulation committee.
Earl Attlee
My Lords, it is important that the regulation committee is able to function effectively in order to retain the confidence of investors and the social housing sector. In extreme cases, it may prove necessary for the Secretary of State to intervene to remove a member of the committee to ensure that its crucial work is not jeopardised. “Unable, unfit or unsuitable” are fairly standard grounds and a nearly identical provision exists for membership of the boards of the existing social housing regulator and the Homes and Communities Agency.
In answer to my noble friend Lord Newton of Braintree and the noble Lord, Lord Kennedy of Southwark, a member may be able and fit to carry out his or her functions without being suitable to exercise them. This might arise, for example, if there was an irretrievable breakdown in the relationship between the member and the rest of the committee. A member might engage in activities such as filibustering deliberately to disrupt the committee’s work, but that falls short of being “unfit”. He would be being very effective in disrupting the work of the committee, so I am sure that noble Lords can understand the need for “unsuitable”.
Government Amendment 61 is a minor amendment that will update the Housing (Scotland) Act 2010 and the Equality Act 2010 to reflect the planned abolition of the Tenant Services Authority.
Lord Kennedy of Southwark
My Lords, before the noble Earl sits down, does he see the problem that we on this side see: that somebody can be deemed unsuitable just because they are making a point that the others happen not to agree with? It is not filibustering but that they are making a perfectly valid point, which is not agreed with.
Earl Attlee
No, my Lords, that would not meet the test of what is unsuitable. If the Secretary of State tried to use his powers to say that someone was unsuitable because he or she disagreed with other members of the committee, he would leave himself vulnerable to judicial review.
Lord Kennedy of Southwark
Would the noble Earl like to suggest the number of times you have to disagree before you are deemed to be unsuitable?
Earl Attlee
My Lords, I would imagine that a committee could have very free and frank discussions, perhaps lasting all afternoon, without falling foul of the test of unsuitability. On the other hand, if a member of the committee regularly interfered with the operation of the committee so that it could not function, the Secretary of State would have to step in.
Lord Best
My Lords, I will certainly not press the matter further. However, it is important for the Government to know that the housing sector is very concerned that this regulation committee is independent and that the people on it feel able to say things that are contrary to what the Government might wish to hear. That independence is paramount. I hope that that point has been taken. I beg leave to withdraw the amendment.
Lord Best
Amendment 67 stands in my name and that of the noble Lord, Lord Kennedy. It concerns the appointments made by the regulator. It is important to note that this amendment relates only to appointments made by the regulator where the housing association has not failed in any way. It is not a disciplinary measure but constitutes a voluntary helping hand for the organisation. In a number of cases that I know well additional members have been appointed by the regulator as new members of the board and have been very helpful. However, there are limits to the number of appointments that the regulator ought to make to the board. We suggest that these be limited in future to a maximum of four. In my experience three new people are usually appointed to strengthen a board that has become weak—four is quite enough. We are trying to protect the independence and sovereignty of these organisations.
Earl Attlee
My Lords, as regards the amendment moved by my noble friend Lord Shipley, I recognise the strength of local feeling in the case that he highlighted. We have looked at his proposal extremely carefully and have discussed it with the social housing regulator, the Charity Commission, the National Almshouse Association and the National Housing Federation. We have also received helpful representations from the United St Saviour’s Charity and from residents of the Hopton’s Almshouses in Southwark.
I fully understand the reasoning behind the proposed amendment. However, we are concerned that the amendment seems to require an increase in bureaucracy and potential state interference in the proper exercise of charity trustees' discretion. Currently, the identification of a new trustee is a matter for the existing trustee to decide and we are not convinced that new regulatory controls should be applied. The proposed amendment would apply only where the corporate trustee of an almshouse happens to be a registered provider of social housing. It is not clear that there is a strong rationale for requiring that these almshouse trustees, but not others, seek consent.
Lord Kennedy of Southwark
I know that the Minister was not tempted by the noble Lord, Lord Shipley, but can he give the House any assurance that the issue the noble Lord raised will be looked at seriously by the Government? I accept that this involves charity law, which is complicated stuff, but it also involves real people with real concerns and the Government should look at this seriously.
Earl Attlee
My Lords, I am confident that my department will continue to monitor the situation, but we cannot do anything further with this Bill.
Lord Shipley
Will it be possible for the evidence that the Minister referred to from the regulator, the Charity Commission and other bodies to be provided in the Library so that we can see exactly what evidence they have supplied to the Government that indicates that legally this is very complicated? Would the Minister agree that it would be good practice for consent to be received where a transfer is being proposed for almshouses? Would he consider and give advice on what other steps could be taken to ensure that consent for transfer from tenants is delivered?
Earl Attlee
With regard to the evidence, if I can give the noble Lord some more evidence I will, but I am not certain that I can. I believe there are some difficulties with his second request.
Lord Kennedy of Southwark
Before the Minister sits down, I shall press him on this point. In order to get time for this to be resolved, would he be able to facilitate a discussion between representatives of these organisations, the almshouses and their residents with officials and Ministers in the department?
Earl Attlee
My Lords, we will do whatever we can to assist a resolution of this problem. We will continue to monitor it, but my particular point is that there is not much more we can do with this Bill.
Lord Shipley
My Lords, when I moved Amendment 62, I quoted from the Minister’s letter which said that she was sympathetic to this case, so I am pleased that we seem to have ended on a note of sympathy and understanding of the problem. I think we need to try to find a solution to this. I repeat myself, but I do not think it is tenable for tenants of almshouses to be treated differently from tenants of other social housing or local housing. There is a principle at stake here. There may be legal complexities to deal with in this Bill, but I am very grateful for the assurance from the Minister that we can enter further discussions prior to Third Reading.
Earl Attlee
My Lords, I said that we cannot enter further discussions. We cannot use this Bill to solve this problem. I gave no such undertaking.
Lord Shipley
I understand the point that the Minister is making—that this Bill may not be the right forum for progressing the issue—but there will nevertheless be discussions about how the issue might be progressed in other ways.
Earl Attlee
My Lords, we are happy to continue work to resolve the issue, but not with this Bill.
Lord Shipley
I understand that situation. With that confirmation, I beg leave to withdraw the amendment.
Earl Attlee
“1A In section 122 (restriction on gifts and distributions by non-profit registered providers to members etc) after subsection (6) insert—
“(7) The Secretary of State may by order amend this section for the purpose of—(a) adding to the permitted classes, or(b) modifying or removing a permitted class added by order under this subsection.(8) Before making an order under subsection (7), the Secretary of State must consult—(a) the Charity Commission,(b) the regulator, and(c) one or more bodies appearing to the Secretary of State to represent the interests of registered providers.””
Earl Attlee
My Lords, in Committee, the noble Lords, Lord Best, Lord Patel, Lord McKenzie and Lord Beecham, tabled an amendment designed to liberalise Section 122 of the Housing and Regeneration Act 2008, which restricts the payments that housing associations may make to their members, and a similar amendment has been tabled again by the noble Lord, Lord Best.
The Government agree with the aim of the amendment and have put down our own amendments to achieve it. The amendments we have tabled would give the Secretary of State the power, by affirmative order, to add to the classes of permitted payments that housing associations may make to their members. Taking this matter out of the Bill will give us sufficient time to explore a new exemption that delivers greater flexibility while protecting public investment. Any order would be made only following consultation with the Charity Commission, the regulator and the housing association sector. I beg to move.
Lord McKenzie of Luton
We are grateful to the Government for responding to the earlier amendment. I acknowledge that the noble Lord, Lord Best, will not move his amendment, but are classes 4 and 5 specified in that amendment classes that the Government would support and take forward under the process that they have set down?
Amendment 63 refers to,
“modifying or removing a permitted class added by order under this subsection”.
Do the Government have anything in mind concerning modifying or removing a particular class?
Earl Attlee
My Lords, those are exceptionally good questions, but unfortunately I will have to write to the noble Lord.
Earl Attlee
“17 In section 320 of the Housing and Regeneration Act 2008 (orders and regulations)—
(a) in subsection (3)(a) (orders subject to approval in draft by each House of Parliament), after “114” insert “, 122”, and(b) in subsection (7)(a) (orders subject to annulment by either House of Parliament, and exceptions from that requirement), after “114” insert “, 122”.”
Lord Beecham
My Lords, I will follow the noble Lord, Lord Palmer, on the question of compensation. Clearly, the ombudsman route provides the possibility of compensation. It is not certain whether that would apply to the alternative route, which we debated at some length earlier. Perhaps the noble Earl could indicate whether under the alternative method of the designated person—a councillor, Member of Parliament or tenant panel—there will be the opportunity for a compensation payment to be made by the designated person. If not, we would have two systems, one of which would afford the possibility of compensation while the other would not. I am sure that the noble Earl much appreciated that word in his shell-like ear. In the event that we will have two competing systems, will the Government ensure that guidance is given to tenants that that is the case—in other words, that under one system they may get compensation while under the other they will not? The matter could be discussed in the forum to which the Minister referred. Strange circumstances could arise if the situation were not clear.
Earl Attlee
My Lords, Amendment 74 highlights the Housing Ombudsman’s power to order a member landlord to pay compensation to a complainant. I understand that my noble friend would like there to be greater clarity on how the ombudsman calculates the level of compensation to be awarded and I am grateful to him for raising the issue. Our view is that it is not necessary to include any new specific requirements in the Bill. In practice the ombudsman already provides a breakdown of any compensation he has decided to award, which is done in the context of what the ombudsman considers to be fair and reasonable in all the circumstances of the case. This arrangement allows flexibility to address specific issues and to provide a useful level of information, depending on the circumstances of each case. Clearly it would be difficult to attain this flexibility in a legislative duty on the ombudsman.
The ombudsman is intending to consult early next year on a revised statutory scheme to reflect the proposed extension of his jurisdiction to include complaints about local authority landlords, in addition to housing associations. I have no doubt that there will be further opportunities through that consultation process to engage on these and other issues. In answer to the question asked by the noble Lord, Lord Beecham, anything referred to the ombudsman means that compensation can be paid.
Lord Beecham
My question is in relation to the other routes that have been included in the Bill and which may be taken further in discussions before Third Reading. Would compensation be payable when the matter is dealt with by a local councillor, Member of Parliament or a tenants panel? If not, would that be made clear to the applicant, whereas the ombudsman would provide the possibility of compensation?
Earl Attlee
My Lords, in view of the complexity, a detailed letter would be appropriate.
Lord Palmer of Childs Hill
My Lords, I thank the noble Earl for his reply and the noble Lord, Lord Beecham, for his comments. I am quite confident that the monetary compensation would apply to all reports to the ombudsman, in answer to the comments of the noble Lord, Lord Beecham, so I have no worries on that score. My only comment is that for the sake of clarity in the ongoing negotiations and discussions, it would be useful for non-QCs to see that there is monetary compensation without having to go back to the 1996 Act. I very much thank the Minister for his reply and the reply from the noble Baroness, Lady Hanham. I beg leave to withdraw the amendment.
Lord Kennedy of Southwark
My Lords, I shall speak briefly to Amendments 75 and 76. They would ensure that the ombudsman’s service is not damaged by unintended consequences. What is wonderful about the ombudsman’s service is that compared with the courts, proceedings are informal, inexpensive and accessible. It is respected as its rulings are complied with by registered providers. The Government are proposing to solve a problem that noble Lords on this side of the House do not believe exists. We should be careful not to undermine the service. Will the Minister tell the House where the proposal has come from? Who has asked for it? How has it arrived here?
Earl Attlee
My Lords, the proposals relate to the proposed order-making power for the Secretary of State to enable the housing ombudsman to apply to a court or tribunal to enforce his determinations. One of our aims through our package of reforms to social housing regulation is to give a greater role to social housing tenants in the scrutiny of landlord performance. The Bill supports that by providing a clear role for tenant panels in the complaints process. In parallel, we are currently consulting on draft directions to the social housing regulator that will result in tenants having stronger tools with which to scrutinise landlords’ performance. The regulator’s consumer regulation role will be focused on setting clear standards and responding to failures that cause actual or potential serious detriment to tenants. Alongside these reforms we want to ensure that we continue to promise tenants an effective right of redress. The proposed power to enable the housing ombudsman to enforce his decisions through the courts—although I hope it is never needed—gives tenants confidence that effective redress will continue to be available.
The noble Lords, Lord Best and Lord Kennedy, give an accurate description of the current situation. There is not a problem. The Government would use this power only if levels of compliance with the housing ombudsman determinations declined significantly. At present compliance is high, as noble Lords have recognised. Only one recommendation has been rejected in the past seven years. We hope and expect that this will continue. If so, we have no intention of using this power.
Lord Kennedy of Southwark
Am I right that the noble Lord is saying that the Government are taking a power that they believe they do not need?
Earl Attlee
My Lords, it is wise to make sure that we have the order-making power should we need it. It concentrates the mind. As I said, we have no intention of using it unless the situation deteriorates. I suspect that it will not, but it is always advisable to have something in your back pocket.
Lord Kennedy of Southwark
That is a very interesting response. I have heard the exact opposite from the government Bench on many other proposals.
Earl Attlee
My Lords, I am confident that my department has properly considered those matters. It is obviously a very important issue and I have already undertaken to write to the noble Lord, Lord Best. Other noble Lords will of course get a copy, and there will be a copy in the Library.
Earl Attlee
Earl Attlee
My Lords, I beg to move Amendment 78 and speak to Amendments 79, 80 and 243. These amendments are four minor and technical amendments to the new clause that we introduced in Committee. These combine to remove a lacuna in the clause as currently drafted. They would mean that Section 214(3A), which enables the court to order that the deposit be repaid in part or in full to the tenant, would apply if the tenancy had ended at the date of the application to the court but not if it had ended after that date. Clearly this is not the intention of the legislation and I ask noble Lords to support this amendment. I beg to move.
Lord Kennedy of Southwark
My Lords, the Opposition accept that these are minor technical amendments and are happy to support them on that basis.
Earl Attlee
“(6A) After subsection (2) insert—
“(2A) Subsections (3A) and (4) apply in the case of an application under subsection (1) if the tenancy has ended (whether before or after the making of the application) and the court—(a) is satisfied that section 213(3) or (6) has not been complied with in relation to the deposit, or(b) is not satisfied that the deposit is being held in accordance with an authorised scheme,as the case may be.””
Lord Best
My Lords, Amendment 81 is about the exclusion of some rural dwellings from the preserved right to buy. Quite a few tenants who were previously in the public sector have become tenants of a housing association, through large-scale voluntary transfers. Those tenants, and indeed others in social housing, have the preserved right to buy: the opportunity, if they move around, to buy the place to which they move if it is another social housing home. However, if they wish to move into a home that falls under a Section 106 planning agreement, which provides that the property must be retained in perpetuity as a rented social housing home—that is; it is a condition of planning that a certain number of homes are for renting—they will be unable to do so because the landlord would be in breach of the Section 106 agreement. The preserved right to buy is rather paradoxically preventing people moving out of the council house that they are in at the time and into a new property that has been built under a Section 106 agreement.
This amendment excludes certain rural dwellings from the preserved right to buy, allowing the people to move in and not then be able to exercise the right to buy that property because of the Section 106 agreement and the restrictions on that property. This amendment would be helpful to people moving around—to tenants. It is unfair at the moment that they have to be turned away, even though the case is good, because the properties are restricted and cannot be sold into home ownership on a permanent basis.
During the summer, I received a lot of helpful correspondence from Ministers and the civil servants have been very helpful. On this matter, I had a reply which I think indicated that the point had not been fully understood by the civil servants. They have been marvellous in every other respect, but with this one aberration I did not get a satisfactory response. I am not entirely sure that the point was fully understood, which must have been my fault when making it in the first place. If this small, unintended consequence of legislation could be cleared up in the Bill, it would be helpful to the mobility of people in rural areas and in places where there are restrictions in the properties that have been built, thus helping mobility. I beg to move.
Lord Kennedy of Southwark
The noble Earl was a bit too quick for me. The Opposition gives its full support to the noble Lord, Lord Best, in moving his amendment on the exclusion of certain rural dwellings from the preserved right to buy. He is seeking to deal with an unintended consequence of the planning system. Many social homes in rural areas are built through Section 106 agreements. An issue can arise where housing is transferred from the local authority to housing associations. In these cases, existing tenants are given a preserved right to buy. When Section 106 agreements are used to build new social homes in rural areas, there is often a planning obligation which means that they must remain for social let. In those cases, tenants with a preserved right to buy are unable to move into these properties.
The amendment fixes an unintended consequence and the tenants would then have the right to acquire, which does not apply in rural areas. Therefore, the problem would not happen and the tenants in those situations can seek to move to social housing in rural areas if they wish. I hope that the noble Earl, Lord Attlee, can see that we are trying to be constructive and sort out a problem for everyone’s benefit.
Earl Attlee
My Lords, the noble Lord, Lord Best, in moving his amendment suggested that his point was not fully understood. He alarmed me somewhat because he talked about Section 106 and its consequences. Unfortunately, my notes do not refer to Section 106 and nor do the Q and As. If my response does not fully answer his question, I will of course write to him with further details.
Tenants who have been involved in a stock transfer from a local authority to a registered provider would have agreed to this transfer on the basis that they would retain their right to buy. We do not think that it would be proper to remove this right from the tenant. Equally, we do not think that it is right that secure tenants who are part of a future stock transfer should have their longstanding right to buy taken away simply because they live in rural areas and their homes have been transferred to a new landlord.
However, while we wish to ensure that transferred tenants are not denied their existing rights, there is statutory provision to ensure that the new tenants of these properties do not get the right to purchase their homes in order that the properties remain available to those in need of social housing. There are existing measures in place to ensure that homes in rural areas, which are sold under the preserved right to buy, remain available to people at affordable prices.
Landlords can already impose restrictions requiring owners who wish to sell to either resell only to people who have lived or worked locally for at least three years, or first offer their home to the landlord, giving them the opportunity to return the property to their existing housing stock if they wish to do so. These restrictions on reselling are already in place in a very significant proportion of our countryside and remain in place in perpetuity. In our view, this is sufficient.
I hope that I have met the noble Lord’s points. If I have not, I will urgently have a meeting with him and officials in order to further examine the issues.