Housing and Planning Bill

Lord Kerslake Excerpts

Tuesday 8th March 2016 Lords Chamber

I issue a general call to housing associations not to sell these homes in these circumstances. However, I make a particular call to the Minister to listen to the comments that have been made and, whether or not she feels that the particular amendments are right, to accept that there should be a role for the communities that have given permission in these exceptional circumstances to say no to a sale, as well as to the housing association. This is one area where I do not think it should be entirely at the discretion of the housing association. At the very least, if that sale is made and there is still the local need, there should be a guarantee that that funding will be spent within that local community to provide replacement homes. However, if there is a breach of faith on the understanding that these homes built on exception sites where housing would not normally be allowed was done with the support of the community on the basis of in perpetuity, I find it hard to believe that many communities will willingly step forward to offer another site on the same basis that they offered the previous one.

[Lord Kerslake (CB)]

My Lords, I declare my interest as president of the Local Government Association and chair of Peabody. It is important to be clear that when housing associations signed up to the voluntary agreement, as Peabody did, they did so because they believed that it was the lesser of two evils. The alternative, as my noble friend Lord Best has very clearly described, was a mandatory scheme that would give much less flexibility and would, in effect, have made certain the prospect of being regulated, rather than a possibility of deregulation and being outside the public spending arrangements. The choice was difficult but was on balance rightly made to go for the voluntary agreement. However, we should not confuse that with an enthusiastic endorsement of government policy. We should be clear about that point.

This undoubtedly has created some tensions with local government. We should not beat about the bush here: local government feels that it is now picking up the bill for that voluntary agreement, and that housing associations sorted themselves out and left local authorities in a difficult position. I acknowledge that feeling, which I have had expressed to me—very directly, I should say—by a number of councillors from across London. There is work to be done by the national federation, and, indeed, by housing associations, to rebuild some of the connections they had with colleagues in local government. I applaud in particular the initiative by the g15 group and David Montague, the chief executive of London and Quadrant, to go out and talk to local authorities about the reasons why the decisions were made on the voluntary deal and where it led. That bridge-building has to happen, and it is an important part of the debate between what should be very strong partners—housing associations and local authorities.

It is in the nature of a voluntary agreement that it is very hard to build in statutory protections without taking yourself straight back to the issue of regulation. That is the problem: in a sense, we are trying to put statutory protections into a voluntary agreement. In the end, this is a voluntary agreement that is going to have to rely on a great deal of trust—first, trust that the Government will honour the spirit of the agreement and not force housing associations through the regulatory process to sell what they do not want to sell. In the case of Peabody, a critical issue for us is that 10,000 or more of our properties were built without any government subsidy touching them at all. We would not want to sell those properties, and we do not intend to do so. We must trust the Government and the regulatory body, the Homes and Communities Agency, to respect the spirit of that choice.

The second element of trust is that housing associations must deliver and honour the replacement process. It is critical that that replacement, so far as is practical, is in the same place and of the same type. It is not going to be acceptable to replace a social rented property with a starter home 20 miles away; that is not the same thing. It is particularly not the same thing in a rural area.

The third thing we are going to have to trust is that housing associations understand the fine grain of their area and work closely with their local authorities to get this right, particularly in rural areas, where the choices are very constrained—I may have left a rural area for the bright lights of the city, but I know exactly what the issues are. So we are going to need to exercise a lot of trust and if it does not work out, there may have to be future such debates. In the mean time, the amendments from my noble friends Lord Best and Lord Cameron are the best we can achieve by way of protections in the current circumstances.

I leave until last the issue I am most concerned about: the nature of the discounts and their financing. However, we will return to that in a later amendment.

[Baroness Royall of Blaisdon]

My Lords, on a point of clarification, the noble Lord said that Peabody, rightly and understandably, will have thousands of homes that it does not wish to sell. What will a housing association like Peabody do in relation to portability?

[Lord Kerslake]

As has been said by a number of people, there are real issues about what we mean by a portable discount. In my eyes, if we are unable or unwilling to offer a property or take a policy decision not to do so, the alternative discount may be offered on another housing association property, potentially one of Peabody’s newbuild properties—we build some 1,000 properties a year. I have real difficulty with an open-ended portable discount, particularly those into the private sector, which the noble Lord, Lord Young, is very keen on. That is for one very simple reason: it will be extraordinarily expensive—I do not know whether anybody has done the maths on this. There are major issues about the financing of this policy already, which we will come on to. In my view, it should not be an open-ended offer: it should involve a reasonable effort—as per the original wording—to find a suitable alternative if the property you live in is not currently on offer.

[Lord Young of Cookham (Con)]

My Lords, I shall make a brief contribution to what I suspect is the most controversial part of a fairly controversial Bill. The background is two sentences in my party’s election manifesto:

“We will extend the Right to Buy to tenants in Housing Associations to enable more people to buy a home of their own. It is unfair that they should miss out on a right enjoyed by tenants in local authority homes”.

As the noble Lord, Lord Best, explained, that is being delivered not by legislation but by a voluntary agreement. This clause allows the Government to honour their side of that voluntary agreement by enabling them to pay grants to housing associations for the discount they give to their tenants. The amendments would not stop the housing associations selling anything to anyone, but they would stop the Government giving a grant to the housing associations if they do.

--- Later in debate ---

[Lord Kerslake]

The point I was making was that the wider the choice of opportunities to buy you give tenants of housing associations, the more likely it is they take up the offer of a portable discount, and the cost will therefore be higher. We will return to how this is financed, but I have a real problem—as I will say later—about a policy that effectively controls the spend by having to say no to people whom you previously promised you might say yes to.

[Lord Young of Cookham]

Whichever route one goes down, whether the discount is available in the open market or restricted to housing association properties, it comes out of a pot of money which is going to be restricted in any event, so I am not sure that the noble Lord’s point is entirely valid.

The noble Lord, Lord Beecham, started his remarks with a prediction that this voluntary agreement would not survive a change of Administration.