Levelling-up and Regeneration Bill

Debate between Lord Young of Cookham and Lord Best

Committee stage
Thursday 20th April 2023 Lords Chamber

[Lord Best (CB)]

My Lords, I rise to speak particularly to my Amendment 438, but I will preface my remarks by saying how much I have appreciated this debate and the contributions from the noble Baroness, Lady Taylor of Stevenage, the noble Lord, Lord Stunell, and the right reverend Prelate the Bishop of Leeds. We have explored this issue in a comprehensive and useful way, and I greatly appreciate that.

I draw noble Lords’ attention to the Affordable Housing Commission report, which came out in the middle of Covid and was therefore buried and forgotten by everybody. The AHC report, which noble Lords can find via Google or their favourite search engine, was a pretty big effort, thankfully funded fully by the Nationwide Foundation—the Nationwide Building Society’s foundation—with a secretariat from the Smith Institute; I had the honour of chairing this. The report is a pretty meaty document and worth those who are interested in this subject following through, but that was a great debate on those amendments, and I support the essence of all of them.

My amendment 438, to which the noble Lord, Lord Shipley, has kindly added his name, seeks to remove from the statute book an obnoxious, offensive legislative measure which has hung over local authorities since the passing of the Housing and Planning Act 2016. I reiterate my declaration of interest as a vice-president of the Local Government Association. Back in 2016, I was the LGA president and along with allies from all parts of the House, including the noble Lord, Lord Porter, with his local government expertise, and the noble Lord, Lord Kerslake, we fought—unsuccessfully—to remove these awful sections from the 2016 Act.

What does this part of the Housing and Planning Act 2016 say, and why is it so troublesome? The key section imposes obligations on local authorities to sell their most valuable council housing when tenants move out, rather than reletting the property. It does so by requiring local authorities to pay a levy to the Secretary of State equivalent to the market value of the best council housing when it becomes vacant, multiplied by the estimated number of vacancies for the next year. To raise the money to pay this levy, local authorities would obviously have no option but to sell their most valuable homes. Most of the proceeds from these compulsory sales go straight to the Secretary of State, who, in a convoluted twist, would use the money to compensate housing associations for selling properties at large discounts to their tenants under an extension of the right to buy.

The effect of this extraordinary measure, had it ever been implemented, would have been highly damaging both for local authorities trying to meet the acute need for social housing in their areas and for the families desperately waiting for a home. Council housing would be further stigmatised and labelled as only for those with no hope of anything better, and with fewer re-lets, pressure on the remaining council stock would be even more intense than it already is.

Buyers of the housing which councils would be forced to sell would very often be private landlords who would let to similar occupiers but would charge market rents, thereby imposing twice the burden on the Exchequer for tenants in receipt of benefits. I was glad to catch up with the latest statistic from the noble Lord, Lord Stunell: that 50% of properties sold under the right to buy have been moved into the hands of private landlords and, obviously, let at rents that are twice as much, if not more.

To add insult to injury, the 2016 Act also empowered the Secretary of State to top up this raid on council resources by requiring local authorities to raise the rents to market levels for any tenant foolish enough to increase their income above a fixed level. The extra rent would not go towards management and maintenance of council housing but instead would be remitted to the Secretary of State as a windfall for the Government.

I moved an amendment opposing the measure and it was carried by a huge majority in this House. I even featured on the BBC documentary on the work of the House of Lords. Although it remains in law, it is another ingredient in the 2016 Act that thankfully has not seen the light of day.

Returning to the compulsory sales of higher-value council housing, as is addressed by the amendment, we can now see what a disaster this would have been—but the offending measure remains on the statute book. In reality, this sword of Damocles hanging over councils is no longer a major threat since Government Ministers have made it clear that they have no intention of using these draconian asset-stripping powers. Indeed, I am confident that Ministers understand the imperative for more, not less, social housing provision.

It was, no doubt, the work of an enthusiastic but naive special adviser coming up with a cunning wheeze to extract the cost from local authorities of securing new right-to-buy sales by housing associations. Today there would be little appetite for such shenanigans which would reduce the stock of available social housing, following the right to buy’s removal of 2.8 million council homes and the subsequent higher costs of using the private rented sector instead. Indeed, the right to buy has now been abolished in Scotland, and Wales is following suit.

Councils have welcomed the Government’s recent move enabling them to retain 100% of right-to-buy receipts for 2022-23 and 2023-24. With long waiting lists for social housing and the private sector becoming more and more unfeasible for many households, that announcement should support councils trying to replace the homes sold through right to buy. It would be helpful if the Government completed this change and made it permanent rather than just for two years. On this theme, I hope that the Government will finally agree to councils having the ability to set right-to-buy discounts locally as part of the Bill’s emphasis on devolution.

The time has surely come to be rid of this 2016 misguided measure to strip local authorities of their best housing assets. The LGA and others have been waiting for a legislative opportunity for the Government to enact their clear intention to have nothing to do with this defunct legislative device. The Bill provides that opportunity, and I think everyone in local government and in the world of social housing will breathe a sigh of relief to see this expunged from the statute book. I commend this amendment.

[Lord Young of Cookham (Con)]

My Lords, I wish to intervene briefly to put this debate in an important context. Before I do so, I commend the noble Lord, Lord Best, on eventually achieving the victory which he sought when the 2016 Act was going through; it was not the best piece of legislation on housing that Parliament has seen. I agree with what the right reverend Prelate said—that we should unfreeze the local housing allowance or, if we cannot, increase the discretionary housing grant, to enable those who find that they cannot meet the rent to have more support.

I also agree with the noble Lord, Lord Stunell, that “affordable” is a misnomer, but there is a fundamental choice that we have to make, which is: the higher the rents, the more social houses you can build; and the lower the rents, the fewer social houses you can build. That is simply because of the way that social landlords are funded. A Government decide to have a capital fund available for new builds. A Government of a different persuasion may have a higher figure than the current one but, whatever that figure, the number of houses that can be built is dependent on the rent levels which the social landlords can charge.

A Housing Minister has a choice: you can have lower rents, social rents or genuinely affordable rents, but you will get less output. When I had responsibility and was faced with this spectrum, I went for slightly more output but slightly higher rents, to meet the demand for new houses and to build more houses that would last 60 years. I recognise that others may choose to go the other way on the spectrum, but you cannot get away from the fact that this is the choice. If you want to have affordable rents reduced to social rents, the consequence is that you will have fewer houses. I make this intervention at the end of this debate just to put it in a slightly broader context.

Police, Crime, Sentencing and Courts Bill

Debate between Lord Young of Cookham and Lord Best

Committee stage
Wednesday 24th November 2021 Lords Chamber

[Lord Best (CB)]

My Lords, my Amendment 320 and the consequential Amendment 328 are—slightly surprisingly—in this group. Together, they would finally repeal the Vagrancy Act 1824, which makes homelessness a criminal offence.

I am grateful to the homelessness charity Crisis for devising these well-crafted amendments. I am most grateful to the noble Baronesses, Lady Thornhill and Lady Bennett of Manor Castle, the noble Lords, Lord Young of Cookham and Lord Sandhurst, and the noble and learned Lord, Lord Falconer of Thoroton, for adding their names to these amendments. They join the long list of distinguished parliamentarians, including William Wilberforce in the 1820s and Winston Churchill in the 1930s, who have opposed this objectionable legislation. Indeed, last month the Prime Minister himself spoke out, saying:

“No one should be criminalised simply for having nowhere to live, and I think the time has come to reconsider the Vagrancy Act”.—[Official Report, Commons, 20/10/21; col. 752.]


Since there can be no objection from the Treasury, as there is no expenditure involved, it seems, therefore, that the moment has arrived. After almost 200 years, the antiquated and misguided Vagrancy Act can at last be laid to rest.

Certainly, the importance of repealing the Act remains, although I will not repeat my Second Reading speech on this theme. Suffice to say, punishing people for being homeless is entirely the wrong approach. Fining people up to £1,000 for sleeping rough or begging and giving them a criminal record is surely a travesty, making their recovery and reintegration into society more difficult than ever. It inhibits the referral of those sleeping rough to the community and social services that can help them, and as long as being homeless is itself a criminal offence, homeless people are deterred from engaging with the law when they are the victims of dreadful violence and abuse, as they so often are.

I note that rough sleepers are 17 times more likely to be victims of crime than the rest of us. Among the examples provided by Crisis, I note the quote from a man in Oxford, who said that

“in my nine years on and off the street, I was violently attacked, shouted at and even urinated on by total strangers. Enduring this abuse was hard enough—I didn’t expect the law to hold my very existence against me.”

Other case studies from Crisis demonstrate just how counterproductive the Act is in blocking the chance for agencies to help and instead penalising and fining those least able to pay.

However, it is now clear that, to the highest levels of government, Ministers have accepted the case for repeal. Nevertheless, in case there are any lingering doubts or hesitations, perhaps I could offer some observations on possible objections to these amendments.

First, securing this repeal has been inhibited to date by the problem of finding the parliamentary time for the Government to do what they want to. Clearly, this obstacle is behind us now that the Police, Crime, Sentencing and Courts Bill provides the opportunity for this to be expedited right away. Indeed, it would absorb far more parliamentary time if the Government were to prepare a fresh Bill to be taken through its 10 stages in the two Houses. It would also take more time if the Government turned down the opportunity before us and required these amendments to go to a vote, with all the extra toing and froing that this would entail. Missing this moment now would surely mean a long, frustrating and pointless wait for the next legislative opportunity, which might be years away.

Secondly, there is the objection that the amendments themselves need revising. The Minister raised such an objection at Second Reading: she noted the devolution implication, given that it extends to Wales. This is an important point and has now been the subject of discussion with the key people in Wales. Welsh Government Ministers have themselves advocated a repeal, and the Ministry of Justice has now been notified that the Welsh Government have indicated their full support for the amendments to apply to Wales as well as England. The necessary legislative consent Motion from the Senedd is scheduled once further amendments are made to the Bill. A tweak to the amendments before us has been prepared to embrace this Welsh dimension, and this can be brought forward, I hope with government approval, on Report. The devolution issue here is one of extra support from Wales. I add that the Vagrancy Act has already been successfully repealed in Scotland.

Thirdly, it might be argued that there are still parts of the original legislation covering aggressive begging and anti-social behaviour which need to be preserved, complicating any repeal of the Act. However, this line of argument ignores the far more extensive powers now available under other legislation, notably the Anti-social Behaviour, Crime and Policing Act 2014, to which I believe the noble Lord, Lord Sandhurst, will draw attention.

There are compelling arguments for the police to use these powers very sparingly in so far as they embrace homeless people, but it cannot be said that the necessary powers do not exist. To support necessary action by front-line police, Amendment 320 includes the totally non-contentious but none the less valuable subsidiary provision for updated guidance on the 2014 Act to be disseminated, promoting the preventive approach now adopted by most police forces.

Fourthly, it is said that it is not worth bothering with repeal of the Vagrancy Act since the number of people charged under it has been declining. However, the Act is still used as a fallback, even though other, more appropriate measures are available. Under pressure from local members of the public, the Act is still deployed.

Moreover, the symbolism in this repeal should not be underestimated; it demonstrates a more enlightened understanding of homelessness. The Government could be rightly proud of making this symbolic gesture alongside their good work in responding to homelessness in the pandemic with their Everyone In initiative; their support for the Homelessness Reduction Act 2017, Bob Blackman MP’s Private Member’s Bill, which I had the honour of taking through your Lordships’ House; and their excellent funding for the Housing First projects.

The Government have the laudable objective of ending homelessness by 2024. Removing the barrier of the Vagrancy Act that still hangs over homelessness policy must be an essential step in this direction. I hope the Minister will agree that there really are no arguments for further delay. It has been over three years since the Government committed to look again at this issue and no difficulties have been uncovered. It is almost 200 years since this controversial measure was enacted; let us not kick the can any further down the road. At last, here and now, we have the opportunity to get this done.

I would be delighted to meet Ministers to discuss any further tweaks that could improve these amendments before Report, an offer I am sure goes for the other noble Lords supporting these amendments. Because of the way amendments have been grouped today, I will not be invited to sum up the position after the Minister’s response, so perhaps I can be clear now that I intend to take these amendments to a vote on Report if we are unable to agree a form of words to repeal the 1824 Act. However, I hope it will not come to this and I eagerly anticipate the Minister’s response.

[Lord Young of Cookham (Con)]

My Lords, first, I will say a brief word on Amendment 292J, proposed by noble Lords on the Public Services Committee, on which I and my noble friend Lady Wyld also serve. It backs one of the recommendations made in last week’s report and I support the case being made. Indeed, on 25 October, I tabled an amendment with the noble Baroness, Lady Blake, to help exactly the same group as mentioned in this amendment, namely children at risk of domestic violence and criminal exploitation. In that amendment, I argued for them to be given housing priority, so I hope the Minister will reply sympathetically to the case made by the noble Lord, Lord Hunt, and others.

I have added my name to Amendment 328, which is consequential to Amendment 320, tabled by the noble Lord, Lord Best. I add a brief footnote to what he said, in support of the campaign which he has long championed. On 23 April 2020, in an Oral Question about the Vagrancy Act 1824, I asked the Minister if he agreed that

“attitudes to those who sleep rough have softened over the past 200 years and that legislation which refers to ‘idle and disorderly’, ‘rogues’ and ‘vagabonds’ living in ‘coach-houses’ and ‘stables’ has no place in modern legislation”.

Later in that exchange, the noble and learned Lord, Lord Judge, weighed in, saying:

“If Section 4 of the Vagrancy Act, which was enacted after repeated harvest failures created an army of the dispossessed, were presented to us today, beyond the archaic language to which the noble Lord, Lord Young, has already referred, we should reject it as being vague and uncertain, and arguably tarnished with an improper reverse burden of proof.”—[Official Report, 23/4/20; col. 84.]


We have heard the Prime Minister’s words on this. The former Secretary of State at the then MHCLG said that, in his opinion, the Vagrancy Act, whose short title is

“An Act for the Punishment of idle and disorderly Persons, and Rogues and Vagabonds, in England”,


should be repealed. As the noble Lord, Lord Best, said, here we have an amendment that would deliver government policy. At Second Reading, the Minister said she was sure the House would hold her to account on her assurance that she was on the case—so here we are.

This is not the first attempt at repeal. On 17 August 1911, Sir William Byles asked the Home Secretary

“whether the new Recorder of Liverpool, Mr. Hemmerde, K.C., has just sentenced a young man, Edward Gillibanks, to twenty-five strokes with the birch, in addition to twelve months’ hard labour, for being an incorrigible rogue; and whether, in view of the effect of this form of punishment, he will consider the desirability of proposing the repeal of the Vagrancy Act”.

The Home Secretary, one Mr Churchill, replied:

“I cannot say that I think the punishment inflicted on him supplies an argument for repealing the Vagrancy Act.”—[Official Report, Commons, 17/8/1911; cols. 2103-04.]


Let us hope we fare a little better today.

It is now common ground that the Act does nothing to resolve or tackle the causes of homelessness. On the contrary, by directing rough sleepers down the criminal justice route, it risks isolating them from the very sources of help now generously provided by the Government, which can help them to rebuild their lives.

The right approach is set out in the thoughtful and comprehensive approach of Westminster City Council, detailed in its rough sleeping strategy, which outlines how rough sleeping can be sensitively handled in a borough to which the magnetism of the capital attracts so many. Every rough sleeper is offered a personalised and sustainable route away from the streets, based on their circumstances. The council has remodelled its services to accept women, who make up some 17% of rough sleepers, and can accommodate women who will not be parted from their dogs.

Westminster also makes it clear that it needs powers to deal with those who behave aggressively or anti-socially. The amendment contains the necessary provisions and my noble friend Lord Sandhurst will refer to other provisions on the statute book to deal with unacceptable behaviour. We have the perfect vehicle to bring our legislation up to date. I hope we are pushing at an open door and I look forward to the Minister’s gracious speech of acceptance.

Tenant Fees Bill

Debate between Lord Young of Cookham and Lord Best

Committee: 1st sitting (Hansard): House of Lords
Tuesday 20th November 2018 Lords Chamber

[Lord Best (CB)]

My Lords, it is worth underlining that this part of the Bill is an important measure to prevent what is a pretty common abuse, which is, when there is a change of tenancy, at little or no cost to the landlord, the agents involved making serious amounts of money, which the Bill would prevent them doing in future.

At Second Reading, I cited an illustration from my last intern, whose sister was taking her place in a flat share of three. Each of them, on entering the flat, needed to pay the agent a fee of £275 for the privilege of signing up. When one of the occupiers left and was replaced by her sister, the outgoing one was charged £250 for termination of the tenancy agreement and her sister, who was moving in on the same day with her packed suitcase, was charged £275 as a new tenant. The agents got £525 for this transfer from one sister to another. The landlord received exactly the same amount of rent, because there was no discontinuity in the rent paid.

In such circumstances, paying £50 as a takeover fee for the privilege of signing a photocopied document when one person moves in in place of another sounds quite enough. The guidance may be the best place to put this, but the test must be whether the landlord has suffered a loss of rent. If there is no such loss, surely the £50 should kick in as the maximum which the agents can take. One can understand the need to compensate if there has been a loss of rent because of a gap when one tenant has moved out and no new one has arrived. Otherwise, £50 sounds like a maximum not a floor.

[Lord Young of Cookham (Con)]

My Lords, I am grateful to all noble Lords who have taken part in this short debate relating to the charges that can be imposed for variation, assignment, novation or termination of a tenancy where these are requested by the tenant. We have previously set out that it is not fair to ask landlords and agents to pay reasonable fees where these arise from the action or request of a tenant. Following pre-legislative scrutiny, we clarified that both early termination and change of sharer costs were permitted, so long as these were fair. As a result, the Bill provides that a landlord or agent can charge a tenant in these circumstances, but such fees are capped at £50—one-tenth of the fee charged in the case cited by the noble Lord, Lord Best—or reasonably incurred costs if higher.

Amendments 27 and 28 seek to impose a hard cap on the amount that can be charged and to prohibit this charge in relation to a change of sharer. When considering how to manage these amendments, we share the caution mentioned by the noble Earl, Lord Lytton. We want to ensure that landlords and tenants can agree reasonable requests to vary a tenancy. Although we do not expect this charge to exceed £50, it is only fair that, where it does so, landlords and agents are able to recover their reasonably incurred costs. For example, if a landlord is required to undertake a search, conduct reference checks and amend tenancy deposit protection arrangements for a new tenant with no help whatever from the outgoing tenant, those costs may be higher than normal. Landlords and agents will need to be able to demonstrate, if challenged, that their costs are reasonable. They will have to justify them and, if they cannot do so, trading standards officers may have a case to investigate.

Crucially—this point was mentioned by the noble Earl, Lord Lytton—we do not want to create a situation where landlords are reluctant to agree to a change of sharer because they do not believe they can recover their reasonable, justifiable costs. This would not help tenants, who would be required to break their contract if they wanted to leave, nor would it help those hoping to move in to replace the sharer moving out. This matter was discussed during pre-legislative scrutiny and tenant representative bodies recognised the need for the ability to charge in such circumstances, provided that the risk of abuse was mitigated, which we have done by imposing a cap of £50 and requiring any additional costs to be reasonable. In its report, the Housing, Communities and Local Government Committee said that:

“We welcome the Government’s intention to clarify the legislation and to permit charges related to a change of sharer where these are requested by the tenant”.


Amendments 29 and 30 would place an obligation on the landlord to take reasonable steps to re-let the property where they have agreed to terminate a tenancy early. These amendments would also limit the loss a landlord can recover to the period reasonably required to find a new tenant, even if he was unable to find one.

An assured shorthold tenancy is a contract where a tenant commits to pay the landlord rent for a given period of time, the fixed term. The landlord is entitled to the rent for the entirety of that term. If the tenant seeks to leave the tenancy before the end of it, then they would need to seek agreement of the landlord to do so. Where possible, landlords should agree to this, and can ask the existing tenant to find a suitable replacement. We encourage them to do so through our guidance.

Turning to the amendment introduced by the noble Baroness, Lady Grender, paragraph 6(2) of Schedule 1 says:

“But if the amount of the payment exceeds the loss suffered by the landlord as a result of the termination of the tenancy, the amount of the excess is a prohibited payment”.


In other words, the landlord can only recover any loss they incur in permitting a tenant to leave early. They cannot double-charge for the same period of time. They are entitled to recover only the sum of any rental payments which would not be met by the start of a new tenancy. If a replacement tenant is found and there are no void periods, we would expect no early termination charge to be levied to the outgoing tenant. This has been reiterated in the consumer guidance for tenants and landlords, and we welcome the constructive comments made by the noble Baroness on our draft guidance.

However, looking at the amendment, we cannot necessarily expect landlords to know how long would reasonably be required to find a replacement tenant. This depends on several factors, including the rental market in the local area. Therefore, we expect landlords and tenants to consider on a case-by-case basis the likely void period and any reasonable charge for early termination. Again, we do not want to harm tenants by disincentivising landlords agreeing to a reasonable request to end a tenancy early or to a variation of a tenancy. That is not what this Bill is seeking to achieve, but there is a real risk of this if the amendments are agreed to. On that basis, I hope that the noble Baroness will withdraw her amendment.

Tenant Fees Bill

Debate between Lord Young of Cookham and Lord Best

Monday 5th November 2018 Grand Committee

[Lord Young of Cookham]

I hope the noble Lord will accept that, unlike other occasions when new responsibilities have been imposed on local authorities, in this case we are actually offering to help them with some pump-priming finance before the revenue stream comes on board. I hope he will accept that this is a welcome step forward from other initiatives taken by Governments of all complexions, where local authorities have been asked to do things with no resources at all and no opportunity of self-funding downstream. I can only repeat what I read out a few moments ago: the Government estimate that local authorities will incur a new burden in respect of enforcement of £500,000. I will make detailed inquiries to see if we can shed more light on exactly where that sum came from and will write to the noble Lord, with copies to other Members who have shown an interest. I will do that before Report.

[Lord Best]

Will the proceeds of the financial penalties be hypothecated for more enforcement? Trading standards officers work very hard in very difficult circumstances, after all the cuts they have had to face. The danger is that the fines come in but go into the big pot of local government finance and are used—poor old local authorities have many other calls on their time and money.

[Lord Young of Cookham]

I am happy to give the noble Lord the assurance that he seeks that the money will be reimbursed to the relevant section of the local authority that enforces this legislation and other related legislation dealing with rogue landlords.

Legislative Reform (Regulator of Social Housing) (England) Order 2018

Debate between Lord Young of Cookham and Lord Best

Wednesday 23rd May 2018 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, the draft order we are considering today is, I hope, a largely uncontroversial one. Indeed, it passed through the other place without a debate. It seeks to establish the Regulator of Social Housing as a stand-alone body. It implements the recommendation in the Tailored Review of the Homes and Communities Agency to establish a stand-alone regulatory body for social housing. In so doing, it removes any possibility of a potential conflict by separating out the regulatory function from the organisation, which is also responsible for investment. It will not, however, change how registered providers of social housing are regulated or how they operate on a day-to-day basis.

That is not to say that this change is insignificant. The change will ensure the continuation of independent and robust regulation of the social housing sector. At the moment, the regulation of social housing is the responsibility of the regulation committee, a statutory committee of the Homes and Communities Agency. While the organisation responsible for undertaking this function refers to itself as the Regulator of Social Housing, it remains legally part of the Homes and Communities Agency. It is independent from government and is crucial in underpinning investor confidence in the social housing market.

In 2016, the then Department for Communities and Local Government conducted a tailored review of the Homes and Communities Agency. The review was forward-looking and focused on the challenges faced by the agency. In respect of regulation, the review found there was a compelling case for change of the regulator’s structure. In recent years, the Homes and Communities Agency has expanded into commercial investments. This makes the agency, in some cases, both a secured creditor and regulator of registered providers. This potential conflict of interest did not exist when the decision was made to incorporate social housing regulation within the Homes and Communities Agency as, at that time, the agency’s funding predominantly focused on grant-making.

I should make clear that existing governance arrangements and an operational “ethical wall” have ensured that information has not been inappropriately exchanged between the regulation and investment functions. However, the financial landscape of the sector continues to evolve and become more complex. Because of that, it becomes ever more important that the Homes and Communities Agency and the regulator are best positioned to adapt to such changes and that commercially sensitive information is safeguarded. Moreover, it is crucial that the regulator is perceived to be adept at handling such complexities, so as to uphold lender confidence.

The regulator’s role and functions are set out in the Housing and Regeneration Act 2008, as amended by the Localism Act 2011. As a result, changes to primary legislation are needed to deliver a stand-alone regulator. We have used the powers in Section 2 of the Legislative and Regulatory Reform Act 2006 to deliver these changes through a legislative reform order. The order ensures that social housing regulation is made more consistent with better regulation principles by providing for greater accountability and transparency for regulatory activities.

I should also make an important point about legislative reform orders. They are intended to be used either to reduce the overall burden of regulation or to ensure that regulation is carried out in a more transparent or proportionate manner. They cannot be used to create new, or vary existing, regulatory functions. That means the current provisions on the regulatory and enforcement powers of the regulator contained in Sections 192 to 269B of the Housing and Regeneration Act 2008 remain effectively unchanged by this legislative reform order. These provisions set out the regulatory framework, for example around the economic and consumer standards that can be set and how they are monitored. They also cover enforcement powers at the regulator’s disposal, for example, to impose penalties or to award compensation in the event of failure by a housing association. So—to anticipate points that noble Lords may wish to make—changes to how the sector is actually regulated are better considered as part of the forthcoming social housing Green Paper. What this legislation will do, however, is to put in place the arrangements for a robust and independent regulator ready to adapt to any policy changes that may arise from these reviews.

A crucial part of the process of delivering changes through a legislative reform order is that there is public consultation on both the changes proposed and the use of a legislative reform order to deliver them. The department conducted a consultation in early 2017. While the number of responses was relatively small, they were overwhelmingly in favour of the move, including from the sector and investors.

I turn briefly to the specifics of the LRO. In effect, this order reverses the changes made by the Localism Act 2011 and removes the regulator from the Homes and Communities Agency, thereby making it a stand-alone, independent body. The detailed provisions that do this are set out in Schedule 1 to the order. Part 1 of the schedule establishes the regulator and transfers functions from the HCA to the regulator. Part 2 makes amendments to other legislation consequent upon the creation of the regulator. Part 3 provides for the transfer of property, rights and liabilities from the HCA to the regulator. Finally, Part 4 of the schedule provides for transitional and savings provisions consequent upon the transfer of functions.

To conclude, the creation of a stand-alone Regulator of Social Housing is a necessary change that will ensure that the sector continues to be regulated effectively. This is essential if we are to ensure that the financial markets continue to have confidence in the sector and to allow housing associations to invest in providing the homes that we need. I commend this order to the House, and beg to move.

[Lord Best (CB)]

My Lords, the argument over whether the grant maker for social housing and the regulator for social housing should be the same government body has raged for 45 years. I was in the midst of the argument back in 1973, representing the housing associations as chief executive of the National Housing Federation. The Housing Corporation was being greatly enlarged by the Housing Act 1974; it had been created 10 years earlier, but only to promote cost rent and co-ownership housing. My federation concluded that that the Housing Corporation, as the body responsible for paying out housing association grants—which frequently covered 90% of the capital costs in order to keep rents low—should also be the body responsible for regulating these organisations. Regulation meant registering each housing association as fit and proper and then visiting it to monitor performance, ensure probity, and so on. These regulatory processes to ensure good governance were of critical importance to the funding agency before it could allocate substantial government subsidies to the fledgling housing associations. It was natural then for the grant-making and regulatory functions to be combined.

With the arrival of housing benefit—the personal subsidies to tenants—charging higher rents created fewer problems and the Housing Corporation could reduce grants somewhat without those on lower incomes having to be turned away. The Minister was Housing Minister at the time. When it fell to him to oversee cuts to the Housing Corporation’s grant making, he could declare, with some justification, “Let housing benefit take the strain”. Moreover, loans from the Housing Corporation became increasingly less relevant after the Housing Act 1988, under which the housing associations could borrow the money they needed on the private market. So the dominant funding rule of the Housing Corporation was changing.

Increasingly, the combination of funding and regulatory functions within the one agency looked less relevant, and the earlier requirement for combining the roles in one body was becoming strained. The Labour Government, with Yvette Cooper as Housing Minister, in 2007 appointed Professor Martin Cave from Warwick University to review the position. Professor Cave argued convincingly that these were two different roles, requiring different skills. Indeed, Cave pointed out the potential conflicts of interest if the funder and regulator were one and the same.

Housing Associations

Debate between Lord Young of Cookham and Lord Best

Thursday 8th February 2018 Lords Chamber

[Lord Young of Cookham]

The noble Baroness will know that, for any given sum of public investment in housing, you can build either more houses at slightly higher rents or fewer houses at slightly lower rents. In 2010, her party and mine decided to go for the higher-output option. That was the right decision at the time to make faster progress in adding to the stock of good-quality, permanent homes for rent. In October last year, the Prime Minister announced an extra £2 billion for affordable housing and made it clear that a big chunk of that should be redirected towards social housing, as the noble Baroness suggests. We have listened to the representations from housing providers. The £2 billion will be available for social rents as opposed to affordable rents, and by lifting the cap on what local authorities can borrow we are enabling local authorities to build more council houses.

[Lord Best (CB)]

My Lords, the Minister knows that tens of thousands of affordable homes have been produced by requiring the housebuilders to include a percentage of affordable housing in all their big new developments. He will also know that over recent years the housebuilders have found a loophole—the so-called viability test, a specious argument—to renege on those obligations. Can he reassure the House that the Government are going to close this loophole, which is just a scam to enable the housebuilders to get out of the agreements that they have already made and increase their profits?

[Lord Young of Cookham]

The noble Lord makes a valid point. We are concerned at the way in which certain housebuilders use the viability test to reduce the percentage of homes on their sites for social housing. We are reviewing the viability test with a view to increasing the original intention on these sites to have a fixed percentage of social housing units.

Housing: Rental Market

Debate between Lord Young of Cookham and Lord Best

Thursday 2nd November 2017 Lords Chamber

[Lord Young of Cookham]

I am not sure that I would sign up for a short-term letting on those sorts of terms, which sound penal. Many landlords would rather have their property occupied throughout the year rather than for up to 90 days and then not used for the rest of the year. The balance we have tried to get in London is to safeguard the stock of long-term accommodation for rent by Londoners with the freedom for Londoners, when they are not using their home themselves, to let it out to other people who want to rent it.

[Lord Best (CB)]

My Lords, does the Minister agree that the real deterrent for landlords letting on the open market to people on lower incomes is the policies of the Department for Work and Pensions, which mean that, if the tenant is on universal credit, the landlord will not get any money for six weeks and will then not get the full market rent and therefore is having to make a sacrifice? With those deterrents from the welfare system, is it not likely that homelessness will rise as private landlords increasingly will not accept anybody who is on a low income?

[Lord Young of Cookham]

The noble Lord is right to raise the issue of universal credit. It is one of the issues that is now being looked at as we run up to the Budget later this month. We will also have a debate on universal credit later this month, before the Budget, when he can make the point again. However, in certain circumstances the rent can be paid direct to the landlord in order to provide the security of income that the landlord may need.