Leaseholders and Housing Association Ballots

Albert Owen Excerpts

Wednesday 24th June 2015 Westminster Hall

[Albert Owen (in the Chair)]

I call the Minister to reply, and I welcome him back to his place.

[The Minister for Housing and Planning (Brandon Lewis)]

Thank you, Mr Owen, for calling me to speak. It is a pleasure to serve under your chairmanship for my first appearance in Westminster Hall in this Parliament. I appreciate your comments.

I congratulate the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) on securing this debate. Both he and my hon. Friend the Member for Worthing West (Sir Peter Bottomley) work very hard to raise issues for leaseholders and tenants generally; the hon. Gentleman’s particular interest is issues that affect the residents of Tower Hamlets. It is to the credit of them both that they continue to represent their constituents’ and the wider interests of people across the leaseholder sector. I am keen for us to find some common ground and a way forward, and I appreciated the chance to meet them both a couple of weeks ago; the hon. Gentleman referred to that meeting.

I know that the hon. Gentleman in particular has looked to explore the possibility of creating a new power that, as he outlined, would allow tenants of an underperforming housing association effectively to sack their association. I will express my specific views on that matter in a few moments, but I will say now that we would like to find a solution to the concerns that have been raised within the current framework of powers. That is achievable.

It is, of course, important that tenants are protected and sufficient safeguards are in place. The Localism Act 2011 gave tenants and their representatives the power to hold landlords to account. It enabled recognised tenant panels to play an important role in resolving complaints at a local level, and that was an important development. As the hon. Gentleman outlined, some of the changes have recently led to a big step forward, and we feel that that is right.

Landlord and tenant issues are often local issues. Clearly, the range and seriousness of those issues can vary, and it is right—absolutely right—that tenants are offered a level of protection at the national level as well. However, I am firmly of the view that, where possible, the issues themselves should be sorted out locally using the framework that we have put in place.

If it is clear that complaints cannot be resolved locally, obviously they can be referred by tenants to the housing ombudsman. When the ombudsman finds in favour of a complainant, they can order the landlord to pay compensation or take other steps to provide redress. Furthermore, it is open to the ombudsman or tenants to raise concerns directly with the regulator.

We would not want tenants to jump directly to the ombudsman; as I said, our view is that the vast majority of these issues can and should be resolved locally. The Homes and Communities Agency has a regulatory function, but it does not have the responsibility or power to mediate in or resolve individual cases. However, it will investigate where there is evidence of a breach of regulatory standards, and—in relation to landlord and tenant issues—serious harm. In extreme cases, it has far-reaching powers to intervene where there is evidence of serious mismanagement.

It may be helpful to give the House examples and outline the kinds of approaches that the regulator takes when issues are raised that it judges to be serious. I provide them to demonstrate how seriously the regulator takes its role. In February this year, it was found that a provider broke consumer standards owing to the poor quality of emergency repairs for many tenants over a very long period. A regulatory notice was published, representing the first time that such a finding had been made for widespread service failure. In April, the case took a further step forward when it was found that the underlying cause of the emergency repairs issues was a failure of corporate governance. As a result, the provider in question is now focusing on addressing the issues, and rightly so.

If non-compliance is not addressed, the regulator has statutory duties to intervene formally, which could lead to interventions in the management structure of a particular provider. It is right that the powers available to the regulator should be used only as a last resort. I provide that information to reassure the hon. Gentleman, and others who may read the debate in Hansard, that where issues are serious the regulator can and will take appropriate action.

Having outlined the current approach and the potential impact on housing associations, I want to spend a moment outlining some of the wider options available to housing association tenants themselves. Although it would not be legally possible for tenants to be given the right to sack their housing association, they have other routes to explore that would hand them a much greater degree of control.

Housing association leaseholders in blocks of flats have the right to manage. That enables a group of leaseholders to take over the management functions of their properties. The hon. Gentleman may draw a parallel with his proposals for tenants to have the power to sack their association. One area on which we might slightly disagree is my view that the power of right to manage is enough. The substantial, important difference between the approaches is that under right to manage the properties would still be owned by the housing association, which is different from the ability to manage them and ensure that repairs are done properly. I do not think it possible to draw a complete comparison in the way he outlined today and in previous debates. Leaseholders can also buy the freehold of their blocks of flats—known as enfranchisement—subject to certain criteria. Doing so would give them even greater financial and legal interest.

We have set out a clear policy ambition, which the hon. Gentleman outlined, to give housing association tenants the right to buy their homes to match the social housing opportunities in council housing at the moment and to ensure that everyone in social housing has the same right to buy. Tempting as his invitation to outline the details of the Bill this morning is, he will appreciate that I must ask him to bear with me until we publish the Bill and outline the details behind it in due course. I am hopeful that after the Bill receives Royal Assent, housing association tenants will be able to take the opportunity to move into home ownership.

I will touch on a couple of other points that the hon. Gentleman raised. He asked how the policy would be implemented, as did other hon. Members in an Opposition day debate in the main Chamber a couple of weeks ago. I will be very clear: as we have said all along, there must be one-for-one replacement. I am pleased that the reinvigorated scheme has one-for-one replacement; I am sure that the hon. Gentleman will excuse me for highlighting that we have seen the numbers move from one in 170 under the previous Labour Government to one for one under the reinvigorated scheme. Councils have three years to provide the replacement. If they have not done so by the end of those three years—although the indications at the moment make me confident that they will—the money, with interest, comes back to the HCA, which will provide the homes. It will be one for one.

I must stress our view that a new power to allow tenants of an underperforming housing association to sack their housing association is, with the framework already in place plus what we are looking at with the housing Bill, unnecessary and unworkable. A solution to the concerns raised must be achieved within the current framework. The hon. Gentleman has tempted me to accept an early amendment to a Bill that we have not yet published; I am sure we will discuss his idea later in the year when the Bill is introduced. My officials and I will happily liaise with him on that, but as tempting as his pitch was—and it is probably the first I have had so far—I suspect that we are on a slightly different page.

I hope that the outline I have given has been useful. I again congratulate the hon. Gentleman on bringing this issue to the attention of the House so early in the Parliament; he has made sure that the concerns and thoughts of leaseholders have been aired. I am keen to ensure that tenants know how to resolve their local concerns and that they fully understand and appreciate the powers and opportunities they have. I have to make it clear—the hon. Gentleman will already know this—that I cannot intervene in such matters personally, but I recommend that hon. Members and residents involved in such situations write directly to the regulator if they feel that any regulatory standards are, unfortunately, not being met.

[Albert Owen (in the Chair)]

I am grateful to the Minister. Under the new procedures in Westminster Hall, the Member who brought the debate has a right to reply, should he wish to.