Insolvency of Registered Providers of Social Housing Regulations 2018

Baroness Golding Excerpts

Tuesday 20th March 2018 Grand Committee

[Lord Shipley (LD)]

My Lords, I remind the Committee that I am a vice-president of the Local Government Association. It is important to support the regulations because it is in the interests of tenants that we should. It is also in the public interest that we should protect the Government’s investment in social housing within the regulated sector. As the Regulator of Social Housing has pointed out, its powers may not be strong enough if one of the bigger private registered providers gets into trouble financially. There has to be a robust mechanism for the handling of financial failure. I accept that the sale of houses that is not done to an agreed, coherent plan could impact negatively on the rights of social tenants, not least on the level of their rents. We need to protect them.

However, now that housing associations are in the private sector and there is, as the Minister reminded us, a higher level of debt finance than there used to be, I return to an issue arising from four Written Questions on the governance of housing associations, which the Minister answered on 20 February. They were about, first, whether the Government would be prepared to take steps to require Homes England to maintain a formal, publicly available register of directors of regulated housing associations; secondly, whether Homes England could be required to publish clear governance standards for housing associations to enforce strong independent director representation and responsibilities, in line with those applying to public companies; thirdly, whether the Government would take steps to require all housing associations to publish details of director attendance at meetings in their annual reports; and fourthly, whether the Government will require annual returns to be made available to the public free of charge, showing the levels of board remuneration of housing associations.

Various statements were made in the rewritten reply. I understand why they were, but two lines struck me as particularly important:

“The Secretary of State is not able to direct the Regulator on the governance arrangements of housing associations, and the Regulator has no plans to change the current approach”.


I ask the Minister a very specific question in the context of these regulations. If a housing association becomes insolvent and there are found to be problems in its governance that led to the insolvency, does that mean that the regulator may be found partly responsible for the insolvency of that housing association, because, as the Minister’s reply said, it has no plans to change the current approach? We need to be clear about the governance responsibilities of housing associations and of the regulator. Problems almost certainly will not arise but if they do, we need to be clear that a housing association—a regulated provider—has done everything it ought to have done about the openness of its governance structure.

[Baroness Golding (Lab)]

My Lords, may I just ask the Minister a question? The housing association in my area took control of all the council housing that had belonged to and was controlled by local government some years ago.

--- Later in debate ---

[Baroness Golding]

My Lords, I am sorry for that interruption. I wish to ask a very simple question. Some weeks ago the chairman of my local housing association, which took control of all the council housing in the area many years ago, announced that it was no longer a public provider but a private one. There have been arguments about what she said but, if it is now a private provider, will it come under the terms of the regulations?

[Lord Beecham (Lab)]

My Lords, I refer again to my relevant interests. Has there been any consultation with, for example, the Local Government Association about the possible role of local housing authorities in this situation? In other words, could they be another potential source—I am not sure what phrase I am looking for here—for taking over the responsibility, as opposed to it necessarily being another housing association? In certain areas it might be more feasible for the local housing authority to do that. If the Government have not considered that, could they now take a look at it?