Draft Regulation of Social Housing (Influence of Local Authorities) (England) Regulations 2017

Chris Heaton-Harris Excerpts

Monday 6th November 2017 General Committees

[Tony Lloyd (Rochdale) (Lab)]

Before going into the substance of the regulations, may I ask the Minister to clarify a point of terminology? They refer continuously to “officers”, a term that normally refers to the paid employees—rather than the members—of local authorities. I assume that the word “officers” is all-embracing of elected members and non-elected officials, but I would be grateful if he put on record who will and will not be caught by the regulations.

We do not intend to vote against the regulations, partly because I am looking around the Committee Room and I can count, as the Whips can.

[The Vice-Chamberlain of Her Majesty's Household (Chris Heaton-Harris)]

I can’t.

[Tony Lloyd]

Well, perhaps they can’t.

I understand why the Minister has brought the regulations before the Committee: they have been dictated by a decision of the Office for National Statistics. I must say that the ONS has put the Government in a slightly bizarre position. Frankly, housing associations obtain the bulk of their resources from public sector funds. They trade as well, of course, but they do so on the back of moneys provided by the public sector. It is an accounting rule that dictates that one lump of money applies to central Government funding while another applies to private bodies; it makes no material difference, because the bulk of the borrowing will still be obtained through Government sources. I accept that the Minister is caught by the ONS ruling and that something therefore has to be done. However, we need to seriously consider the impact and what we mean by accountability.

The hon. Member for Rochford and Southend East (James Duddridge) raised ALMOs. I understand his distinction between the housing associations that will and will not be caught by the regulations, but in both cases it is public money that is being used for a wider social good. It should not be for any one group—even tenants—to determine the long-term future of their housing at the potential expense of future generations. There needs to be some recognition of the wider social interest.

The Minister raised consultation. The explanatory memorandum states openly:

“No formal consultation has been carried out for these regulations.”

I put it to him that he should compare that with the actions of the Welsh Government, who carried out quite extensive consultations in Wales—much wider than those done by the Government in England. He said that the general view of those consulted was that they want the Government to get on with the job. That is not exactly the view that the LGA has portrayed to me. It was suspicious and concerned about the lack of public accountability and the potential that arises from the diminution of the local authority roles. We need to look at how we maintain legitimate public interest.

The Minister rightly referred to the human tragedy at Grenfell Tower, where it was quite obvious that the Kensington and Chelsea Tenants Management Organisation’s stewardship simply was not up to the kind of scratch that we would expect from those who deal not only with public money and tenants’ interests but the fundamental issues of quality and safety. Everyone on this Committee and beyond knows that people were very badly let down—those are mild words to describe what took place there.

I do not often quote The Mail on Sunday but I am happy to in this context. In the run up to the cladding of Grenfell Tower, the tenant management organisation employed a fire risk assessor named Carl Stokes at a cost of £250,000. According to the newspaper’s reports, which have been denied, he wrote to the Kensington and Chelsea Tenants Management Organisation that

“You do not have to give a copy of your fire risk assessment to anybody, not even the fire authority, if you do give them a copy this could be used against you at a later date.”

That kind of profligacy of approach by those who make decisions on behalf of tenants cannot be acceptable. It cannot be acceptable to create a closed world of self-serving, self-reinforcing and self-appointing people who take decisions that can have such dramatic consequences for those housed by our housing associations. The issue of what kind of decisions can be made, and transparency, matter.

Again, in the context of Kensington and Chelsea, it is astonishing that three of the leading officers were paid 10% of the total tenants management organisation payroll, yet they were responsible for around 3.7% of the total turnover. That is an astonishing ability of officers to abuse the public body’s resources for their own private interests. If the Government are intent on moving the local authority role, we must have some kind of guarantee of proper stewardship, a properly independent approach and proper transparency to prevent the subversion of public moneys for private advantage of any kind. I could go on at length about other situations where tenants have been let down by the decisions made by the people who manage on their behalf, but I will not.

If we reduce the role of the local authority, the reasons for which I understand, the Minister must examine as part of his consultation on the protection of tenants how to make sure that there is independence, adequacy of scrutiny and transparency of decisions made, so that the public interest test can be certain. The public interest is not associated with individual members of the board; it has to be set at a wider level.

There is no intention to oppose the regulation, but the Minister has to satisfy this Committee and beyond that he recognises that when things go wrong, as in Grenfell Tower, we must make sure that they can never happen again, and that there will be stewardship and the level of scrutiny that can make a material difference.