Deregulation Bill

Lord Best Excerpts

Wednesday 11th February 2015 Lords Chamber

[Baroness Noakes (Con)]

My Lords, I support the amendment to the amendment, moved by my noble friend Lord Howard. In principle, preventing retaliatory evictions is a very good idea for all the reasons that have been given by my noble friend and the noble Baroness. I want to focus on two aspects, one of which my noble friend raised in one of his amendments; that is, the 14-day limit provided for under subsection (2)(b)(i) of the new clause proposed under Amendment 46A. I query with my noble friend the Minister whether 14 days is a reasonable timeframe. I declare an extremely modest interest as a landlord of one property.

I just cast my mind to what might happen. I often go on holiday for more than 14 days. If, God forbid, one were ever in a dispute with a tenant—I have no current expectation that I would be in that position—it would be quite easy for a tenant seeking to make use of these provisions generally to cause trouble and to take advantage of one’s being out of the country and not being available for 14 days. As my noble friend’s amendment suggests, 28 days seems more reasonable on that basis.

The second thing I want to raise with the Minister is what would be an “adequate response”, as provided by subsection (2)(b)(ii) in the amendment, which is defined in subsection (3). I ask my noble friend the Minister: how will the adequacy of the response be judged? What is a “reasonable timescale” and who will judge what that is? I could not see in the amendments how any disputes about this process were capable of being dealt with. There needs to be certainty about how the processes will work. It is not entirely clear to me that a response can be quickly identified as being adequate or not, given the wording in subsection (3) of the amendment.

[Lord Best (CB)]

My Lords, I support this group of government amendments. I declare my interests as on the register, in particular as chair of the council of the Property Ombudsman, which handles complaints about property agents—traditionally about estate agents but today more about letting and managing agents in the private sector. I am grateful to Shelter and the British Property Federation for helpful briefings.

I want to address the concerns raised by some representatives of private landlords that this effort to end retaliatory evictions in private rented housing could become a charter for mischievous tenants to prolong their tenancies when they know that the landlord wants them to leave. I want to answer the question: could tenants raise spurious complaints about their property unnecessarily, unfairly or even maliciously, in order to frustrate their landlord and to secure an extra six months or so of occupation? If that was the outcome from that measure, it is argued that it would deter investment, put off potential buy-to-let landlords and slow the growth of this sector.

The private rented sector has more than doubled in size over recent years and we now have some 1.5 million private landlords. Properties that in times past would have been sold to home buyers have instead been snapped up by buy-to-let landlords. Some observers would welcome a slow-down in this shift from owner-occupation to private renting. However, outlawing retaliatory evictions seems very unlikely to put a break on this phenomenal growth. Only the minority of really hopeless—or actually criminal—landlords will be affected.

These measures will bite only where the landlord has not only ignored a request from the tenant for rectification of a serious problem but has also ignored the local authority when it has spelt out that the landlord is in breach of their legal duties. Local authorities will have to visit the property and be satisfied that there is a serious breach of the requirements and that the property is not safe and not free from grave health hazards. The council will then have to issue a formal improvement notice, not a simple hazard awareness notice. That is not an action that is taken lightly by local authorities and they will do so only if the landlord has failed to do anything to rectify the problem. Only after the whole process has been concluded and the landlord has done nothing will the tenant gain an extension to the tenancy. These are pretty extreme circumstances and it would take a truly obdurate or completely incompetent landlord to fail to do what is required by the council.

Nor can the Bill be used as a last-minute delay to hold up an eviction. If the tenant is challenging an eviction notice, they will have to prove that they made the complaint about conditions before the eviction notice was issued. The tenant will lose the ability to challenge the eviction notice if they do not do so within the two-month notice period, and the Bill specifically prohibits renters from raising any issues that are their own responsibility. Environmental health officers are well trained in assessing whether a defect has been exaggerated or manufactured by the tenant. Prior to serving formal notice, the landlord will be given time to address the problem, and proper law-abiding landlords will act before matters reach the stage of the local authority serving the improvement notice which would delay the eviction.

This measure can catch out the shameless landlord of a slum property seeking to remove a tenant who complains in order to find someone else who is prepared to tolerate extremely poor conditions, but it does not provide any help to the tenant who tries to use this as an opportunity to fend off a perfectly valid eviction notice. I think that it is a modest change in the law and there should be no anxieties that unscrupulous tenants can use it to make mischief. There may be some tweaks to be made to the small print which would improve the amendment, and I would not stand in the way of modest changes, but the core components of the measure represent a positive step forward. In combination with the other important new requirements in this set of amendments to enforce proper standards, this measure will support the process of driving out criminal landlords.

Regrettably, among the hundreds of thousands of new landlords in recent years, there are indeed some who lack not only competence but the financial resources to keep their properties in a decent condition, let alone to engage professional agents to manage the lettings for them. Frankly, these landlords are not up to the job, and if this measure flushes out even a handful of them, it will have been worth while. For the great majority of proper landlords these changes are good news because they target unfair competitors who undermine the reputation and the public’s perception of this very necessary sector. I strongly support this group of government amendments.

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Moved by

[Lord Best]

46K: Clause 31, page 28, leave out lines 1 to 3

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[Lord Best]

My Lords, I apologise for speaking to two consecutive amendments—your Lordships will be tired of the sound of my voice. Amendment 46K endeavours to ensure that standards of accessibility in new homes—where there has been important progress in recent years—do not now go into decline. The amendment would remove from the Bill a new power for the Secretary of State to set additional conditions before a local authority can start or continue to require housebuilders to build homes to disabled-friendly lifetime homes standards. By the removal of Clause 31(4), the threat of central government dictating lower standards than councils want, and some currently require, is removed.

The amendment comes with support from many organisations, including Age UK, the Royal Mencap Society and the Town and Country Planning Association among others. I declare my interest as president of the Local Government Association, and this body is also supportive of the approach taken by this amendment. In moving the amendment, I thank the noble Lord, Lord Wallace of Saltaire, for arranging a helpful meeting for me, the Leonard Cheshire Disability charity and experts from within the relevant departments and outside. Following that session, my amendment is intended to enable the Minister to place on record assurances that will clear up some misunderstandings and remove some doubts and misgivings about the legislation.

While everyone knows it is imperative that the quantity of new homes be increased to address acute national shortages that are wreaking havoc for almost all households under the age of 40, we must also be mindful of the quality of these homes. The UK is currently building the smallest flats and houses of any EU country—and, of course, in comparison with the USA, Canada, Australia and so on. Much of this new housing in the UK is storing up problems for the future. So often, the accommodation has no space for a family to sit down to a meal together, and a spare room is becoming a thing of the past. More far-reaching is the problem that new homes are not designed for an ageing society or accessible to those with a mobility problem, let alone a wheelchair user. Yet by spending only a little more on each new home we build from now on and achieving the so-called lifetime homes standards, our housing stock would gradually become suitable for us all in our older age, as well as for the young parent with a baby in a pushchair—and for any of us who become temporarily or permanently disabled, from the teenager who breaks a leg to the soldier returning home with a serious injury.

Clause 31 contains the power to remove the freedom for local planning authorities to impose obligations on housebuilders to achieve standards relating to space, security, energy, sustainability and accessibility. Instead of local discretion, standards are to be set centrally. This would have the positive effect of saving time and money for building firms that operate over several areas. The arrangements will also have the advantage for consumers that the new standardised standards covering accessibility, when determined by government, would then be enforced through building regulations by building inspectors. This would prove a more reliable mechanism than just a planning requirement for making sure that the standards are actually met.

The concern is that instead of promoting an optional higher level of accessibility which so many organisations, including Leonard Cheshire Disability and Habinteg Housing Association, as key campaigners, believe should be applied universally, the new centralised system will stop councils insisting on these lifetime homes standards. The fear is that instead of accelerating the healthy trend towards these higher standards, central government pressure will prevent councils going for the optional category 2, which would undermine those already requiring these standards. I hope the Minister will waylay those fears, which revolve around two key hurdles for planning authorities: first, to prove that there is a need for accessible homes; and secondly, to show that the extra cost of £500 to £1,400 per home does not undermine the viability of a development—that is, it will allow the housebuilder a profit of at least 20%. Moreover, when I moved this amendment in Committee, noble Lords raised the problem of local authorities being able to require the new optional higher standard only when they adopted a new or revised strategic local plan, a process which can take years.

I therefore ask for answers to the following questions. First, I know that the DCLG intends to provide guidance on good practice to local authorities, but can the Minister confirm that this is intended to raise the aspiration for all new homes to be built to accessible standards in the years ahead?

Secondly, and more narrowly, will the new test of need for accessible housing in each area be satisfied by the statistics which, throughout the UK, demonstrate that the ageing population is a universal fact and disability is ubiquitous? Bearing in mind that London has the lowest proportion of older people of any English region but that the GLA aims for all new homes to achieve the lifetime homes standards, is it logical to argue that other areas of the country could fail the needs test in this regard?

Thirdly, how will the viability test be satisfied? Ultimately, viability relates to the price paid by the developer for the land. Higher standards, if required by the planners, will simply lead to the landowner getting a little less. When, if ever, could the modest extra costs of achieving optional higher standards—calculated by consultants for the DCLG to be no more than £1,400 per home, and usually much less—prevent accessible, disabled-friendly standards being met?

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The amendment moved by the noble Lord, Lord Best, has given the Government an opportunity to lay out and, I hope, clarify the concerns and the issues he has raised. I hope I have provided reassurance that the system is robust and a positive move forward. Based on those reassurances, I hope that the noble Lord will withdraw his amendment.

[Lord Best]

My Lords, I am very grateful to all noble Lords who have spoken, beginning with the noble Baroness, Lady Wilkins. Everyone has welcomed the noble Baroness back into the Chamber and it is great to see her back again. She has brought personal testimony of the value and importance of accessible housing for all, which is part of a campaign she has been running for at least 10 years, for which I am deeply grateful.

I greatly appreciated the support of noble Lords from all around the House including the noble Lords, Lord Shipley and Lord McKenzie of Luton, and the noble Baroness, Lady Gardner of Parkes. The noble Lord, Lord McKenzie of Luton, made the fundamental point that spending a little bit upfront is recouped later on. It is such an essential point to make because that little investment can be paid back in spades later when people do not have to go into residential care and can return from hospital. Our A&E crisis can recede because people can get home safely and it will be satisfactory when they get there. I am very grateful to noble Lords for all their support.

I am also grateful to the Minister for putting on the record a number of points that we have corresponded about. It is clear that this will be a reserve power, a fallback power. That is good news. There was even a hint that it might never be used, which was helpful. If it is to be brought forward, there will be full consultation. That is good. Local authorities will receive firm guidance from government about the way in which evidence is going to be collected by them. Advice on that will be helpful, particularly in relation to the so-called needs test. I was not absolutely sure where we stand in relation to the overlap between the requirements for accessibility that local authorities want to lay down and their local strategic plans and the neighbourhood plans that the community brings together. I think we are still in the process of negotiating on those points, and I hope to be part of those negotiations.

Finally, the Minister confirmed that further research will take place on the impact of these new measures, and I hope that they will prove to be satisfactory and will show an expansion, not a contraction, in the number of new accessible homes that will be built in future. On that basis, I beg leave to withdraw the amendment.

Amendment 46K withdrawn.

Deregulation Bill

Lord Best Excerpts

Thursday 30th October 2014 Grand Committee

[Lord McKenzie of Luton (Lab)]

My Lords, this is a modest amendment that requires a report to each House of Parliament to set out the effects of the policy of reducing the qualifying period for eligibility for the right to buy from five to three years. In particular, it seeks information on the impact of this reduction on the numbers of affordable council houses that have replaced those sold. While this amendment focuses on replacement on a like-for-like basis, I acknowledge that the Government’s commitment relates to a one-for-one replacement.

As I made clear at Second Reading, we believe that people should have the right to own a home, and have come to support the right-to-buy programme as one mechanism to facilitate this. We are considering these issues when home ownership has declined to its lowest level in 30 years, and when we have a housing crisis in the UK because for decades we have failed to build sufficient homes to meet demand. The consequences of this are now being widely felt by millions of working people who are unable to afford the house that they want, and their children and grandchildren face the prospect of never being able to do so.

As Michael Lyons stressed in his latest report, building more homes is not just about home ownership. There is a need to provide homes for social and affordable rent so that those on the lowest incomes can have a decent home, too. His report specifically identified that local authorities should have a key role in commissioning and building social housing, and acknowledged the continuing commitment of housing associations to this end. Of course, the sale of a council house does not of itself add to or diminish the stock of housing in the UK, but how the proceeds of sale are applied and the extent to which that adds to the housing stock are of crucial importance. These things need to be considered in the near and longer term. Evidence provided to the Lyons commission suggested that about one-third of the properties sold under the right to buy are now privately rented, many at rent levels above applicable housing benefit levels.

In seeking this report, we are looking to hold the Government to account for the commitment made when their reinvigorated right-to-buy programme was introduced. The Solicitor-General in the other place,

“guaranteed, for the first time ever, that receipts from additional local authority sales—that is, sales above the level forecast prior to the change—would be used to help to fund new homes for affordable rent, on a one-for-one basis”.—[Official Report, Commons, Deregulation Bill Committee, 6/3/14; col. 276.]

This commitment applies to the reinvigorated programme generally, not just to changes in this clause, and requires some decoding. It is accepted that it is one-for-one, not like-for-like, and it would appear—perhaps the Minister can confirm this—that it is based on the Government’s analysis at national level that, should it have the relevant proceeds, and with the application of those receipts limited always to 30% of the cost of new provision, a one-for-one test could nationally be satisfied. Can the Minister throw any light on the distributional aspects of this approach and the extent to which the allowance works only because of a mismatch between locations where proceeds arise and where they can be reinvested? What assumptions have the Government made about the type of properties sold and those replaced? Because the right-to-buy proceeds could be applied to only 30% of the cost of replacement provision, local authorities will be expected to borrow the balance and fund from affordable rents. They have to sign agreements with the Government to this effect, so how many councils have entered into such agreements with the Government or the HCA? How many have not? Are the Government aware of any councils that would be precluded from undertaking such an agreement because of their borrowing cap? What is the Government’s definition of affordable rents for this purpose? Has any estimate been made of the additional housing benefit or universal credit cost that will arise from the requirement to charge such rents to benefit from the replacement arrangements?

One of the difficulties in all this is how to be clear about the baseline—the forecast level of sales prior to the reinvigorated programme. Is it correct that the baseline is set in terms of revenues garnered, not units sold, so that the Treasury always gets its money first? Will the Minister provide an analysis, year by year, of the baseline so that there can be some clarity as to the additionality that should provide the Government’s one-for-one commitment? It is understood that the Government’s guarantee does not extend to tenants accessing the preserved right to buy for those council homes that transferred into housing association ownership. The National Housing Federation briefing asserts that because housing associations entered into agreements about the split of proceeds of sale before the reinvigorated programme, they receive only a small proportion of the sale proceeds, with the lion’s share going to local authorities and not always used for housing. It says that 92% of housing associations that it surveyed declared that they would not be able to replace homes sold via the preserved right to buy. What plan do the Government have to facilitate replacement of homes sold by housing associations in that manner?

The National Housing Federation has given us figures for 2012-13, stating that 5,944 local authority homes were sold but that only 3,634 new homes had been started to replace them. For that and the subsequent year, how many homes have been sold and what are the related proceeds? How many of those have been treated as attributable to the reinvigorated process, and therefore how much is available for replacement homes?

Three other amendments focused on resources for social housing are grouped with this one, and I shall outline our position on them when they have been spoken to.

This is an important issue. Given the Government’s change in policy we need at least in these circumstances to review what is happening, hence the requirement for a report. I beg to move.

[Lord Best (CB)]

My Lords, I propose a cluster of three new clauses in the group, all concerned with the desperate problem of this country’s acute shortage of homes that are affordable to those on average incomes and below. Amendment 40 relates to right-to-buy discounts and seeks not to undermine these arrangements but to make them more productive. Amendment 41 seeks to apply more of the receipts from right-to-buy sales to the provision of new homes. Amendment 42 attempts to enable councils to borrow prudentially more funds to increase housing supply.

These proposed new clauses do not represent earth-shattering proposals that will solve the nation’s acute housing problems. Other more dramatic changes are needed to achieve really significant results, but this trio of amendments would enable councils to play a bigger role once again in meeting this country’s crying need for more and more affordable new homes.

I declare my interest as president of the Local Government Association. I am grateful to the LGA for preparing these amendments and, as always, for valuable briefings.

Clause 29 endeavours to make the right to buy more attractive by reducing the time from five to three years that a tenant has to live in a council property before being able to buy at a big discount. Discounts can be as much as 70% of value, so tenants can buy a home for 30% of what it is worth, subject to maximum discounts of an index-linked £100,000, now £102,700, in London and £75,000, now £77,000, elsewhere. These nationally set figures are very much back-of-the-envelope stuff. They do not recognise that the housing market outside London is not uniform. Levels of demand and house prices in Bradford and Burnley are not as the same as in Bedford or Brighton. Indeed, house prices are not even the same across London.

Amendment 40 would mean councils setting their own discount levels, based on local markets. It would place a maximum 60% on discounts. It would avoid giving away publicly owned assets on extravagant terms. It localises decision-making, in keeping with the Government’s general disposition towards the devolution of responsibility to local government.

Critics of the amendment could worry that some local authorities, which believe that the right to buy has already removed too many properties from their stock of affordable homes, will reduce discounts to the point where no one wants to buy. Some councils will certainly point out that a large proportion of RTB sales lead to the first buyer selling on to buy-to-let landlords. Sadly, this can mean the same previously rented home being re-let at twice the earlier rent, often increasing the housing benefit. Worse, the private tenants may be people requiring intensive housing management and support, which is not available from the private landlord. In extreme cases, I hear of families evicted by the council for anti-social behaviour returning to the estate, into former right-to-buy properties, costing the taxpayer twice as much, but without the restraints on behaviour that could be exerted for council tenants.

There are also the problems for the purchasers themselves. Those buying flats can discover a few years down the line that they must pay large sums towards major repairs and replacements of lifts, external cladding, roofs and so on, turning their asset into a liability.

Amendment 40 puts these arguments to one side and avoids the accusation that it could be used to undermine right-to-buy sales. It would require discounts to continue at levels that will still attract buyers. It would stop local authorities being forced to spend more than is necessary to encourage sales, and would prevent unwise tenants being tempted by the sheer scale of the discount from making an unwise purchase. It would substitute localised decision-making on an issue that requires local knowledge, for the distant regulation of RTB discounts by Whitehall.

Amendment 41 follows from that. It would seek to capture 100% of the sale proceeds—admittedly after they have been greatly depleted by the discount—to be recycled for local housing purposes. The importance of this measure is not hard to see. At present, the Treasury takes a 25% slice of proceeds from right-to-buy sales. Last year, from a total £877 million, the Treasury took £237 million. If that extra money had been recycled into the housing revenue account and used for new homes, it would have made a very helpful difference at the local level. Councils which have done the sums have estimated that they could have improved their housebuilding performance by some 30%.

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Moved by

[Lord Best]

36: Clause 32, page 28, leave out lines 15 to 17

[Lord Best]

My Lords, the amendment amends Clause 32, relating to building requirements imposed through building regulations and planning conditions. This is all about quality for the new homes that we build and included in this are standards required from housebuilders for homes to be accessible and easy to enter and move around inside, not least for a parent with a baby in a buggy or the teenager temporarily on crutches after a football accident, but particularly for those who have a disability or, as we do as we all get older, a mobility problem.

I congratulate the Department for Communities and Local Government on its extensive housing standards review, which has been going for more than two years and will finally be concluded early next year. This has already reached a point at which we can see some excellent progress in raising and rationalising housing standards. I pay tribute to Simon Brown at the DCLG and the key architect on the review team, Julia Park, from Levitt Bernstein architects. I welcome the work being done and am sure that it will push up standards in some key respects and save a lot of money. The outcome will be better standards because more of the requirements will move from being planning conditions, which are hard to enforce, to being within building regulations, whereby building inspectors will see that they are actually achieved. There will be substantial savings for those housing associations and housebuilders creating the homes that we so desperately need because the plethora of current requirements from different public bodies will be compressed into a simpler and clearer set of standards covering all tenures equally. Bearing in mind that we have been building the smallest homes in Europe—we are simply miles behind Scandinavia, Germany, the Netherlands and France—getting to grip on space standards, for example, is a real step forward.

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[Lord Best]

My Lords, I am very grateful to all who participated in that excellent exchange. I am grateful to the noble Lord, Lord Tope, for his support. He reminded me in passing that I did not mention the good work of Habinteg Housing Association, which has been working on these things very successfully over the years.

The noble and gallant Lord, Lord Stirrup, raised the fundamental point, and underlined it, which is that to allow local authorities to insist on this higher level but absolutely universal higher standard of lifetime homes across the piece requires this rigorous test to be fulfilled, which brings with it potentially more red tape. This is the essence of the problem—passing a test of viability and need, while of course acknowledging that around the country circumstances are different. But we all get older, all around the country. There are families everywhere with a mother in a buggy going up those steps. The essence of the lifetime homes philosophy is that we need to build all our new homes to a standard that is good for everyone for their lifetime, and it is very hard to see what the rigorous test is going to be that one area might merit being able to insist on those standards and another area might not. The noble and gallant Lord, Lord Stirrup, gets to the essence of that problem. I am grateful to the noble Baroness, Lady Andrews, who emphasised concerns about older people and points out that this is going to be a bit of a postcode lottery as to whether the optional higher level is plumped for by the local authority concerned and whether it is able to sustain that if people go to appeal.

The noble Lord, Lord Lexden, raised the question about there being quite a lot of homes specifically adapted for wheelchair use. It is just that sometimes the people who need them are not living there but somewhere else. Of course, that creates the problem of how you get people to swap homes so that everybody is in the right place, but that point relates specifically to wheelchair-user homes rather than the broader standards that would apply, it is hoped eventually, to everybody—the universal move to level 2.

The noble Lord, Lord Rooker, raised the question of the local plan. There is a potential hiccup there that we have not got to the bottom of. If there is one thing that we are going to have to talk more about in the consultation period, it will be how we fit this within local plans without that leading to endless delay. It was important that the Minister made clear that we will be able to be passported, if we are a local authority that currently requires higher standards; that will carry on uninterrupted into the future.

I am grateful to the noble Lord, Lord McKenzie, for his support. I hope that he will be part of further consultation as we move towards the guidance, not regulations, that will put these standards into effect. The Minister’s remarks were reassuring but still have some rather vague edges to them. There are opportunities and wriggle room for developers to say that it is not possible to go to these higher standards in this area because, perhaps, we have paid too much for the land and the cost of £500 or so involved would mean that we will not make the profits we would have made. If such excuses are tolerated, we will lose the battle. We need to be firm on these matters and I hope that the guidance will be firm when it comes out. There is some reassurance—for which, thanks—but there is more work to be done. I beg leave to withdraw the amendment.

Amendment 36 withdrawn.

Charity Commission

Lord Best Excerpts

Thursday 27th February 2014 Grand Committee

[Lord Best (CB)]

My Lords, the question I am posing and attempting to answer in this debate is, “Are there lessons for the Charity Commission from the parallel activities for the regulation of non-profit housing associations, most of which are charities?”. The Homes and Communities Agency regulates so-called registered providers and nearly three-quarters of these are “exempt charities”, operating outside the Charity Commission’s regulatory powers

Two aspects of the arrangements for the voluntary housing sector seem worth considering for the wider charity sector. First, would it help to copy the model of having an ombudsman to resolve complaints from service users? Ombudsman services cover many industries—financial services, telecoms, electricity and water companies, and legal services—as well, of course, as most public services. However, only a minority of charities, like the charitable housing associations, are covered, because they come under a specialist ombudsman service. Just as the Housing Ombudsman takes a load off the shoulders of the HCA, I suggest that a charities ombudsman could relieve pressure on the Charity Commission by sorting out the everyday service disputes that can prove so arduous and time-consuming.

I declare my interest, at one remove, as chair of the council of the Property Ombudsman, which deals with private sector estate agents and managing and letting agents. This experience has led me to the view that ombudsman services—independent redress schemes, free to the consumer and service user—can be very valuable. An ombudsman has teeth in being able to make awards—usually financial compensation—when a complaint is upheld, in being able to publicise bad behaviour and, where appropriate, in passing on its findings to the regulator, in this case to the Charity Commission. Let us have a charities ombudsman.

My second proposition relates to the concept of co-regulation, which, I feel, the Homes and Communities Agency is taking to a more refined level than the Charity Commission. The co-regulation approach brings together the regulator and the regulated. It encourages the organisation that encounters a problem, which may be governance-related, to take it to its regulator as early as possible and to discuss a mutually acceptable way forward. In place of hoping that the regulator will never find out about the problematic issue, the board—the trustees—shares the burden and gets the advice of the regulator.

This is not a mechanism for discovering criminal intent or gross misconduct but, for those cases where things have gone wrong and the trustees are well intended, co-regulation can sort out difficulties in an atmosphere of mutual trust, not defensiveness and hostility. It requires the regulator to assist the organisation to take steps to put things right and to keep in close contact. This contrasts with the regulator standing back and not coming down from on high in a heavy-handed manner. Direct intervention need happen only in extreme cases. I believe that the Charity Commission is heading in this direction and, from experience of seeing how co-regulation can work, I commend an acceleration of that process. If the way for the Charity Commission to increase its effectiveness is by taking forward the two suggestions I am making here, perhaps by raising some part of the funding from an annual levy on the charities themselves, that might be a price worth paying for a better service for charity service users and for the charities themselves.

Charities

Lord Best Excerpts

Wednesday 12th December 2012 Lords Chamber

[Lord Wallace of Saltaire]

My Lords, the noble Lord, Lord Hodgson, dealt with chugging in his review of the Charities Act. We wish to encourage a broader base for giving among small donors. Chugging has been with us for some time. It is not a new phenomenon.

[Lord Best]

My Lords, in terms of the giving of time through volunteering, as well as the giving of money, it is good news that the Government are supporting more volunteering for sports as part of the legacy from those wonderful games makers at the Olympics. Will that same support for volunteering be extended beyond just sporting activity to other kinds of volunteering, such as the work that the WRVS is currently doing in sending volunteers in to help people who are living alone and suffering from loneliness?

[Lord Wallace of Saltaire]

My Lords, the Government’s join in scheme is very much intended to take on the spirit of the Olympics and extend it to a whole range of other activities. I visited a National Citizen Service course this summer. I had been relatively sceptical about National Citizen Service until then, but I was completely bowled over by the young people who were taking the course who were learning how to go out, raise money, help people and develop schemes. I would like to see many more people have the opportunity to learn how they can contribute more actively to society. It was a bunch of people from one of the poorer areas of Bradford, and it was delightful to see that they were learning to give their time and were managing to raise money.

Public Services

Lord Best Excerpts

Wednesday 12th December 2012 Lords Chamber

[Lord Best]

My Lords, I, too, thank the noble Lord, Lord Boateng, for initiating this excellent debate.

I want to use my few minutes to make a practical point about the engagement of smaller charities and community-based organisations which currently find it very hard to win contracts to provide local services. Local authorities and health trusts, as well as central government, are often reluctant to entrust public money to these smaller bodies because they are unlikely to have capital to invest or assets to borrow against and they are inherently insecure financially, so there is a risk to public funds should they fail. Thus, despite the emphasis on localism and the fact that smaller bodies may well have the all-important trust of local communities, knowledge of neighbourhood issues, access to volunteers and real commitment at the grass-roots level, they lose out to major, national, often profit-making, organisations.

Sometimes the small charity or the community-based social enterprise finds itself used as “bid candy” to help the major players—the prime contractors—win contracts for public services, but then sees very little of the action thereafter. My proposal is that these smaller local bodies team up with the major housing associations operating in their area. Today’s housing associations are an enormously significant part of the voluntary sector. They are non-profit social businesses embedded in specific places with a full range of managerial skills that can provide the financial security and longevity which service funders desire. Together, the housing associations hold assets worth, at the last estimate, more than £109 billion. I declare my interest as chair of the Hanover Housing Association.

There is a large and growing number of examples of how this partnership between a quite small community-based organisation and a well resourced housing association can deliver a local service with an implicit guarantee against bankruptcy or failure because of the strength of the housing association’s balance sheet. A report out last week from the think tank ResPublica demonstrates how lots of housing associations are now delivering on the localism agenda by acting as vehicles, enablers, capacity builders and brokers for community activities of many kinds. I have time to give only one example. I visited a brilliant project in September supported by Aspire Housing, a housing association with homes in north Staffordshire and south Cheshire. The association has teamed up with a number of local social enterprises, of which this project was one, to provide employment and training for well over 1,000 young people each year by successfully organising apprenticeships and the skills that get them into work.

I accept that my proposal for more of these partnerships to enable the voluntary sector to deliver more and better public services could be undermined by welfare reform changes that impoverish housing association tenants and thereby jeopardise the finances of the housing associations, but that is a story for another day. Tonight, I would greatly welcome hearing the Minister’s response to this way of squaring the circle and enabling funders to work with a financially secure, well grounded, safe social business in the form of a strong housing association in partnership with really local voluntary sector, non-profit, charitable and social enterprises.