Housing and Planning Bill

Lord Shipley Excerpts

Monday 18th April 2016 Lords Chamber

[Viscount Younger of Leckie (Con)]

My Lords, I think we are all agreed that it is imperative that housing associations have the freedom to continue to deliver our country’s much-needed homes. Classification back to the private sector provides them with the ability to access private finance to allow them to continue with their development. These amendments support this aim. Amendments 78A and 133B seek to reduce local authority control over housing associations. The amendments have one aim: to enable the removal of housing associations from the public accounts. As noble Lords will know, the Office for National Statistics took the decision to reclassify housing associations as public bodies, meaning that £64 billion was added to the national debt and the housing association sector was classified as public in the national accounts. Local authority control over housing associations was not one of the reasons why the Office for National Statistics reclassified the sector last year. However, we believe that certain governance arrangements may be seen as public sector control and could jeopardise the reclassification of housing associations.

I would briefly like to set the scene. Housing associations build around 40% of new homes each year and provide 2.7 million homes for around 5 million people, including for our most vulnerable households. Building new homes and helping people meet their aspirations for home ownership cannot be achieved without access to private finance. I shall now turn to the details of these amendments.

Amendment 78A relates to the rights of local authorities to nominate housing association board members and act as shareholders. This could allow local authorities, in a minority of housing associations, to block major constitutional changes. Such arrangements are typical in organisations which hold stock that was previously owned by the local authority. Housing associations’ constitutions and the way they are run differ between organisations. Officials in the Department for Communities and Local Government are considering these governance arrangements to assess whether they constitute public sector control. This work is continuing, with the expectation of bringing forward regulations in the autumn. It is for this reason that my noble friend the Minister is seeking secondary powers for the Secretary of State to reduce local authority control over housing associations, where it exists. The final content of these regulations will be informed by the work being undertaken by the Department for Communities and Local Government. Through Amendment 133B, such powers will be subject to the affirmative procedure, so both this House and the other place will have an opportunity to scrutinise the detail of the proposed measures.

These amendments will not impact on the core objectives of housing associations. We are making these changes to ensure that the Office for National Statistics can move housing associations back to the private sector, where they belong. It is vital that housing associations continue to develop much-needed homes and fulfil their social objectives. To do this, access to private finance is essential. If we do not act now by taking this provision, there is a risk that some housing associations will remain on the public balance sheet. I commend these amendments to the House.

[Lord Shipley (LD)]

My Lords, I should repeat my declaration from last week that I am a vice-president of the Local Government Association, because this impacts directly on local government. I welcome Amendment 133B, which confirms that we will have the affirmative procedure so that we can at least talk about the proposals that the Government finally come up with.

I want to be really clear about two things. The first is that the purpose of these amendments is, ultimately, to ensure that we build more social homes for rent than we otherwise would because of the powers of housing associations, particularly in terms of borrowing. Secondly, although local authorities will not have as much control as they do now, nevertheless, there is nothing in the legislation as now proposed that will prevent officers or members of a council joining a housing association board if invited to do so directly in their own capacity. That is my understanding of what is proposed, but I am very keen that the Minister should make it absolutely clear when responding to this group of amendments.

[Lord True (Con)]

My Lords, I very much agree with the points made by the noble Lord, Lord Shipley. Obviously, I welcome what my noble friend said: that there will be a good amount of time given to consider this rather new proposal. I understand the rationale in terms of the audit rules. However, I would like to make three points, one of which the noble Lord, Lord Shipley, has anticipated. It surely cannot be the case that a member of a local authority should be excluded by that from using his or her experience in the service of housing interests—although, clearly, under subsection (1)(b) of the proposed new clause they would not be able to exercise any voting right. Recent legislation dashed local authority members’ hopes when they were told that they were not allowed to have pensions any more because they were not employees of local authorities. In those circumstances, clearly they are not employees of the local authority. Therefore, I do not think that that should be used to exclude them from potential membership where that is judged useful by the housing association.

My second point is on the wording, which, again, is relatively new to all of us, and therefore I have not been able to take advice from my office, which I will when I have time. Subsection (5) of the proposed new clause states that appointing, in relation to an officer,

“includes nominating or otherwise influencing the selection of the officer”.

Local authorities that are responsible for housing individuals, and even those authorities that are not directly housing authorities, have a public responsibility to house effectively. In the course of that experience they will accumulate a great deal of knowledge about the local housing market, the capacity of individuals and, in some respects, the record of individuals. That wording—

“otherwise influencing the selection of the officer”—

could exclude the capacity of the local authority to offer advice on whether a person who has been put forward is an appropriate or effective person to carry out these very important functions.

That relates to my final point: accountability. A great deal in the Bill is about putting housing associations on one pedestal and local authorities and others on another. There has to be some recognition that the housing function is an important one for which local authorities have responsibility. I do not happen to think that putting councillors on boards is necessarily the best way of doing it. Indeed, I agreed to the removal of councillors from the board of our own major housing association. However, as we tease out what these proposals mean, particularly where there is a move from the local authority sector to the housing association sector, I hope we will not lose some thought as to the way in which relationships between housing associations and local authorities are sustained, and in which there is an element of mutual accountability between the two. Clearly, if this goes through, that may not be by appointment, but there must be some consideration of that point, in my submission.

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[Lord Shipley]

My Lords, I shall first speak to Amendment 80ZB, although my name is not attached to it, in the names of the noble Baroness, Lady Lister of Burtersett, and the right reverend Prelate the Bishop of St Albans, as I think this is an extremely important issue. I cannot believe the Government intend that a woman who lost a tenancy as a consequence of domestic violence should not be able to have that renewed as a secure tenancy, and I hope very much that the Minister will be able to put our minds at rest on the matter.

On Amendment 79, to which my name is attached, when the Minister responds to the debate, I hope she will define for us again what the problem is that the Government are trying to solve because, for the life of me, I find it very difficult to understand. For one thing, there is existing legislation in the Localism Act, which we debated in your Lordships’ House only a few years ago, and I am not clear why the provisions in that Act are not sufficient in this case.

For me, this is about community cohesion. It is about enabling those who are in social rented accommodation to stay in their homes and build a sense of community in their area. I worry that, if the Government got their way with the Bill as it is currently worded, we would simply end up with a large number of short-term tenancies. I do not believe that five years is enough. I can understand that a local authority might want the flexibility to have a minimum of two years, but it seems to me that the amendments that we considered in Committee, and that we are now considering on Report, would help us to improve the Government’s recommendations in the Bill. I, for one, would prefer 10 years, with the right of the local authority, which exists anyway in the Bill, to renew a tenancy as a secure tenancy.

This whole proposal shows signs of being rushed. The problem that the Government are seeking to solve is ill-defined, if defined at all; it is all about encouraging more tenants to buy their own homes. That takes us right back to the purpose of the Bill and the 200,000 starter homes. The problem, as we have identified repeatedly in our consideration of the Bill, is that many tenants are not in a position to buy their own home, even with a 20% discount on the cost of a starter home. They will therefore need to rent.

There is nothing worse, surely, for neighbourhoods and communities than to end up with people in uncertainty, worry and stress, and with children in school not quite knowing whether they will have to move a long way away, where they may be unable to continue in the local school that they have come to know. In terms of people living near where they work, travel patterns are established when people have longer-term tenancies.

Longer-term tenancies enable people to have confidence about the area that they live in, and to feel that the house or flat that they live in is actually a home. We should use that word “home” much more than we do. We talk about tenancies, houses and flats and so on, when this is about people’s homes. It is about places where families live, where children are brought up and where people are based who can then secure employment.

This Bill should be an improvement on the Localism Act and the legislation that is already in place. As I understand it, the Government have indicated that they want this amendment on secure tenancies, because not enough tenants have moved into owner-occupation and not enough local authorities have been giving fixed-term tenancies to their tenants. In the end, this should be a matter for local authorities to address. I am very much looking forward to hearing what the noble Lord, Lord Kerslake, referred to—we are going to hear some good news, apparently, about secure tenancies. I very much hope that we do and that it will be satisfactory because, as things stand, this is a very bad proposal.

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[Baroness Evans of Bowes Park]

Yes, I can clarify that. I fear that I will have to find out what has happened on the equality statement and come back to the noble Baroness as soon as possible. I apologise—I know that she has raised it constantly. I fear I do not have any further news for her but I hope that what I have said previously makes up a bit for that.

Amendments 81 and 81A would undo the changes we are making to succession. It would mean that there would continue to be a distinction between the succession rights of tenancies granted before and after 1 April 2012. Family members of tenants granted their tenancy before that date would continue to have an automatic right to succeed to a social home, while family members of tenants granted their tenancy after that date would be entitled to succeed only at the landlord’s discretion. We believe that it does not make sense to retain this distinction simply on the basis of the date the tenancy was granted. That is why we are bringing the succession rights of secure tenancies granted before April 2012 in line with those granted after that date. These amendments would also mean that family members who might have no need for social housing were able to succeed to a lifetime tenancy. Again, we do not believe that this can be right when there are so many in need on council waiting lists, and when all new tenants in future will receive only a fixed-term tenancy.

The provisions will deliver a consistent approach across all council tenancies. They will put common-law partners on an equal footing with married couples and civil partners who will retain their entitlement to succeed to a lifetime tenancy, and will ensure that councils have the flexibility to provide additional succession rights not just to family members but to people such as those who have given up their own home to care for the tenant over a number of years. Where councils decide to grant additional succession rights, if the deceased had a lifetime tenancy, the successor will be given a five-year tenancy. In line with other tenants, there will then be a review at the end of the five years. However, as I also said, if circumstances have not changed, we anticipate the local authority extending the tenancy further.

The changes we are making to the succession rules strike the best balance between protection for tenants and their families, and flexibility for landlords to make the most efficient use of their stock for the whole community. Taken together, these amendments would seriously weaken the ability of local authorities effectively to manage their housing stock. I need to be clear that, should Clauses 113 and 114 and Schedules 7 and 8 not stand part, the other place will be certain to overturn this decision. With this in mind—and, I hope, with the commitment I have given in relation to Amendment 80ZB and the further discussion we will have on the next group of amendments—I ask that the amendment be withdrawn.

[Lord Shipley]

Will the Minister clarify what she said at the beginning of her reply—that local authorities would be enabled to issue 10-year tenancies in certain circumstances? Can she tell the House more about what circumstances will be explained at Third Reading—because the Government’s intention is to come back to this at Third Reading—in relation to adding 10-year tenancies to the Bill? Will the “certain circumstances” also be included in the Bill? In other words, will they be explained in detail at Third Reading, or is it the Government’s intention simply to add them to regulations? Will the affirmative or the negative procedure be used in relation to those regulations? This is an extremely important issue for many of us. The affirmative procedure should be used in respect of regulations. It would also help us to be told what the Government mean by “in certain circumstances”.

[Baroness Evans of Bowes Park]

We will discuss this issue in more detail on the next group of amendments. However, we have shown the direction of travel we intend to take. We intend to have further discussions and to provide more information at Third Reading.