Housing and Planning Bill
Debate between Viscount Younger of Leckie and Baroness Bakewell of Hardington Mandeville
Lord Beecham (Lab)
My Lords, I do not know whether other noble Lords have been watching it, but there has been a very interesting series on television of a Danish drama called “Follow the Money”, which would be an appropriate title for this group of amendments. That series had the benefit of subtitles and, with all due respect to the Minister, I must say that we could all have done with some subtitles, not necessarily on the day but in the form of a briefing note that could have helped us get our heads around this complicated and arcane topic.
I raise one issue with the noble Viscount. I understand, having been so advised by Shelter, that the Bill originally provided that in the event of insolvency of a housing association the first priority would be to maintain social housing in the sector and secure a transfer to another housing association. The amendments collectively before us make that objective secondary to the interests of the creditors. Therefore, the properties might simply be sold off rather than continue to be held within the social housing sector. Will the noble Viscount indicate whether he or the Government take that as an acceptable position? What would the potential impact be in the event of this crisis emerging with any particular association? Why was it necessary to change the original thrust of the Bill’s proposals and downgrade that priority of maintaining the social housing stock in favour of dealing with the needs of the creditors?
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I rise with some trepidation to speak against government Amendment 78P. I heard what the Minister said about hoping that there would be no insolvencies, but the Government appear to be expecting a number of registered providers to become insolvent during this Parliament and for the marketplace to have fewer larger housing providers. That will mean that some of the smaller ones will go to the wall.
On Amendment 78P, the land over which there is a current planning permission belonging to a registered provider that has now become insolvent would be sold on. Presumably, that would be to a developer for it to carry out the extant planning permission. However, the Section 106 planning obligations that the local authority in good faith had attached to the granting of the application, in order to serve both the existing communities around the site and the residents who would move into the proposed dwellings once the site been completed, would be waived. I fear that this is gerrymandering on a large scale and does not serve the communities within the local authority concerned at all well.
Of course, removing the planning obligations means that either the developer gets a bargain or that the housing administrator is able to get a higher price for the land. Either way, the local communities will suffer as no leisure or community facilities will be provided which were the subject of the original planning application. I fear that this is penny-pinching and shabby in the extreme.
Viscount Younger of Leckie
My Lords, I hope that I can provide some reassurance arising from a couple of questions on this short debate, particularly for the noble Lord, Lord Beecham, and the noble Baroness, Lady Bakewell. I will try to encapsulate both questions in the same way because the best way that we can protect social homes is by making sure that the sector is financially strong. That is the basis of what we are aiming to do. To do that, as I said earlier, we need lenders to have confidence in the sector. We have therefore made it clear that, if absolutely necessary, social housing stock can be sold out of the sector by an administrator. This has only ever happened once and is just a matter of last resort. Therefore, the objective to service creditors takes precedence over the objective to keep social homes in the regulated sector.
The amendment responds to creditors’ concern that the original drafting risks affecting loan security valuations, potentially increasing the cost of debts. This is technical rather than anything more broadly based. The key point is that we need to maintain lender confidence in the sector. I hope that that gives reassurance.