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Housing and Regeneration Bill

moved Amendment No. 107A: 107A: Clause 117, page 50, line 5, at end insert— ““(6A) Principles do not have effect until approved by the Secretary of State.”” The noble Baroness said: These amendments in my name deal, by and large, with fees. In his report, Martin Cave proposed that the regulator raises money to cover its running costs from regulated bodies. The Government agreed that it was fair that the regulated bodies should meet this cost, as they do in other industries, rather than through continued public subsidy. Clause 117 gives the regulator the power to set fees for registration of social housing providers. The regulator may make initial registration conditional on payment of a fee. The regulator may also make continued registration of registered providers conditional upon payment of annual fees, which, in practice, means that providers will have to pay a fee every year. We envisage that the regulator’s activities will be funded almost entirely by the registration fees to be charged to applicants to register, rather than grants from the Secretary of State. That will make the new body much more independent from government. In addition, by passing those costs on to the regulated bodies, we will ensure that they keep up pressure on the regulator to drive down costs. In time, we expect the regulator to improve efficiency and to lower the cost of the regulatory regime, much as other utility regulators have been able to achieve. It is important to stress that we do not expect the costs to registered providers to be too great. The regulator’s cost should be relatively small at about £20 million per year, which reflects the regulation side of the Housing Corporation costs. If that was divided evenly between registered providers on the basis of numbers of homes, it would amount to about £10 per social home per year. We think that offers good value for money. The regulator has to prepare and publish the principles under which fees must be set, and consult persons it considers representative of the interests of fee payers. This is set out in subsection (5). Those checks and balances should ensure that fees are modest and fair. I understand, however, that some stakeholders are still concerned. We are therefore proposing an amendment to require the regulator to seek the Secretary of State’s consent to the principles on which fees are set. That will replace the requirement in the Bill for the Regulator to consult the Secretary of State on these principles. I hope this change will provide further assurance that the regulator’s powers to set fees could not be used to generate excessive income, but only to reflect the reasonable costs of regulation. I beg to move.