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Housing and Regeneration Bill

The noble Baroness has drawn attention to a complex issue. I shall not be able to give her satisfaction but I hope I can explain what I see as the real difficulties in trying to solve this. The amendment specifies that the regulator can give compensation not only to current tenants of social housing but to applicants who have applied for housing. The noble Baroness knows from her long experience how complex the allocation system is. Local authority allocations are governed by Part VI of the Housing Act 1996 and registered social landlords’ allocations are subject to Housing Corporation regulatory guidance, which can cover how they allocate their own stock and how they co-operate with local authorities. It is usual for RSLs to accept 50 per cent or more local authority nominations on the empty units in their own stock. Most allocations are, therefore, for the local authority. That process falls under the statutory homelessness duties, which are always for the local authority. So we already have a complex, interrelated system. Under the Bill, compensation can be given only where there is a breach of standards or a breach of a voluntary undertaking by a provider to resolve a breach of standards in its own way. Standards in the list at Clause 191 can be set on the allocation of social homes by providers. Therefore, it is perfectly possible for the regulator to set and enforce standards on allocations, including in areas such as how the provider should co-operate with the local authority. Given that that is possible, it may address some of the underlying problems that the noble Baroness has raised in the amendment. When setting and enforcing standards under Clause 191(3), the regulator must consider the desirability of the provider being free to run his own business, which echoes a recurring theme in our debates in Committee. It will need to be careful that its standards do not prohibit charities making arrangements to house specific groups in order to meet their objects. That is one reason why the regulator must consult the Charities Commission because we would not want to inhibit that. However, when setting allocation standards, the regulator also needs to consider objective 2 to ensure that actual or potential tenants have an appropriate degree of choice and protection, and so the potential tenant is brought into the frame. I agree that it is the role of the regulator to be able to address general or systemic allocation problems but I do not think that a compensation power is the best way to deal with them. Better results will be achieved through enforcement notices, penalties or, frankly, by changing a manager. I am concerned that the regulator might spend valuable time judging individual cases for compensating people who feel that they should have been, but have not been, offered a home. The notion of the potential applicant is also very wide. There are so many potential applicants for social housing that we run the risk of imposing a major burden on the regulator of having to judge individual cases, and the existence of the power would in itself generate pressure to award compensation to potential tenants who had lost out. I can see that resolving individual cases could become a heavy burden. I have other practical concerns. As I said, responsibility will normally lie with the local housing authority, not the housing association or other provider. The regulator is not responsible for regulating the allocation functions of local authorities. Indeed, it seems rather unfair on housing associations and other providers if the only potential tenants who can get compensation are those who are rejected by an association. That brings us back to the level playing field argument. I am also, quite reasonably, concerned about public resources. What should a potential tenant who has been denied a home for an indefinite period be paid? It is not as easy as working out the compensation due, for example, for a leaky roof. We could get into an extremely expensive frame of reference because social housing is such a valuable prize that the sums might be so large that the regulator would often not be able to make awards, because under Clause 240 by doing so he would jeopardise the viability of the provider or prevent it providing services to its existing tenants. I think that the noble Baroness will accept that these are issues that the regulator can and should deal with where a registered provider is at fault, but through means other than compensation awards. However, she has identified a complex situation and so, in order to make clear to noble Lords how the allocation system works at present, I should like to write and explain the background to the sort of judgments that go into the making of allocations and the relationship between local authorities and providers. On that basis, there will be a better understanding of how complicated this challenge to the providers would be.