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Housing and Regeneration Bill

moved Amendment No. 110ABA: 110ABA: Clause 248, page 100, line 30, leave out paragraph (a) The noble Lord said: I shall speak to the amendments standing in my name in this group. They are intended to apply some gentle constraints on the powers of the regulator. The Bill already extends the regulator’s powers beyond those that the Housing Corporation currently holds. An inquiry may be called by the regulator at the behest of the residents, if the amendment of the noble Lord, Lord Whitty, supports that line, at the request of the local authority or on the regulator’s own initiative. If mismanagement is uncovered by that inquiry, the regulator can direct that the management of the provider’s homes be transferred to another manager, or he can directly appoint other managers or new staff—in effect, he can take control. This is pretty heavy-duty stuff. It would mean that most providers of social housing would be out of business because they would not be managing the homes that they had built or acquired. However, they would have to continue to pay the mortgages on those properties and they would have legal obligations in relation to the premises as the owners of those properties, although they would not be allowed to manage them. Therefore, this is a heavy-duty power and I support this extension to the powers that currently exist for a regulator to intervene in the affairs of providers of social housing. Indeed, I would go further and extend the powers to include profit-making providers who take grants and therefore should accept all the obligations towards tenants and the properties they manage that go with accepting government funds. I think that the noble Baroness agrees with the extension of a number of these provisions to profit-making bodies, and I look forward to hearing her comments in due course. So far, so good. But the Bill spoils it all by overextending these powerful new measures. It goes further than giving the regulator the power to remove the management or to appoint new staff in cases where mismanagement is unearthed. The powers in the Bill can be applied if the registered provider has breached any one of the standards—and a good many standards could be devised by the regulator—that cover every conceivable aspect of the social landlord’s affairs. Indeed, the powers can kick in if the regulator feels that a transfer, "““would be likely to improve the management of some or all of its social housing””." I chair a highly reputable housing association, the Hanover Housing Association, which manages a large stock. I think we do very well, certainly in terms of the Audit Commission’s inspections of our affairs. However, even the best run organisations may have somewhere within their affairs a failure in relation to one of a possibly long list of standards devised by the regulator. If we fail in some regard we need to be told to improve, we need to be reprimanded, and if appropriate, we need to be fined, as the Bill enables the regulator to do. We need to compensate our tenants if they have been treated poorly, as the Bill enables the regulator to insist on. I suggest, however, that it is going too far, if no mismanagement is proven as a result of an inquiry, for the regulator to have the power against any failure, not just mismanagement, to bring in new staff or transfer the property to another organisation. Is the test of mismanagement too strong? Is it too high a hurdle? Would it be difficult for the regulator to prove mismanagement? We have already discussed the definition of the term. I repeat that mismanagement is, "““managed in contravention of a provision of this Part or of anything done under this Part, or … otherwise conducted improperly or inappropriately””." It does not sound too high a hurdle to prove mismanagement, and if none is proved, I suggest that these draconian powers go too far. A moment ago the Minister gave us an example of something that was inappropriate: failure to have sufficient insurance, which is not perhaps the most heinous of crimes. It should be insisted that that is rectified quite quickly, but it should not trigger the collapse of the organisation and its takeover by new management. This far and no further. It is our duty to be vigilant in looking at the role of the regulator and to draw some lines where we believe that powers are being extended an inch or two too far. This is one of those cases. I beg to move.