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Housing and Regeneration Bill

This is indeed an important issue and I shall update the Committee on where the Government are. I am grateful to the noble Baroness for moving the amendment, which would have two effects. First, it would prevent registered providers of social housing from using ground 8; secondly, it would prevent the court granting possession under ground 8 to any landlord if any of the rent arrears was due to a delay or failure to pay housing benefit, unless the court considered it reasonable to do so. The amendment specifies that this would apply only where the delay or failure to pay housing benefit was not due to a wilful act or omission on the part of the tenant—which would obviously be right. The noble Baroness expressed a range of concerns about ground 8. They are familiar and are well authenticated in terms of the groups and bodies working in the field. As the noble Baroness pointed out, similar views were expressed in the other place during earlier stages of the Bill. We recognise those concerns and the noble Lord, Lord Best, was absolutely right—serving notice in such circumstances is an affront to justice. We are eager to find a way to address those concerns. In April, therefore, following the debate in the other place, we established a stakeholder working group to consider the concerns about ground 8 in more detail, so I can confirm that that has happened. It is required to report back to Ministers in the summer. The groups on it include Shelter, Citizens Advice and the Charted Institute of Housing, which are all familiar at first-hand with the matter, and we appreciate the constructive contribution that they are making. On the wider point, we have seen some improvements on housing benefit performance. Between 2002-03 and 2007-08, the average time taken to process a new claim for housing benefit or council tax benefit fell from 55 to 28 days. It is still not very good, but it is half what it was. The latest figures for the second half of 2007-08 suggest that the improvements continue: it is now, on average, 26 days. I do not defend that, but considering where we were, it is an improvement. To return to the burden of the amendment, I fully appreciate the point that the noble Baroness is making, but I suggest that it would be preferable to let the working group complete its work before we change the law in the Bill as she proposes. A lot of work is still to be done. The working group agrees unanimously that there is a lack of systematic evidence about the use of ground 8 by housing associations. A wealth of evidence can no doubt be collated—the term ““anecdotal evidence”” sounds pejorative but it is not meant to be—but we need a proper evidence base for this. Given the range of stakeholder views on the subject, it is important that any changes to legislation—which would be profound—are made on a full understanding of current practice and the effects that those changes would have. In order to address that evidence gap, the Housing Corporation will be undertaking research into housing associations' rent arrears management practice, including their use of ground 8. That will be presented to the working group for its consideration in due course. I now turn to a few of the specific points that the noble Baroness raised. I clearly have sympathy with her concerns, because ground 8 has given rise to some very hard cases. That is one of the principal reasons why we have brought those people together: to try to assemble the evidence and find a proper way forward. It is also important to have in mind the scale of this issue. Citizens Advice commissioned a report recently that acknowledged that only a small minority of RSLs use ground 8. The broader context is extremely positive. The overall rate of evictions in the RSL sector remains low, at 0.6 per cent of stock. The total number of evictions carried out by RSLs has fallen over recent years, despite the growth of the sector. So we are looking at better, more careful practice. According to Housing Corporation figures, the total number of evictions carried out by RSLs fell by nearly 15 per cent between 2004-05 and 2006-07; and RSL evictions related to rent arrears declined by more than 17 per cent during the same period. That reflects excellent work by the RSLs to improve how they manage rent arrears. Together with a number of reforms that we and the Housing Corporation have put in place, that is creating a much more positive and productive climate, a much more holistic approach to dealing with tenant circumstances when rent arrears arise and more proactive working between the RSLs and the local authorities. The noble Baroness referred to this being a last resort. Let me briefly expand on that for the record, because it is important to explain how we have arrived at our position. The Housing Corporation made clear that eviction should only be used by RSLs as a last resort in rent arrears cases—particularly where those arrears have arisen as a result of delays in housing benefit payments. That was reflected in the review of the Housing Corporation's regulatory code and guidance in August 2005. The Government published good practice guidance in June 2005 on improving the effectiveness of rent arrears management, which included advice and best practice on early intervention policies and proactive approaches. In 2007 the Housing Corporation issued housing management guidance stating that possession proceedings for rent arrears should not be started against tenants who can demonstrate that they have a reasonable expectation of eligibility for housing benefit, have provided the local authority with all the evidence required to process a housing benefit claim and paid required personal contributions towards the charge. A pre-action protocol for rent arrears was also established as part of the civil procedure rules with the aim of ensuring that eviction is the last resort for all landlords in rent arrears cases. So we have a combination of agency which is very productive. Nevertheless, the noble Baroness is absolutely right, as are the agencies, that there are concerns about the actions of a small minority of RSLs who might not be following the guidance. We are keen to ensure that these concerns are resolved, whether through legislation or regulation. That is one of the reasons we have established the group. The noble Baroness argued that it is wrong in principle that the court cannot take the tenant's wider circumstances into account in ground 8 cases and I understand that argument. But, again, the regulatory guidance exists to ensure that ground 8 is used only as a last resort. It puts the onus on the RSL to ensure that wider issues that might affect the rent arrears, such as housing benefit problems, are resolved before seeking eviction. There is a more subtle point about current practice. I understand that some of the RSLs that use ground 8 do so precisely in order to resolve their rent arrears problems. If those RSLs had to rely on discretionary grounds alone, they might seek proceedings for possession much earlier to prevent the level of rent arrears from becoming unmanageable. I understand the process tends to take longer when you use discretionary grounds and that the final outcome is much less certain. By contrast, the mandatory nature of ground 8 gives the RSLs greater confidence to hold back formal proceedings until as late as possible in order that they may spend time working with tenants and trying to resolve the problem. I am not necessarily endorsing that approach. My only point is that the noble Baroness rightly argues that the certainty associated with ground 8 is injurious to the interests of tenants while others argue that that certainty can be used creatively in order to arrive at a better position. I also understand that some RSLs use ground 8 only when tenants are unwilling to engage with them on a rent arrears problem. In such cases I have some sympathy with the RSLs, particularly the smaller ones, because of the threat that poses for their viability. I do not want that to be seen as a staunch defence of the status quo because I am not defending it. We would not have set up the stakeholder group otherwise. My purpose is to illustrate that this issue is very complex. So, before we rush to a legislative solution, we should allow the working group to continue with its thorough work, including the research exercise to which I referred earlier. The noble Baroness asked me how that now links in with the regulator. That information will be passed on to the regulator in the context of his work in setting standards and so on. The regulator will have a statutory objective to ensure that tenants have choice and protection and I see it fitting squarely into that. It will be a matter for the regulator to determine in consultation with representatives of registered providers and social housing tenants. We have got somewhere to go with that and I look forward to seeing the group's report and recommendations, and to following through on them.