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Housing and Regeneration Bill

This group of amendments is related to part 2 of the Bill, which establishes the new social housing regulator. Before I come to the amendments, I would like briefly to update the House on important developments to the regulator since the Bill left us to go to another place following the Third Reading debate in March. First, the regulator has a new name. During the Bill's passage through this House it was known as the office for social tenants and landlords—or Oftenant. Without exception, nobody liked the name. It has now become the Tenant Services Authority—the TSA—which better reflects the organisation's core regulatory function of protecting tenants. Secondly, the two senior appointments to the regulator have been made. Anthony Mayer is the first chair and will bring a wealth of experience to the role, given his excellent track record in social housing, local government and the financial sector. Peter Marsh is an excellent choice as first chief executive; his background in the fields of registered social landlords and local authorities will mean that he recognises the need to ensure tenants receive a high-quality service. Finally, the House should be aware of our recent announcement that we would like to see at least two of the positions on the TSA board filled by people with direct experience of being a tenant. Any regulatory system that professes to put tenants at its heart has to give tenants a say at the highest level. With these board appointments, that is precisely what we intend to do. I would now like to discuss an issue that has occupied us since the Bill's introduction: cross-domain regulation. As we have made clear from the start, we are fundamentally committed to expanding the regulator's remit to cover local authority housing. This would be consistent with the recommendations set out by Professor Cave in his report, ““Every Tenant Matters””. I believe this commitment became even clearer when the Government's draft legislative programme for the fourth Session was published in May, as it included a community empowerment, housing and economic regeneration Bill that would deliver, among other things, cross-domain regulation. However, during the passage of this Bill there has been strong cross-party support in both Houses for taking an enabling power in the current Bill. This would enable us to implement cross-domain regulation through secondary legislation, rather than through the route of a fourth-Session Bill. I am not convinced that this would be a particularly advantageous method of achieving the shared goal we all want. It would not deliver cross-domain regulation any faster, as it will be complicated to draft the provisions whatever legislative route is chosen, and it would limit the opportunity for Parliament to scrutinise what will be an important and complex piece of legislation. However, it is also clear that Parliament has shown its preference. The argument that the regulator's culture would develop and be defined if it only covered RSLs at the outset and there was no commitment in the Bill to include local authority social housing were strongly advanced in Committee and in the other place. On the basis of that strength of feeling, we brought forward an enabling clause on Third Reading in the other place so that the TSA's culture and operating approach would be defined by the commitment to regulate both RSL and council house tenants. The power contained in the new clause in Lords amendment No. 75 is unavoidably wide given the range of relevant legislation that will need to be amended. I am somewhat surprised that the other place was content with its broad scope. However, its broad nature is necessary, because it would be counter-productive to Parliament's wishes if we were to forgo the opportunity to include cross-domain in this Bill only to find that we had drafted an enabling clause too tightly. However, Lords amendment No. 203 requires that the power will be subject to the affirmative resolution procedure in Parliament, and we intend to conduct a full public consultation on the draft regulations before they are laid before Parliament. This is a significant development, and one that I believe the whole House will welcome. It will mean that council tenants will enjoy the same protections and support from the regulator as housing association tenants without the need for a further Act of Parliament. In a similar vein—I see that my hon. Friend the Member for Stroud (Mr. Drew) is in his place—the Government have always been committed to the development of well-managed and financially viable community land trusts. As I announced in April, we intend to consult later this year on how we can help to develop the community land trust sector further and overcome some of the barriers. We intended to consult at that stage on whether there should be a legal definition of community land trusts, but in view of the cross-party support in both Houses—led most eloquently by my hon. Friend—which strongly urged us to use the opportunities provided in this Bill to help support CLTs still further, we have accelerated this timetable to give a definition of community land trusts. Lords amendments Nos. 66 and 67 define CLTs. In drawing up this definition, we have worked closely with the CLT movement, and I am grateful for its positive and constructive input. Part 2 of the Bill concentrates on raising the standards of housing services for tenants of social housing. A key part of achieving this objective is greater tenant empowerment, with better access to meaningful information to hold their provider of housing to account. Lords amendments Nos. 69, 70, 103 and 124 to 127 are about complaints and guidance. It has never been anticipated that the job of the regulator would be to address the bulk of tenants' complaints; that is the responsibility of landlords themselves, through their complaints procedure, and of the housing ombudsman. However, we have also always acknowledged that the TSA needs to be responsive to evidence from tenants and others about systematic failures by a provider, and to use that evidence to trigger regulatory intervention where needed to raise tenants' standards or improve financial viability or governance. Lords amendments Nos. 103 and 124 to 127 amend clauses 190, 212 and 213 to achieve this objective explicitly. They require the TSA to issue guidance specifically relating to complaints about the performance of providers. The guidance must set out the procedure to be followed in making a complaint, the criteria to be used by the regulator in deciding whether to investigate, and the periods within which the regulator will aim to inform complainants of the result of complaints. The TSA will be obliged to consult tenant representatives before issuing this guidance. Lords amendments Nos. 69 and 70 also require it to include in its annual report a general description of the complaints it has received during the year and how it has dealt with them. This would improve transparency and accountability. As part of tenant empowerment, we believe passionately that tenants should have the opportunity to be involved in the regulatory function. This is at the heart of part 2 of the Bill, with such measures as the requirement to consult tenant representatives on standards and guidance. I have already mentioned our wish that at least two of the regulator's board members should have experience and direct knowledge of being a tenant. However, we are still keen to go further. Lords amendment No. 71 therefore inserts a new clause in the Bill to ensure that there is a statutory duty on the TSA to promote awareness of its functions among tenants and, where appropriate, to consult or involve them in the exercise of its functions. The new clause also requires the regulator to publish a statement describing how it will fulfil these duties. These additional statutory responsibilities have been warmly welcomed by key stakeholders, including the National Consumer Council, the Tenant Participation Advisory Service and the National Federation of ALMOs. Debate in both Houses on part 2 of the Bill rightly concentrated on the appropriate balance to be struck between the wish to increase tenants' standards, allowing the regulator appropriate powers to raise those standards and the fact that registered social landlords are independent bodies with responsibility for managing their own businesses. I have been aware at all stages of the Bill's passage of concerns regarding regulatory creep or the passporting of policies from the Secretary of State to registered providers. The regulator must minimise interference and not misuse its powers, and it must act on the basis of evidence and of real need. With these broad aims in mind, we have responded to concerns that the major enforcement powers should be exercised only in the event of serious problems. Accordingly, Lords amendments Nos. 141, 142, 147 and 155 to 162 amend the regulator's enforcement powers of management transfer, transfer of land, amalgamation, restrictions on dealings and removal or suspension of an officer. These enforcement powers could only ever be used after an inquiry, and their use would also be subject to the various other protections in the Bill against disproportionate regulatory intervention. Nevertheless, these amendments have provided further reassurance by removing so-called ““breach of standards”” as grounds for use of these enforcement powers. We have also required that the regulator must obtain consent from the Secretary of State before using them. In addition, we have addressed the concerns expressed in Committee by the hon. Member for Montgomeryshire (Lembit Öpik) that the fees set by the new regulator might be excessive. With Lords amendment No. 76, the Bill now requires the TSA to seek the Secretary of State's agreement to the principles on which fees are set. That is a move from the original process, whereby the Bill required the regulator to consult the Secretary of State on those principles. Lords amendments Nos. 108 to 119 relate to the inspection of registered providers. The Audit Commission inspects the overall management performance of all large housing associations over a certain period, and that has helped the overall and broad increase in standards, but given the new framework, in which investment and regulatory functions are being split, with the latter concerned with risk-based approaches, things can be done differently. Unlike the somewhat mechanical and cyclical current system, whereby inspections take place in a very similar way regardless of the risk across providers, the regulator will determine when an inspection is needed and what its scope should be. The aim is specifically to allow the regulator to pick up on things such as serious concerns about a provider's performance as a result of information it collects or concerns raised by tenants and others about a specific estate. Lords amendment No. 108 requires that the TSA must engage the Audit Commission to conduct inspections related to housing management functions—on standards—under clause 191. We do not wish the Bill to give rise to a plethora of different inspectorates, as we believe that would be unhelpful, confusing and counter-productive. However, other bodies, such as a major accountancy firm, for example, may be used to investigate governance or financial concerns, or anything that does not come under clause 191. We have also responded to concerns raised in the Commons Committee stage about the disposal consents regime. Registered social landlords are currently required to seek the Housing Corporation's consent for the disposal of any land. Lords amendment No. 89 ensures that where a non-profit registered provider wishes to sell a home that is let under a secure tenancy, it can do so only to another non-profit registered provider. Some of the protections of a secure tenancy rely on the status of a landlord as a public sector landlord or registered social landlord—or non-profit registered provider, as they will be known under the Bill. We do not wish to see a home let under a secure tenancy transferred to a non-profit making registered provider, as that would be contrary to this part of the Bill's philosophy of protecting social housing tenants. The amendment makes that clear by explicitly prohibiting such a disposal. Lords amendments Nos. 90, 95, 96, 101 and 102 would ensure that disposals need only the regulator's consent for social housing. Disposals of land not including social housing will not require the TSA's consent. Much like the group of amendments on part 1, this group also contains a number of minor and technical amendments designed to ensure that the Bill's clauses work properly in practice. For example, the group includes amendments to restrict the TSA's information-sharing powers, in response to concerns raised by the Joint Committee on Human Rights. Lords amendment No. 78 arises directly from concerns raised in Committee stage by the hon. Member for Montgomeryshire that a requirement of the High Court to be the arbiter of an appeal against the decision of the regulator in respect of registration or deregistration would be, ““Overkill and extortionately expensive””—I think that that is a direct quote. I agreed in Committee to go away and look at the matter, and we therefore tabled an amendment in the other place to see whether there could be a viable first-tier tribunal route. We see advantages in terms of lower costs and a reduced burden for smaller registered providers. The amendment therefore allows the Secretary of State, by order, to transfer the functions to the first-tier tribunal. I apologise to the House for taking some time in addressing the amendments in part 2 of the Bill. Like my hon. Friend the Member for Luton, South (Margaret Moran), who touched on this in her intervention, I hope that the House will agree that they go a significant way to improving the Bill. They are an important part of the Bill, because they allow us to achieve our objectives: giving all social tenants more choice and a greater say over how their homes are managed; eliminating unnecessary regulation and bureaucracy; protecting public investment; and, crucially, improving standards for tenants. I commend the amendments to the House.