Housing and Regeneration Bill

My Lords, I declare my interests, from none of which I derive personal financial benefit, in the local government and housing association sectors and, indirectly, in the private rented sector. Not least because of those interests, I have received proposals for amendments to the Bill from the Local Government Association, the National Housing Federation, the Chartered Institute of Housing, Help the Aged, Shelter, RADAR, CDS Co-operatives, the National Federation of ALMOs, the Countryside Alliance, London Councils, UNISON, RIBA and others. However, despite this volume of interest in improving the Bill, I note that its fundamentals receive the approval of these many interested parties. In its underlying intentions, the Bill is of considerable significance. It enshrines and underpins the Government’s recognition both that the UK is suffering from acute shortages of housing—leading to homelessness, overcrowding, inflated prices and big problems for the wider economy—and that efforts must be redoubled in tackling troubled neighbourhoods in need of regeneration. For more than a decade, it has been clear that the building of new homes each year—the supply—has been falling further and further behind the growth in new households each year—the demand for extra homes. The misery caused by the resulting housing shortages not only affects young people trying desperately to get on the housing ladder—I fear that many tens of thousands have overstretched themselves and now face the horrors of mortgage repossessions already affecting more than 1,000 families a fortnight—but it affects those who are forced into accommodation for the homeless or are living in dreadful, overcrowded conditions that we thought had become history. Housing shortages also mean long-distance commuting that ruins family life and a scarcity of key workers because they cannot afford a home near the schools or hospitals or other services that need them. Housing shortages also distort the whole national economy. Five years back, when the Prime Minister was Chancellor, he asked Kate Barker from the Bank of England to look at this problem. Her reports added credibility and precision to the case for boosting housing output. Targets are now set for an extra 240,000 homes a year by 2016, with rather less than 30 per cent of these being subsidised, affordable homes for rent or for low-cost home ownership. Although that target is clearly on the right lines, it will never be accomplished simply by hoping that the market will do what it has previously failed to do. Indeed the private sector housebuilding industry, as the noble Lord, Lord Dixon-Smith, has mentioned, is now going into a period of sharp decline, not growth. Housing output last year was around 160,000 homes, requiring a 50 per cent rise to reach the target of 240,000 a year. Yet for the year ahead, it looks certain to slump further. Last week, Persimmon, one of the biggest housebuilders, called a halt to new development in the face of mortgage difficulties for would-be buyers and the loss of confidence in the market. Other housebuilders have seen their shares slide and are cutting back too. Any expectations for rapid growth from the housebuilding industry, an industry that has benefited so much in the past from acute shortages in the market, must now be set aside. Ever since the demise of council housebuilding, which used to run at a level comparable to that of the private sector, and the unwillingness of Governments for 20 years to fill that gap with housing association provision, dependency on the housebuilders has placed this country in a highly vulnerable position. That vulnerability is not just about the overall numbers of new homes needed, most particularly in London and the south-east; it is also about the improbability of the private sector being able to regenerate run-down areas where development of mixed use, mixed tenure can revive the local economy, reverse inner city flight and reduce the necessity to use up virgin land elsewhere. For the big housebuilders, building on greenfield land, or only on the most upmarket of the previously developed brownfield sites, has been more profitable than addressing unpopular areas with social problems. Yet those problems will multiply if extensive and expensive revitalisation is not addressed urgently. We can see now so very clearly that both easing housing shortages and tackling urban regeneration cannot be left to the market. It requires energetic and imaginative intervention from central and local government. Hence the need for this legislation with the significant new approach that it heralds. The creation through Part 1 of the Bill of a Homes and Communities Agency, with the powers and funds of both the Housing Corporation and English Partnerships, plus key functions from the Department for Communities and Local Government, responds to the necessity for a robust, well equipped and well resourced national body to act in partnership with local councils. It will have powers and skills for land acquisition and assembly; land reclamation and remediation; sometimes the use or at least the threat of a compulsory purchase order if an owner holds society to ransom; new public-private companies; and further use of social landlords who can build and manage mixed income, sustainable and accessible communities. The Homes and Communities Agency has the potential to be the answer to the major housing and regeneration problems which face the UK. It has an impressive chief executive waiting in the wings, Sir Bob Kerslake, from the local government sector who is well able to build those partnerships with councils that will be the bedrock of success. We will be looking at the detail of Part 1 of the Bill, and I suspect that some noble Lords will have comments on the concept of eco-towns, which has already been noted. They could create some exciting new communities and, I hope, take on board the lessons that remain valid from the garden villages and garden cities which were built exactly 100 years ago. But with a target of around an extra 100,000 homes, which I suspect may not be accomplished, out of a total of 2 million homes, by 2016, the eco-towns represent a very modest 5 per cent of the whole. I am confining my remarks to the big issues in this Bill and after welcoming Part 1 with its plans for the Homes and Communities Agency, my remaining remarks relate to Part 2, the Office for Tenants and Social Landlords, Oftenant. At first, I had concerns that the role of regulator held by the Housing Corporation, alongside its funding role, was to be hived off to a separate body. The Housing Corporation has not only spent its annual allocation of government funds each year, but has protected taxpayers’ money and ensured no scandals, no bankruptcies and no loss of money by any private sector investor. It has done a good job and I congratulate it and would add the name of Peter Dixon to that of the noble Baroness, Lady Dean of Thornton-le-Fylde, to the roll-call of honours for the Housing Corporation. With the magnitude of the task facing the new HCA, I think, including the regulatory role too could have overloaded this new agency. There have been three anxieties about the role of Oftenant, which I would like to address in turn. First, there is the anomaly in that an office for tenants does not include any of the tenants commonly regarded as most at risk of mistreatment. There are growing worries that the recent expansion of the private rented sector, with its growth from about 9 per cent of the nation's stock to about 12 per cent, has brought with it a huge number of amateur, and often speculative, landlords who are currently outside any regulatory control. While social landlords are subject to intense scrutiny, continuous monitoring of performance and inspection by the Audit Commission, and are part of the Housing Ombudsman scheme, there are more than 1 million landlords whose tenants are denied that whole range of protection and redress measures. On the face of it, one would expect regulatory attention now to switch away from the social landlords to the letting agents and private sector landlords where potential abuses can currently be addressed only by court action, which is far beyond the resources of most tenants. I recognise that this major lacuna in the Bill is unlikely to be remedied this time round. I am certainly hoping for important insights from Dr Julie Rugg at the University of York whose review of the PRS for the Government will be published in the autumn. Nevertheless, it would be good to have reassurance from the Minister that there is a serious intent at the very least to introduce a redress and ombudsman scheme for this sector, comparable to that for estate agents and for other sectors, from telecoms to financial services and energy suppliers. The second concern raised by the Bill is that even in relation to tenants outside the private sector, the role of the regulator is currently to be confined only to housing associations. Separate legislation will be needed to extend the remit to cover tenants still remaining in the council sector and, importantly, in the arm’s-length management organisations that lie between traditional council and non-public sector housing associations landlords. I know that the Government hope legislative measures will emerge to extend the regulator's role to cover all tenants and non-profit landlords at a future date, but there are no guarantees, of course, that such opportunities will arise. The Government’s expert group convened by Professor Ian Cole, from Sheffield Hallam University, which represents those from local government and from the ALMOs as well as those representing the interests of tenants, seems in agreement that there are no insuperable difficulties to achieving domain-wide regulation. While the Government have left it very late to put together the requisite clauses to this end, an enabling clause within the Bill could open the door to this natural extension that would put all social sector tenants on the same footing. After all, it is often a matter of chance whether a family in need of subsidised housing has moved into a home provided by a housing association, or an arm’s-length management organisation, or a local authority. With transfers of housing stock between these landlords, the same family can experience a different landlord without moving. It seems only sensible, and just, that tenants of all social landlords should enjoy the same measure of protection and redress as soon as possible. Perhaps an amendment here will find favour with your Lordships. Finally, on the Office for Tenants and Social Landlords, there has been something of a campaign, orchestrated by the National Housing Federation but with cross-party support from Members on the Bill Committee in the other place, to moderate the degree of control exercised by the regulator. Certainly there are important points of principle at stake here. If every housing association were simply a creature of central government, forced to adopt a plethora of requirements imposed by the regulator who, in turn, was taking instructions from the Secretary of State, then all the advantages of using independent organisations, accountable to their own boards of management and able to innovate and be entrepreneurial, would be lost. It is precisely because they are not public bodies that the housing associations have enjoyed respect across political parties and have pursued a range of activities which may or may not have been priorities at the time for the current housing Minister but so often have shown the way forward. The housing associations are now a precious national asset, ready to make up for the deficiencies of past over-reliance on private housebuilders. To saddle them with overbearing regulatory controls would be to risk strangling the golden goose that the nation now needs so badly. The good news—and I note the reassurances of the Minister—is that efforts in the other place have greatly improved the framework for regulating these independent bodies, the majority of them freestanding charities. Although there may be further tweaks to hone and polish the system, the Government are to be congratulated on moving a fair way already. The challenges ahead remain daunting, but the Bill brings, perhaps in the nick of time, the instruments of change which could provide the necessary responses. I feel sure that the wisdom of your Lordships will lead to further improvements as the Bill moves forward but, at this stage, I give it a warm welcome.