Housing and Regeneration Bill

This has been a very useful debate, and I am grateful to all participants, who have been very helpful, in particular the noble Baroness, Lady Ford, with her experience of English Partnerships. I am sure that most noble Lords will be aware that, in most circumstances, the agency will be able to dispose of land in any way that it considers appropriate in accordance with its objects or objectives. However, Clause 10 carries on the current requirement for English Partnerships and the Housing Corporation, that if the agency wishes to dispose of land that was acquired through compulsory purchase, it must first obtain the consent of the Secretary of State. Clause 50 qualifies that to the degree that it allows the Secretary of State to issue a general consent setting out the circumstances in which the agency may dispose of land without seeking specific consent in each and every individual case. As I understand it, officials have now begun to produce a draft of what that general consent order might look like. Perhaps, as this is Committee, I will outline what it will cover. The four proposed tests will be, first, that the disposal of land is for the purpose of the objects of the Homes and Communities Agency as set out in Clause 2(1) of this Bill; no surprises there. The second test will be the disposal of land meeting value-for-money requirements, which is fairly straightforward. The third point is that disposal of the land does not constitute unlawful state aid under Article 87 of the Treaty of European Community. Fourthly, the unrestricted value of the disposal should not exceed £400 million for disposals undertaken through an open and unconditional bidding procedure, or £5 million for other disposals. That is some of our thinking, and we are going to consult on that with key stakeholders. That is where we have got to on the general consent regime. I suspect that in most cases the purpose of the amendments is to provide for more detail to be given on how the arrangements will work in practice. I have given some flavour of that, and I hope I can now give assurances that will satisfy noble Lords in this debate. First, I shall deal with Amendment No 55. This amendment seeks to place an obligation on the Secretary of State when considering whether to give consent to the HCA to dispose of land for less than best consideration to take into account the benefit to the community where the disposal takes place. In a sense, this amendment pushes at an open door. Of course, that is what the Secretary of State will want to do and the potential benefits will be part of the proper consideration. But I am sure that the Secretary of State will also want to take into account the cost to the community of selling the land for a lower value than could have been reasonably obtained. I should stress also that ““best consideration”” is a term with a meaning. Generally it is understood to mean the best market value that can be obtained. Case law shows that matters of wider public benefit may be taken into account only if the benefit has a monetary value that can be assessed. We accept this because without it there would be no transparency of process for the public purse. The amendment refers only to the benefits that may be brought to a community via a less than best consideration land sale and does not make reference to the cost to it of not obtaining the best possible price. What we have to consider is that every pound below best market value is money that does not go towards the wider objectives of the HCA. Given the significant role that the HCA will have in delivering new homes and generating older places, and working with communities to deliver solutions appropriate to the locality and the needs of local people, it is vital that in choosing to sell for less than the best price, the agency is assured that the wider public benefits it obtains as part of that sale at least offset the benefits that it will not be able to deliver elsewhere due to the lower return. On this basis, we think that Amendment No. 55 is unnecessary and that the current balance in the legislation is probably about right. Amendment No. 55A in the name of the noble Baroness, Lady Hamwee, represents the other side of the same coin. As I understand it, the amendment seeks to ensure that in determining which offer to accept for land, the HCA should give equal weight to the social and environmental benefits of an offer as it does to the economic benefits. The noble Baroness argues that there are circumstances in which gain for the pure best financial value might not be the right thing to do and we do not disagree with that. However, I can offer an assurance that the amendment is unnecessary because, as we believe we have drafted it, Clause 10 already empowers the HCA not to accept the highest bid for its land subject to the Secretary of State’s consent. We do not want unnecessarily to fetter the activities of the HCA by requiring it to come to the Secretary of State on each and every occasion that it considers it can better achieve best value for public money by selling at a lower than best market price. I am sure that when I mentioned Clause 50 earlier, the noble Baroness will have picked up on our intention to create a general consent by setting out where disposal would fit into the specific circumstances without having to seek an individual consent. The general consent can address issues of wider public benefit, including the need to obtain better value for money for the public sector as a whole as well as ensuring proper accounting and reporting responsibilities, and, as I said earlier, compliance with state aid rules, the raison d’être for which is widely understood by Members of the Committee. Finally, I turn to the amendments tabled by the noble Lord, Lord Greaves, which I think he described as being probing amendments. The purpose of the first of the amendments, Amendment No. 56, would enable the HCA to sell land at less than best consideration or land which it has compulsorily acquired to local authorities for purposes which meet the agency’s objects without seeking the Secretary of State’s consent. The noble Lord has argued today and on other occasions that local authorities are best placed to meet the needs of local communities and ought as a consequence to be treated as a special case when it comes to purchasing land from the HCA. I do not have any difficulty with the first part of that argument—indeed, my noble friend has assured the Committee that the agency will be working very closely with local authorities and regional partners to identify the best way to deliver those priorities. However, I cannot agree that the HCA should have a blanket ability to provide subsidised land to local authorities, which would be the effect of the amendment. I see no justification for local authorities to be able to buy cheaply from the HCA, any more than any other organisation providing community benefits. The HCA cannot itself buy land cheaply and would need to be assured that the discount it was offering to a local authority would provide sufficient community benefit to at least offset the benefit that it would not be able to deliver elsewhere due to receiving a lower rate of return. Moreover, if the HCA wants to sell land at lower than market price to a local authority because of wider public benefits in pursuit of its objectives, it may do so if it can demonstrate that the benefits have a sufficient monetary value to equal the market price. That is subject to the Secretary of State’s consent, but, as I said, the provision of a general consent will obviate the need for the HCA to seek permission in each case. We have given our commitment to working with stakeholders to provide a general consent that will enable the agency to dispose of land at less than best consideration where we feel that that is appropriate, while also protecting and providing for sufficient financial control to protect public investment. We will of course consult on that.