Housing and Regeneration Bill

moved Amendment No. 87: 87: Clause 35, page 17, line 4, leave out ““to the person”” and insert ““in respect of that grant”” The noble Lord said: The amendment makes a technical correction to Clause 35, which gives the HCA powers to recover the financial assistance given by it to the provision of social housing. Clause 35 also gives the HCA powers to direct the social housing provider to reinvest that assistance rather than repaying it. These are powers which have been held by the Housing Corporation since at least 1988 in respect of grant to registered social landlords and are currently found in Section 27 of the Housing Act 1996. Turning to the remainder of the government amendments in this group, Amendment Nos. 88 and 89, together with Amendments Nos. 91 to 94, which relate to Clause 36, clarify that the HCA has the powers to enter into equity-sharing agreements with providers of social housing. Again, these powers are held already by the Housing Corporation under Section 27 of the Housing Act 1996. It is mainly through the provision of funding that the agency will drive forward its regeneration and housing delivery, facilitating work between partners and undertaking projects that make the building of homes in some areas attractive to and possible for developers. The agency will seek to build on the success of the investment programme of both English Partnerships, the Housing Corporation and, importantly, the Department for Communities and Local Government. The ability to enter equity-sharing agreements with providers of social housing is an important part of this and a part of the HCA’s ability to use funding arrangements in creative and innovative ways. But I should be clear that this is not a power that will allow the HCA to share uplift but not downside. As currently drafted, the powers already allow the HCA to recover less than the original amount of grant. These amendments are required to make clear that it may recover more. But this is not just about the agency being able to take advantage of an uplift in value; it would be expected to share a proportion of any downturn as well. This is not a new power. The Housing Corporation is already able to enter into equity-sharing agreements using its powers. In 2006 the National Audit Office published a report into low-cost home ownership, A Foot on the Ladder, which has already been mentioned, and which recommended that the Housing Corporation could achieve better value for money from its investment in low-cost home ownership if it made use of this power. The report recognised that housing associations do not distribute surpluses and that proceeds of sales were therefore reinvested in the affordable housing sector. However, it recommended that the amount recycled through the recycled capital grant fund, in accordance with a determination by the Housing Corporation, should be linked to the value of the property, not just the sum of the original grant. That is designed to ensure that reinvestment of the full value of taxpayers’ contribution was focused on national and regional housing priorities. Following that recommendation, the corporation consulted with registered social landlords on establishing that link to value and it was subsequently agreed by the corporation’s board that such a link should be made. However the introduction of the link was suspended in the context of the excellent value bids for developing shared ownership homes in the 2008-11 funding round and the introduction of new equity loan products with registered social landlords and private finance partners. While these powers have not yet been used by the corporation, the concept is well established and has been discussed in detail with the RSL sector. It is also worth bearing in mind that in future the HCA will not be dealing only with housing associations, as it will have powers to enter into funding agreements with profit-making bodies which are not under the same limits as housing associations in terms of how they can spend any surplus. This power will therefore be an important tool for the Homes and Communities Agency to ensure that it achieves value for money from its investment in social housing through profit-making providers. Amendment No. 90A is also in this group and I should briefly describe its effect. It gives the HCA powers to reduce, suspend or require repayment or reapplication of grant in specified circumstances. These existing powers are used by the Housing Corporation and are in Section 27 of the Housing Act 1996. They will give the HCA important powers to invest flexibly, as well as ensuring that it can achieve value for money by enabling it to suspend or reduce grant payments if a provider does not deliver. We concede that in this area the relationship between regulation and investment is complex and we propose in these amendments to make absolutely sure that the regulator and the HCA work well together. It is possible that use of the HCA powers under Clause 35(2) and (4) could cause or reflect financial difficulties for a registered provider. If a registered provider is failing to deliver on its investment programme, that could indicate some wider problems and a subsequent reduction of grant could cause further difficulties. It is important therefore that the regulator is fully aware of the HCA’s use of these powers, as it would have been when regulation and investment functions were located together in the Housing Corporation. That is why Amendment No. 90A is needed. I beg to move.