Housing and Regeneration Bill

I am pleased. Amendment No. 101C of the noble Lord, Lord Dixon-Smith, and the noble Earl, Lord Cathcart, would require the Secretary of State, when appointing new members of the regulator, to ensure that at least one-third of them are current tenants of social housing providers. We do not disagree with the spirit of the amendment, because we too want there to be tenants as members of the regulatory body. Having experience of living in social housing will clearly be advantageous for potential members, as it will give them first-hand knowledge of the problems that tenants face. As I explained earlier, we are now recruiting through the normal public appointments procedure, and we have specified that some members should have experience as tenants. We currently envisage that the regulatory board will comprise the chair, chief executive and seven members and, among those seven, we would like to see at least two with direct experience of being a tenant. Caroline Flint made that clear in her announcement of 6 June. However, an amendment is unnecessary to establish that. While we resist Amendment No. 102 of the noble Viscount, Lord Eccles, we understand the underlying concerns behind it. An important point is that Clause 84(2) specifies that a period of appointment may not exceed five years. It does not stipulate that appointments must last for five years, but merely sets it as a maximum length. In practice, it is likely that board appointments will last for three, or perhaps four, years—not least because a three-year appointment will probably be seen as a less daunting commitment for potential members. Housing Corporation board members have generally served three-year terms followed by a three-year reappointment, dependent on a satisfactory appraisal and recommendation by the chair. We would expect that practice to continue; indeed, as I have said, we are currently advertising for board members. My noble friend Lady Dean made an important point about not having everybody going at the same point in the cycle. Certainly, when I have been involved in these appointments in the past, it was an issue. By having that flexibility with a five-year term, one potentially creates a situation where retirements come up periodically. That is an important consideration. Amendment No. 102ZA would add the word ““once”” to the end of Clause 84(2). Hence the subsection would read, ““A period of appointment may not exceed 5 years (but a member may be reappointed) once””. The amendment would clarify how often reappointment will be permitted. It is not necessary to include this in the Bill. The regulator is a public body whose appointment must comply with the guidance of the Office of the Commissioner for Public Appointments. This guidance makes it clear that public appointments should not last longer than 10 years, which allows for an appointment of five years and one additional reappointment. The purpose of the amendment is therefore already served through that route. Amendments Nos. 102ZB and 102ZC seek to amend Clause 84, which permits the Secretary of State to dismiss members of the regulator in only five circumstances. These include absence of over six months, bankruptcy, financial interest and other forms of inability, unsuitability or unwillingness. This is the only way in which a member can be dismissed. The amendments seek to remove the specific reference to misbehaviour, so that ““Case 5”” refers only to members being unable, unsuitable or unwilling to perform duties, without specifying that this includes when there is misbehaviour. I therefore assume that the noble Baroness is content with the general principle behind the clause and behind dismissal in this case, but simply dislikes the use of the term ““misbehaviour””. It may help if I define misbehaviour. It is an entirely standard ground for removing a board member of a public authority. It covers two main circumstances: first, misbehaviour in office, such as using a position to confer benefits on family or harassing employees; and, secondly, misbehaviour that might affect the reputation of the body, which would normally involve the commission of a serious criminal offence. If the clause no longer specifies misbehaviour, the Secretary of State would instead have to show that the acts that the person had committed made the person ““unsuitable to perform functions””. However, unsuitability is probably a more difficult test to prove, as the Secretary of State would have to limit her considerations to the effect that the person’s actions would have on his or her suitability to remain a member. She would therefore be unable to take account of the reputational risk to the regulator of keeping the person as a member. That might be acceptable for criminal offences involving dishonesty, as it is reasonable in these cases to conclude that a person who is dishonest is not suitable to be a member of a public sector body. However, for other criminal offences or other serious misbehaviour, it is less clear that the unsuitability test would be satisfied. The wording should therefore stay as it is. Amendment No. 104AB seeks to change the wording of Clause 92(b) by replacing the word ““directs”” with ““permits””. The clause requires members or employees of the regulator to withdraw from performing a function where they have a conflict of interest, unless the regulator directs otherwise. The person is therefore automatically disbarred from that function unless the regulator directs that he can be involved; in other words, if the regulator permits him to be involved. The regulator is directing that the person is not disbarred from performing the function; he is not directing that the person must perform the function. It would therefore make no difference if ““permits”” were to replace ““directs””. The two verbs have the same meaning in this context, so the amendment would have no effect. Amendment No. 104AC seeks to change the wording of Clause 91(2) from: "““A committee or sub-committee may include non-members (provided that it includes at least one member)””," to, ““A committee or sub-committee may include non-members (provided that it shall not be quorate unless a majority of those present are members)””. The regulator has the power to set up committees and sub-committees. It can delegate authority over those committees to a member or an employee to exercise a function, and it needs to be able to do this for the committee to function. Clause 89(1) permits the regulator to determine its own procedure, including provision for a quorum. The effect of the amendment would be that more than half the persons present on every committee and sub-committee would have to be members of the regulator—that is, they must be on the board—or they cannot legally take decisions. We take the view that there should be representation from the membership on each and every committee and sub-committee. That makes sense and ensures co-ordination and communication. It is a safeguard to ensure that there is awareness of the board’s policies on each committee. However, to have a majority of members is simply not practical and decreases the flexibility and, ultimately, the inclusiveness of the regulator’s work. Those are our reasons for opposing these amendments. The noble Baroness referred to an amendment that she did not move. I shall break with convention and refer to it. As regards the user panel, we already have measures in place to ensure that tenants are involved through tenant members of the board. As I explained, we seek to recruit those who might be involved in a sub-committee of the type envisaged. The National Tenant Voice will engage frequently at a high level with the regulator. The user panel point is already covered. I hope that the noble Viscount will feel able to withdraw the amendment.