Housing and Regeneration Bill

I am partially but not entirely supportive of the amendment. I very much look forward to hearing how the Minister will respond to it. First, empowerment of residents is a fundamental part of what the regulator should be about, and it is tremendously important in how social housing is run in the future. I have had the privilege of being a judge in the gold awards that are given out each year by the Housing Corporation, for the entire time that the corporation has been organising the awards. Last year, the gold award went to those housing associations best at empowering residents. That meant rather than always thinking about the failures and the problems for regulators that housing associations may bring forward, we see the best and we see really good examples of what can be achieved. We saw absolutely wonderful effects, where organisations genuinely and fulsomely engaged their residents in the management of their estates and their affairs. It was a tremendously uplifting experience. The gold award winner that I remember best was Willow Park Housing Trust in Manchester, where the residents were doing brilliant things. What a way of unlocking the potential of citizens to do great things for each other and for the community of which they are a part. Empowerment of residents is a hugely important prize and the regulator, if it can serve to enhance resident empowerment, is a crucial objective in the Bill. I do not know whether one should say, as in the wording of the amendment tabled by the noble Lord, Lord Filkin, that tenants should have the power, "““to change providers in the event of poor management””," or whether that is exactly the way that this is best expressed and followed through. It is putting the onus on the tenants to change provider in the event of poor management. That brings with it a whole series of difficulties and problems that would mostly be avoided if the onus is on the regulator to ensure that there is a change of provider in the event of poor management. The regulator has wider duties than simply to promote the best interests of the consumer. The regulator has to think about the viability of the businesses that are being regulated and the cost to the taxpayer of any decisions that are taken exclusively by consumers. Ofcom, Ofgem, Ofwat, or anything else—or even the Tenant Services Authority—will need to balance the views of a group of possibly many aggrieved residents against the disadvantages of changing their managers at any one point in time. There would be a lot of small print about who would vote, how the decisions would be taken and whether leaseholders living on the same estate would also be engaged. This refers only to the tenants, but we are increasingly thinking in terms of mixed communities, with shared owners and owners as well, and whether the whole community would be part of changing the provider of the facilities. How often would residents be able to change their provider and at what cost? There are cost implications of a change of this kind, not least the costs of VAT, as the noble Earl, Lord Cathcart, said. It may be a ridiculous measure, but VAT exists and even if one managed to achieve a 5 per cent saving on one’s management costs through choosing a different, more efficient, leaner and meaner landlord to do the work, there is a 17.5 per cent charge that rather wipes out the 5 per cent gain because of the VAT rules. It is extremely difficult to change VAT rules, even if one has the high moral ground on the issue. There is the question of making the existing staff redundant and whether they are TUPE’d into the new arrangements. The machinations go quite a long way. In essence, putting an onus on the regulator to intervene where residents made it clear to the regulator that management was poor, and where taking an objective and balanced view the regulator came to the conclusion that poor management required a change of provider, is the best approach. It is worth remembering also that the housing ombudsman exists and is highly effective. I have been well impressed by the ombudsman’s work in picking up some of the pieces where residents are aggrieved. I think that we would need to play in the role of the ombudsman both in advising the regulator and possibly in acting first before one goes to the full measures that removing that provider and substituting a new provider would imply. So I am entirely supportive of greater empowerment of residents, including very much tenants, but I am not absolutely certain of whether the best route is through tenants having the direct opportunity to change providers themselves rather than the regulator having powers and duties to perform in that way.