Housing and Regeneration Bill

These are three forensic amendments. I am not entirely certain that the noble Baroness is going to be satisfied with my response. This is wonderful stuff for lawyers. The ground affected by this amendment—that the registered provider is failing properly to carry out its objects—was an existing power in the Housing Act 1996, which used the same term. Because it has been used so rarely, I do not think that getting rid of the word itself is going to be of much benefit to man or beast. The trigger for ““failing properly”” is a standard phrase, which is also used in the Charities Act. The bar for the use of the power is high; it would obviously be tested in the courts. It has been used by the corporation on rare occasions when the association’s objects have not been addressed or achieved. There is an example, on which I shall not go into in detail but will be delighted to send to the noble Baroness, of when the provision was used. It involved the Railway Street Housing Co-operative, an association of owner-occupiers and tenants in miners’ cottages in Durham. This may bring back to the noble Baroness case law studies from her days as a student, when there were a lot of cases like it. The organisation proved incapable of functioning as an independent, viable and well managed organisation. It was quite an interesting case. However, it is an extremely rare power. It is a consistent form of terminology and, on that basis, we shall have to resist the amendment. The noble Baroness’s other amendment, Amendment No. 108ZBF, is worth addressing briefly as it raises an important issue. It would add a new clause after Clause 167. Clauses 166 to 168 allow the regulator to transfer land held by a housing association that has been wound up, normally to ensure that tenanted social housing and assets that may have been publicly funded are passed to another association. Therefore, the tenants continue to have the benefit of protection and public assets to protect them. That is again an existing Housing Corporation power. The amendment deals with a specific situation. The regulator transfers the land of an association that has been wound up to a second association. The first association has liabilities, which is quite likely if it was wound up for insolvency, and they would normally be met by selling the land. However, because the land is social housing, or there are other good reasons to transfer it, the regulator decides to pay off the liabilities itself rather than sell the land. Clause 166(3) explicitly permits it to do this. This amendment would ensure that the regulator gets its money back by requiring it to take a charge over the land to the value of the amount it has paid. I think that will often be a sensible way forward, and there is nothing preventing the regulator doing that. However, my concern is that it will not always be the best way of dealing with the problem, and this amendment, by requiring the regulator to do that, reduces its flexibility in dealing with complex transactions, which has risks for the assets concerned. For example, the regulator may find it difficult to find a new owner for the land, if that land has liabilities attached. An association that accepted that land would do so despite making a loss, and not every association would be able or willing to do that. It also does not seem entirely fair to attach to the land liabilities that have little to do with it. When making this sort of decision, the regulator will be guided by its objects, which include concern for tenants and public assets, not imposing a burden on public money and concern for the viability of the association taking on the land. That is why we think it important to keep flexibility in the clause. Finally, Amendment No. 108ZBEA, proposed by the noble Lord, Lord Dixon-Smith, restricts the regulator’s power to direct when transferring property to another provider. Clause 166 provides that when a non-profit registered provider is dissolved or wound up and all its liabilities are paid, the question remains of what to do with its remaining assets—that is to say, social housing. That is clearly a decision for the regulator. Clause 166 sets out the regulator’s powers: the properties are either transferred to the regulator or to another registered provider. The regulator’s first aim will always be to find another registered provider to take over the social housing. We think it unlikely that there would be no registered provider willing to take over the social housing but, in that case, the regulator would have to transfer the property to itself. In effect, it would be acting as the social landlord of last resort. That would only ever be a temporary arrangement while the regulator tried to persuade another registered provider to take on the properties. It is clearly not appropriate that the social housing is lost by being sold off to a private landlord. The noble Lord asked whether there would be a conflict of interest. To my knowledge, under those circumstances, there would not be. It is a temporary, last resort provision, so that should not be an issue. The amendment is not helpful because it is necessary to have the regulator as the social landlord of last resort. Otherwise, things would be left in limbo in such cases. I will make sure that I am correct about the conflict of interest point, but I am fairly certain that that would not be the case.