Housing and Regeneration Bill

Public Bill Committee, 13 December 2007.

Further written evidence to be reported to the House

Joe Benton (Labour, Bootle)

Order. Before we begin, I ask everyone in the room to ensure that their mobile phones are switched off. Would the witnesses like to say a few words of introduction?

Joe Benton (Labour, Bootle)

Ms Gordon, do you have anything to add to that?

Alistair Burt (Conservative, North East Bedfordshire)

I appreciate what you have said in fleshing out your memorandum. I think that you will be pleased with an amendment that we have already tabled, which mentions community land trusts. We might explore that with the Minister this afternoon to see whether is interested in helping with that amendment.

There has been a lot of focus on urban building, and I was interested in what you said about the provision of housing in rural areas, but of course that always raises more concern about land take and so on. Do you think that there is any way in which those two important concerns can be reconciled through the Bill? Will the Bill help to deal with the problems of green belt pressure while meeting the need for affordable housing in rural areas, or is there something in particular that you would like to see inserted that would enable those two issues not to conflict but to deliver what people want?

Alistair Burt (Conservative, North East Bedfordshire)

How do you feel about that? District councils are often concerned about the green belt, because democratic pressure is exerted by elected councillors. There is therefore concern, particularly in rural areas, that if local planning authorities lose their powers to another body, it will become much easier for decisions to be taken which may damage the environment. The agency could make such decisions on the basis that not enough houses were being built in an area, so the local democratically elected planning authority could be ridden over roughshod. Is that a concern of yours?

Alistair Burt (Conservative, North East Bedfordshire)

To follow up that point, do you share the concerns about design? Do you think that design might be usefully included as one of the objectives of the agency?

Angela Smith (Labour, Sheffield, Hillsborough)

I want to ask about an extra element. There is a balance between using brownfield sites and pressures on the green belt. Given the current debates about the use of flood plains for building, the environment is becoming an increasingly important factor in planning decisions. Do you not see that this could be a further complication of the work of the HCA? Do you see the need for the HCA to be required by the Bill to work closely with the Environment Agency?

Angela Smith (Labour, Sheffield, Hillsborough)

In the area that I represent we have steep-sided valleys so we build either on the brownfield sites on the valley floor or on the open spaces in the green belt on the tops of the valleys because the sides are more or less built-up. Those are difficult choices. Although it should work closely with the Environment Agency, is it not important that that is with a view to finding design solutions to enable us to build on flood plains, especially when the site is on previous brownfield land?

Iain Wright (Labour, Hartlepool)

May I take you back to a line of questioning that Alistair Burt was pursuing, about the selling of public land at less than best consideration? Clause 10 of the Bill states that that can be achieved through the consent of the Secretary of State. Given the need to balance the safeguarding of public funds with the regeneration of communities and the availability of homes, do you think that that clause helps that balance? It provides democratic accountability and parliamentary accountability.

Iain Wright (Labour, Hartlepool)

To push that further, let us suppose that a scheme is potentially available, but a private developer says, “In terms of the value of land, I cannot make the numbers stack up.” If the price of the development was lowered, the developer would be able to consider a range of affordable and mixed housing. Surely that goes back to what the Secretary of State said—that could be beneficial for the wider community and for regeneration purposes, although it means losing the maximum potential for public money. Do you not think that it is right and proper that the Secretary of State has that focus on accountability and provides that approval?

Lyn Brown (Labour, West Ham)

What is your definition of sustainability? You have talked about sustainable communities a couple of times, and it would be interesting to know your view.

Lyn Brown (Labour, West Ham)

I will go on to the second point that you raised that interested me, and try to link it to the first one. You said that you felt that in the development in the Lea Valley, there was no need to encroach on the urban footprint. You think that there are designs that could enable that to happen. Could you talk a little about those designs? Are we talking about high rise and high density?

Lyn Brown (Labour, West Ham)

For me, when we talk about sustainable communities, we are talking about a living environment. That includes the environment, but we are talking about a living environment. I have some problems with things that I have heard and I would be happy if you could put me right and tell me that I am wrong. In London, there is a population density of 45.6 people per hectare. In my constituency in east London, according to the 2006 population estimates, we are looking at 72.4 people per hectare. At 45.6 people per hectare, London is already the third most populated part of Europe. The city is huge and very densely populated. Currently, 15 per cent. of England’s population lives on less than 1 per cent. of the land.

For me, if we are talking about a higher density still, we are talking about people living in very crowded conditions. Frankly, that does not seem to be sustainable because people need space, even if they live in London. I am hoping to see the Lea valley developed in such a way that it will take some of the pressure off the city and provide people with a good quality of life elsewhere.

Grant Shapps (Conservative, Welwyn Hatfield)

On that point, I think that Kensington and Chelsea is the most densely populated area in the country.

Lyn Brown (Labour, West Ham)

It is also very rich.

Grant Shapps (Conservative, Welwyn Hatfield)

Yes, but it is interesting to see that sometimes density is desirable, and at other times is not. I want to lead you back to a question that you skipped over. The HCA is taking on considerable powers, not least because it is combining the powers of English Partnerships and the Housing Corporation and adding in a few more powers besides. Your direction of argument seems to be one of localism. You are concerned that the power that local authorities have at the moment might get trampled over. However, do you think—as I am sure the Government must—that in order to get this large number of additional homes built, some agency powers are required, or has the Bill just got this wrong? Which direction do you go in?

Grant Shapps (Conservative, Welwyn Hatfield)

What I am driving at is a characterisation of the CPRE’s position. You seem to be saying, “Yes, we need more homes,” but as an organisation, you believe that those homes can be largely built on brownfield sites and that the powers of the HCA may be too overwhelming. If that characterisation of your position is correct, what, in your view, would be the safeguard against insufficient housing being built? The whole thing could just seize up, some would argue, if there is not pressure from above. What do you think the mechanisms should be to ensure that that does not happen?

Nick Raynsford (Labour, Greenwich and Woolwich)

You have just made a remarkable comment. You have said that you expect less housing output from the private sector over the coming decade than there has been over the past decade. Do you really believe that, because it means that the whole Government objective of increasing output to 240,000 new homes a year is unachievable? It also means that what the house building industry is saying is wrong. I have taken evidence, in a different context, from a major house builder who believes that it is possible to achieve that level and that the current downturn will be only short term. Are you saying that you think that the house builders and the Government are wrong?

Nick Raynsford (Labour, Greenwich and Woolwich)

Given the shortages, and the widespread acceptance that we have underprovided significantly in recent years, are you seriously suggesting that there will not be an upturn in private housing provision over the next decade? What evidence do you have? Is it just a hunch, or do you have economic evidence, which is a different thing?

Nick Raynsford (Labour, Greenwich and Woolwich)

In the short term?

Nick Raynsford (Labour, Greenwich and Woolwich)

Not 10 years.

Nick Raynsford (Labour, Greenwich and Woolwich)

May we turn to a different question, because time is short? You put a strong emphasis on planning powers being

“exercised by democratically-elected local planning authorities which take account of public consultation.”

I am taking words from your written submission, which you have reinforced with your verbal evidence. Let me tell you a story. Five years ago, on a brownfield site in my constituency which, as you know, is in the inner city, a developer proposed an infill housing scheme for 130 new homes, entirely in conformity with the London plan. However, there was a strong local protest. People did not want to have new houses built outside their front doors. As a result of that protest, which produced more letters and e-mails of protest than the Iraq war—that is an indication of the extent of the community concern—the local authority overrode the officer’s recommendation to grant planning consent and refused it. Was that right?

Joe Benton (Labour, Bootle)

Order. Sadly we have run out of time. Perhaps you would like to continue your comments with Nick Raynsford at some later stage. On behalf of the Committee I thank you, Mr. Sinden, and Ms Gordon for attending and for your contribution this morning.

Good morning, gentlemen. Thank you for coming. Would you like to give an introduction?

Nick Raynsford (Labour, Greenwich and Woolwich)

I have already given a general declaration of interest, but I should make it clear that some years ago, when I was working as a housing consultant before I became a Member of this House in my present constituency, I sold the business that I then ran to a company that was then controlled by our two witnesses. I do not think any current interest is involved at all—it was 15 years ago—but it is right that that interest is made clear before I ask any questions.

I want to ask for a comment on the lengthy time it has so far taken and is likely to take to bring the Homes and Communities Agency into operation, on the basis of the stated intention to bring it into operation by April 2009. That is a long time scale, which would not apply in the case of a merger in the private sector, and it must pose certain challenges to delivery. Will either Mr. Ashby or Mr. Joseph comment on that and on the measures that they would like to see taken to minimise the problems that flow from the protracted process of merging English Partnerships and the Housing Corporation and bringing the new HCA into existence?

Joe Benton (Labour, Bootle)

Order. I am sorry to interrupt, Mr. Joseph, but can I ask you to speak up?

Nick Raynsford (Labour, Greenwich and Woolwich)

Another element of uncertainty that has been voiced is whether the new regulatory powers might affect the classification of housing associations as non-public sector bodies. That has been voiced by, among others, the National Housing Federation. Do you have any observations on that?

Nick Raynsford (Labour, Greenwich and Woolwich)

You have so far in your evidence highlighted various areas where uncertainty or delay may be damaging to the delivery of the programme and where an element of risk and uncertainty could be very problematic. Have you any thoughts about practical steps that can be taken to minimise the period of uncertainty and to bring greater clarity to areas that are currently open to different interpretations?

Nick Raynsford (Labour, Greenwich and Woolwich)

You have highlighted a tension between different aspects of the business and the emphasis that is given to them. Might there be a lesson from history that points in slightly the opposite direction to the one that you have suggested? It is arguable that, for a period of time—certainly in the 1960s and 1970s, local authorities gave more attention to development than to management and maintenance of their stock, and that some of the problems that we have inherited in lack of good management and maintenance result from that. The outcome has been a terrible legacy. Is there a risk, as housing associations get larger and as attention focuses increasingly on a small number of them doing a lot of development, that exactly the same culture will develop, whereby development is perceived as the attractive and exciting part of the business, and management and maintenance are relegated?

Andrew Love (Labour, Edmonton)

May I pursue what I think was going to be the next train of thought? We have seen a lot of amalgamations take place involving housing associations. Certainly the developing housing associations are getting much larger and, in a sense, much more distant from the tenant down on the ground floor. That process is likely to continue with the new HCA and yet at the same time Oftenant will say to the HCA, “No, no, you need to have a priority for management and maintenance”. Is there a tension there and, if so, should we be examining how we can ensure that that tension is not as taut as it might turn out to be?

Andrew Love (Labour, Edmonton)

Should there be a role for Oftenant to comment on that process of amalgamation?

Andrew Love (Labour, Edmonton)

Finally, there is a drive for housing associations to move into market housing, which will become an increasing part of their activities. Should the regulator be able to comment that perhaps the focus of the organisation is changing to such an extent that its requirements under the regulator are not being looked after?

Iain Wright (Labour, Hartlepool)

May I take you back to the regulatory regime, the risk of double or triple regulation and the role of the Audit Commission? My feeling about the proposed regulatory regime is very clear: the Audit Commission will continue to have a role, and the regulator will commission work for the Audit Commission, but there will be no routine inspections, which will be risk-based and based upon a particular organisation or area where residents have raised concerns. Is that not well understood? Have the Government been lacking in articulating that clearly? What else should we do to advance what I think is a very clear line?

Iain Wright (Labour, Hartlepool)

Mr. Benton, may I take a separate line of questioning?

Joe Benton (Labour, Bootle)

Yes.

Iain Wright (Labour, Hartlepool)

On Tuesday we took evidence from the Council of Mortgage Lenders, which mentioned similar things to you in terms of more onerous requirements as a result of Basel II. It was probably more risk-averse and timid than perhaps it should be, and I want to press you on the points that you raised earlier. Given that housing is at the top of the political agenda, there is a commitment for 3 million new homes with a massive role for housing associations. For lenders in a risky and turbulent financial market, that would be a sure-fire bet. Are you seriously telling the Committee that because of increased risks and reduced margins lenders may take a commercial decision to pull out of lending to housing associations for building?

Iain Wright (Labour, Hartlepool)

I take your point, but even in the context of virtually zero risk—there has been no default over the past 20 years or so—and the feeling that margins have been squeezed, this is ultimately virtually risk-free investment.

Nick Raynsford (Labour, Greenwich and Woolwich)

Can I press you on this? We have heard two bits of evidence that seem to go in opposite directions. First, we have heard that, recently, larger associations have been getting better margins, presumably because lenders feel more confident in them.

Secondly, we have heard about the risk that the existing regulatory regime may find it more difficult to cope if larger associations get into difficulty. There is no evidence whatsoever that the existing regulatory regime cannot work at the moment. The Ujima situation over the past few weeks is a classic illustration of where it appears to have worked rather well so far—although it is, perhaps, premature to say that—to avert a problem. If there really were a worry that the risk might be greater with associations getting bigger, surely lenders would not be offering them better margins than smaller associations.

Nick Raynsford (Labour, Greenwich and Woolwich)

That is despite the very good track record of the regulatory regime to date and despite the fact that problems in the sub-prime market are not part of the problem for your sector.

Nick Raynsford (Labour, Greenwich and Woolwich)

And, of course, the situation is not resolved yet.

Andrew Love (Labour, Edmonton)

There is a procedural point that I am anxious to get your view on. We discussed the issue of the tenants’ right to manage with the Council of Mortgage Lenders, and there was some concern on the part of the lenders about whether tenant management was an appropriate way to organise the affairs of a housing association. On balance, the lenders said that you need to deal with every case on its merits rather than taking an in-principle decision. How do you view that?

Andrew Love (Labour, Edmonton)

I want to pursue your point about the role of the lender. I remember when large-scale voluntary transfer was going through. The lenders kept knocking on the door saying, “Don’t bring us in at the end of this process. Bring us in at the beginning.” Is there a role at the beginning of a process where tenants might want to express their right to manage, for bringing a lender in so that they are reassured all of the way through the process that it is viable?

Joe Benton (Labour, Bootle)

We have no further questions, so I would like to thank you, on behalf of the Committee, for your attendance this morning. Feel free to add anything further.

Joe Benton (Labour, Bootle)

Thank you for that, I am sure that that comment has been noted, and thank you again for giving evidence.

Further consideration adjourned.—[Liz Blackman.]

Roger Gale (Conservative, North Thanet)

Order. For the benefit of those beyond the Bar and outside the Committee Room, I need to set down the ground rules again. First, welcome and thank you for joining us this afternoon. Slightly discourteously, we remain seated, because if we do not, we are off the microphones and not only Hansard but those listening on the webcast cannot hear us, so if you would be kind enough to remain seated, as I am, that would be helpful. Secondly, owing to the programme motion, by which we are bound, the evidence session has to finish at 1.45 pm—mid-sentence or no. That may seem extraordinarily rude—it probably is—but that is the way it works.

We welcome this afternoon Adam Sampson, the chief executive of Shelter, and Caroline Davey, deputy director of community policy and campaigns at Shelter. The Chairman does not normally involve himself in the proceedings, but I shall ask whether either of you would like to make a brief—I emphasise brief—opening statement before we go into the line of questioning from our parliamentary colleagues. The Floor is yours.

Andrew George (Liberal Democrat, St Ives)

That is a very good entrÃ(c)e to my question. Given that we have a decent amount of time—although looking at it from the Opposition perspective, not enough—in which to bring forward constructive amendments, and given that you have said that the Bill could be strengthened in several areas, what would be the top two on your wish list of changes either to add to or to subtract from the Bill?

Andrew George (Liberal Democrat, St Ives)

You have said that the announcement of a review into the private rented sector was sufficient for you to believe that it would not be necessary to amend the Bill to bring the private sector within the proposed regulations for registered social landlords. Is that sustainable in the long run, given the amount of casework that Shelter deals with, especially in respect of the private rented sector? Do you accept that, provided that it does not scare off the private rented sector and is proportionate and appropriate, there is scope for the application of some of the regulations to the private sector?

Lyn Brown (Labour, West Ham)

Was it Shelter that advocated placing good private rented landlords in a different tax framework, which you felt might offer some incentives?

George Young (Conservative, North West Hampshire)

A quick supplementary question, just to clarify where Shelter is coming from on the regulation of the private rented sector. Are you arguing for controlled rents and security of tenure?

Roger Gale (Conservative, North Thanet)

Order. Mr. George still has the driving seat, but I assume that all the Members who are indicating that they wish to contribute are pursuing the same line of questioning. If not, please wait.

Andrew Love (Labour, Edmonton)

There was disappointment about the narrow definition of houses in multiple occupation in the Housing Act 2004. Is that a matter that you would like to be taken up in the Bill?

Margaret Moran (Labour, Luton South)

You will be aware that the report of the Law Commission on tenancy conditions addresses a long-standing issue. Do you see any scope in the Bill for examining mechanisms that might enable us to move forward on that? Is it something that you will be pursuing?

Andrew Slaughter (Labour, Ealing, Acton and Shepherd's Bush)

I am concerned by what you have said. I was not going to ask a question—I normally agree with what you say, Mr. Sampson—but you have just said that you believe that the two types of tenure, public housing and private rented housing, should come closer together. There have been bits of nibbling away at security of tenure in the public and RSL sector, and there are rumours, including in the context of the Bill, that that may continue. Could you make clear Shelter’s position on that? I hope that it is that you support secure tenancies and assured tenancies, in so far as they give that level of protection.

Roger Gale (Conservative, North Thanet)

Order. Just before you reply, I ask Members to bear in mind that these microphones are not always quite as directional as they might be. It would help Hansard if you could speak up just a little.

Andrew Slaughter (Labour, Ealing, Acton and Shepherd's Bush)

So, when you say “move together”, you mean private rented moving further towards—

Roger Gale (Conservative, North Thanet)

Ms Davey, you have been very patient. Is there anything that you would like to add before Mr. George picks up another point that was raised in Mr. Sampson’s opening remarks?

Andrew George (Liberal Democrat, St Ives)

One further point that you raised in your opening remarks was that there should be a restriction on the discounts available through the right-to-buy mechanism. That is something that I would support. If that were to happen, there is still a need for the development of an intermediate market. Has Shelter taken a view on the need to create, invest and enable an intermediate market? Is there any mechanism within the Bill to strengthen that opportunity, as an alternative to bringing social housing into the private sector in the way that the right to buy allows?

Grant Shapps (Conservative, Welwyn Hatfield)

Clause 69 attempts to define low-cost home ownership, and it is a confusing clause. The Minister has already hinted that it may be amended. The concern is that the definitions might introduce a means test into the process. Is that concern shared by Shelter?

Grant Shapps (Conservative, Welwyn Hatfield)

Both. Low-cost home ownership is defined in clause 69, but there is also wider concern in the Bill about whether there is an attempt to redefine access to social housing, and what the difference is between social and affordable housing.

Grant Shapps (Conservative, Welwyn Hatfield)

Are you concerned that the Bill may inadvertently or otherwise try to redefine different types of social and affordable housing? Some groups raised that concern on First Reading. Their worry was that the housing market has only just got used to the definitions of social housing and affordable housing. Mixing up the two definitions could create complications in the field. Does that worry you?

Nick Raynsford (Labour, Greenwich and Woolwich)

I want to take a slightly wider look at the whole question of the intermediate market and low-cost home ownership. You have rightly highlighted the problems facing people who want access to social housing, the shortages and the long waiting lists. You have also highlighted the extent to which people who might like to buy are unable to do so at the moment because of affordability issues. So there is potentially a huge demand for the intermediate market. Why, in your experience, have all the various models that have been tried over the past 20 years—the different low-cost home ownership initiatives—failed to produce something that is popular, successful and taken up on the scale that you might expect, given the demand?

Nick Raynsford (Labour, Greenwich and Woolwich)

What is to be done to remedy that?

Nick Raynsford (Labour, Greenwich and Woolwich)

Except that the Government introduced the home buy scheme with exactly the objective of simplifying the system and having a single point of sale, but take-up has been derisory.

Paul Holmes (Liberal Democrat, Chesterfield)

Returning to clauses 67 to 69 and the definition of low-cost housing to buy and low-cost housing to rent, many organisations have expressed concern. The National Housing Federation has suggested that if you change the definition of low-cost rental in clause 68 from

“occupied by people who cannot afford to buy or rent at market rate”

to “let to” such people, it would still allow the means-testing of those who should have access to such property, but it would rule out means-testing people once they are in the property. You could not move them on, because their living standards improve. The Minister wrote to everyone who spoke on Second Reading to say that that was not the intention. However, many people have pointed out that, if it is there in statute, someone in the future could use it in that way, even if that is not intended by current Ministers. Do you not see any potential problem in the wording as it is drafted?

Paul Holmes (Liberal Democrat, Chesterfield)

The background, in the last few months and the early part of this year, is that a think tank loosely associated with one party and an internal policy review associated with another party have come up with arguments that we should, indeed, be moving be people out of rented social housing once their income reaches a certain level.

Iain Wright (Labour, Hartlepool)

To take up the issue raised by Grant Shapps, I am concerned that people would misinterpret that as means testing for entry into social housing. Crucially, as Paul Holmes pointed out, if someone got beyond a certain level of social income, they could be kicked out of social housing, but that is certainly not the Government’s intention. As has been mentioned, I have written to hon. Members who contributed on Second Reading. I am very much minded to table amendments to clarify this matter. I am reassured by your legal advice, but I would welcome any further advice that you can provide as to how we can tighten the provision.

Clause 67(2) states that social housing which is classified as social housing now will remain as such. That is very important. I think that clause 71(2) will require amendment, as it covers social housing provided for

“the needs of a group whose needs are not adequately served by the commercial housing market”,

even if they could afford a market rent. Hon. Members could mention more, but three groups spring to mind immediately: older people, people with disabilities with specific needs, and people with larger families—we have already talked about overcrowding. I am minded to table amendments to avoid any doubt about whom the provision covers. Any help or suggestions that you can provide will be most welcome.

Iain Wright (Labour, Hartlepool)

I will make two points, the first of which I mentioned the first on Second Reading. I am concerned that rationing takes place because of the relatively low supply of social housing. That takes us back to the central point of the Bill, which is that we need more homes and more social houses. That is absolutely essential.

My second point has been raised by Mr. Sampson. To promote mixed, vital, sustainable communities as much as possible, we need people with higher incomes in social housing. It happened in the 1950s and ’60s. Mixed tenure is very important in regenerating and sustaining communities.

Paul Holmes (Liberal Democrat, Chesterfield)

I want to pick up that point. The definition to which you refer would deal with entry to low-cost rent, and there is de facto rationing as a result of shortages. However, that does not deal with the threat to move people out once their income has increased.

George Young (Conservative, North West Hampshire)

I would like to press you a little further on security of tenure, which has been raised several times. Nobody wants to deprive people of their tenure because their circumstances have changed but, in cases where somebody’s circumstances have improved, would Shelter have anything against bringing to their attention alternative means of moving out, to free up accommodation for those who are on the waiting list and need it?

Andrew Slaughter (Labour, Ealing, Acton and Shepherd's Bush)

We are getting a useful clarification on the matter—I am not entirely sure, however, about the reference that Mr. Holmes made to Conservative party policy review in the summer—so that everybody is on all fours regarding security of tenure, permanency and the ability to remain.

I agree entirely with what you said about communities and ensuring that people are not going to be without social housing. Nevertheless, people do move about, and the right to buy has perversely destroyed some of those mixed communities and created a great shortage of affordable housing, so dealing with rationing is an even greater priority. Is Shelter seriously saying, even under the Bill, the limited social housing that is available should be spread across income bands, rather than prioritised for allocation to those who are most in need?

Grant Shapps (Conservative, Welwyn Hatfield)

I could not hear everything that Andy Slaughter said. He made a reference to Conservative party policy on fixed tenure from the summer, and I am not clear what it was about.

Roger Gale (Conservative, North Thanet)

Order. Is this related to our discussion?

Grant Shapps (Conservative, Welwyn Hatfield)

Partly, because I cannot hear the whole conversation, which is a matter for the Chair.

On the issue of tenure and beyond, what is the balance for Shelter? Clearly, there is a conflict—you alluded to it—between security of tenure and enabling those in housing stock to be sufficiently mobile to keep the social housing system working. Could you talk us through that a bit more?

Angela Smith (Labour, Sheffield, Hillsborough)

I want to challenge the usual understanding of housing needs. The conventional use of the term “homelessness” applied by local authorities relates to those in the direst need. Divorcees, particularly fathers, often require access to their children and a place for them to come and stay. Do you agree that if such a person were to have their house repossessed—they may have lost their job or had debt problems, for example—they too would be in serious need and could, in a more liberal society, be classed as homeless?

Roger Gale (Conservative, North Thanet)

That was a big question, but we need a brief answer, I am afraid, Mr. Sampson.

Angela Smith (Labour, Sheffield, Hillsborough)

That could help to create mixed communities as well.

Roger Gale (Conservative, North Thanet)

Thank you very much for joining us, Mr. Sampson and Miss Davey. The Hansard report of these proceedings will be available within a couple of days. If, having read it, you wish to add anything, please feel free to put it in writing. The Committee will be most pleased to hear from you further.

George Young (Conservative, North West Hampshire)

On a point of order, Mr. Gale. The witnesses referred twice to a speech that the Minister for Housing made yesterday, which was obviously important. Could Committee Members have a copy of it?

Roger Gale (Conservative, North Thanet)

Order. That issue is not a matter for the Chair. It is open to the Under-Secretary to make any papers available to the Committee that he believes are relevant.

Iain Wright (Labour, Hartlepool)

Further to that point of order, Mr. Gale. May I suggest that the Minister for Housing, who is to give evidence to the Committee in about three quarters of an hour, could, with your permission, make reference to the speech as part of her opening address? We would then provide copies of the speech.

Roger Gale (Conservative, North Thanet)

That would be fine, if we had not already briefed the Minister that she will not be invited to make an opening remark. However, I am sure that she will find a way of dealing with the matter.

Good afternoon, Lord Best. Thank you for joining us. We have until 2.30 pm, when the knife falls, discourteously or otherwise. I invite you to make any opening remarks that you wish to make before I invite members of the Committee to put questions to you.

Roger Gale (Conservative, North Thanet)

Please feel free to do so, but if you wish to make some brief opening remarks, we would be pleased to hear them.

Lyn Brown (Labour, West Ham)

Do you think that there is anything missing from the Bill? Are there any big missed opportunities that you think could be considered at this late stage?

Alistair Burt (Conservative, North East Bedfordshire)

May I take you back to your opening statement, in which you said that you began as a sceptic about the concept of the agency because of the difficulties of disruption, but had been won over? You may still remain a sceptic in relation to delivery because the record of the past 10 years has been pretty woeful. You painted a picture of a really rosy future in which everything was somehow going to come right under the new agency. What, in particular, gives you the confidence that this new vehicle can deliver after 10 years of failure?

Alistair Burt (Conservative, North East Bedfordshire)

Interestingly, you echo some of the comments made this morning by the representatives of the Campaign to Protect Rural England, who fell into a discussion with Nick Raynsford about whether those targets could be delivered. The homes have to be built and the house builders are not going to do it because of a downturn in the market. If everything is getting tighter, with the best will in the world, it might not be delivered, whatever an agency says or whatever the latest 10-year plan for housing is. Just because the agency has been created and the Government say what they will do, should there really be any confidence that that will happen, because many other things will affect the delivery?

Andrew George (Liberal Democrat, St Ives)

In your comments to the Communities and Local Government Committee, you expressed concern about the quality of the housing that might be provided under this type of regulation. Let us suppose that you were to hit the 3 million target. Under clause 35, the HCA’s duties are to ensure that the recipient of financial subsidy is the landlord of the housing provided. There is no question about quality and standards. How can the Bill be strengthened to ensure that it does not result in a driving down of housing standards and quality for those who are desperate for accommodation, but not so desperate that they should receive substandard accommodation?

Andrew George (Liberal Democrat, St Ives)

If some developments are provided through the quota scheme—with private developers allowing a proportion of the properties to be made available to RSLs—rather than through exception sites for which we can insist on 100 per cent. and the social landlord is engaged from day one, those properties will be the smaller and less acceptable, or those built on the edge of a busy highway and the swampy bit at the bottom of the site that private owners would not want. I accept that this is blurring the planning and the housing provision side of government, but do you not think that there is a need for stronger regulation in the Bill to ensure that that is not one of the outcomes and that we do not end up with ticky-tacky boxes in the worst sites on the edge of developments?

Angela Smith (Labour, Sheffield, Hillsborough)

Having been involved in a process in which the housing association and the local authority came first, I completely endorse what you have just said.

The context of this discussion is our belief that we still have underlying housing demand that will effectively mean that delivery of the new housing will be a top priority, despite any problems in the next two years. First, do you not think that land constraint has been a significant factor in our inability to deliver large numbers of new housing units so far, and that the new requirement on local authorities to identify land supply is a useful tool? Secondly, regarding retirement, would it not be useful to develop a new culture in this country whereby older people see moving back into the rented sector from home ownership as a positive move that allows them to enjoy their equity while making more housing available in the market for other people to buy? That would not necessarily mean moving them into sheltered housing or very small one-bedroom flats.

George Young (Conservative, North West Hampshire)

I have two questions, Lord Best. We live at a time when the major political parties are committed to deregulation. You are the second consecutive witness who has asked for more regulation, this time in connection with the private rented sector. Is there not a risk that if we over-regulate the private rented sector, we could go back to where we were 20 or 30 years ago when you and others were advocating reform in order to regenerate and revive the private rented sector, which has resulted in what we have now? Exactly what regulation do you want, and is there not a risk of overdoing it?

George Young (Conservative, North West Hampshire)

What do you want to do to them?

George Young (Conservative, North West Hampshire)

I will need to be persuaded about that. May I ask you about something that you said in evidence a year ago to the Communities and Local Government Committee, when you said that housing associations were “second fiddle”? You have repeated that again today. Surely the local authorities have all the planning powers they need to avoid the scenario that we have heard just now about the housing association being allocated the worst plot on the site? If the local authorities wanted to, they could oblige the house builders to do all the things that you have expressed concern about. They do not need any more powers, because they have got them.

Nick Raynsford (Labour, Greenwich and Woolwich)

May we consider the regulatory regime that the Bill establishes, and in particular, three areas in which concerns have been voiced, not least by previous witnesses? The first is domain regulation. Clearly, Cave’s recommendation was for the introduction of a domain regulator. The Bill does not do so, and previous witnesses, particularly from the local government side and the Chartered Institute of Housing, recognised that there were formidable difficulties in defining a unified regulatory regime. Do you have any thoughts about how that problem can be best overcome?

Nick Raynsford (Labour, Greenwich and Woolwich)

The second concern is the balance between ensuring effective action where necessary to deal with malpractice, and avoiding over-heavy regulatory controls. Concerns have been voiced that the direct line from the Minister, who is able to direct on standards through the regulator to registered social landlords, could compromise RSL independence and might even alter their status under the classification as non-public sector bodies. You are the chair of a major housing association and you have enormous experience of that territory, so do you have any thoughts on those issues?

Alistair Burt (Conservative, North East Bedfordshire)

While we were discussing the availability of rented property and the pressures on housing generally, we touched on an argument about the place of the rented sector in British society and the fact that over the years there has been pressure to see rented property solely as social rented property. That is in contrast to what happens on the continent, where people rent much more often and the supply is much more mixed. Do you have any observations on that situation? Is there anything in the Bill that might change the nature of housing in our society, which is so heavily concentrated on owner occupation, almost to the exclusion of anything else? Is there anything that you think would get back a slightly wider rented sector and allow us to return to the situation 20 or 30 years ago, when a larger proportion of those with higher incomes were prepared to rent?

Alistair Burt (Conservative, North East Bedfordshire)

From a very low base.

Margaret Moran (Labour, Luton South)

Those of us who have been around the housing mafia for a long time remember well the RSL—the housing association, as was—drive to develop in the 1980s. Do you think that there is a danger of that occurring again? Do you think that there is enough emphasis in the Bill, given that it is a housing and regeneration Bill, to ensure that we will end up with sustainable and cohesive communities? You were talking about not talking about units, as we used to, but about people.

Paul Holmes (Liberal Democrat, Chesterfield)

You touched earlier on the Secretary of State, through the regulator, being able to tell RSLs what to do, and that they might therefore become public bodies. What specifically do you think of the idea of the regulator being able to tell housing associations that they should deliver healthy living policies, or get people back into work, or other such things? They are not receiving public money to do that; they are receiving it specifically to build houses.

Roger Gale (Conservative, North Thanet)

Lord Best, we are very grateful for your time. You will have heard us say earlier that the Hansard report of this sitting will be published. If there is written information that you would like us to have, please let us know.

May we have the next witnesses?

Thank you for joining us, ladies and gentlemen. In the interests of speed and efficiency, I will indicate who is now with us: the Minister for Housing, Yvette Cooper; the Under-Secretary of State, who has left us to join the hunted, Iain Wright; Philip Cox, the director of the Homes and Communities Agency implementation team; Peter Ruback, the deputy director of the affordable housing division; and, Anne Kirkman, the deputy director of the decent homes, housing finance and mixed communities division. We are very grateful to you for joining us so, without further ado, we would like you to go into bat and we will bowl the first question at you.

Alistair Burt (Conservative, North East Bedfordshire)

Minister Cooper, when talking about the use of surplus land to build eco-homes and eco-towns, you seem quite confident that 200,000 new homes can be built on surplus public sector land by 2016. That has been said by the Department. If you are confident of that, is there any reason why you have taken compulsory purchase powers for the new agency?

We have had some discussion already about the agency’s powers, and I think that it will be an important issue in our scrutiny of the Bill. Could you just help us out on the issue of why compulsory purchase powers are needed, when there appears to be sufficient surplus land to do the job?

Alistair Burt (Conservative, North East Bedfordshire)

I am sure that you would confess to a little disappointment about the Government’s performance over the past 10 years in delivering the sort of housing record that you would like to have achieved by now. It is quite clear that you are setting quite a lot of store by the agency to deliver a step change in the number of houses to be built. It is one of the great master plans for the future. Why do you think that the agency can deliver when, up to now, the record has been relatively poor?

Alistair Burt (Conservative, North East Bedfordshire)

Sounds good. Do you think in that case that you would follow the recent recommendation of the Public Accounts Committee and give the Thames Gateway to the HCA to run?

Alistair Burt (Conservative, North East Bedfordshire)

Let me press you on that. The capability review of the Department was published in December 2006. It identified the Department’s weakest area as delivery. Bearing in mind the performance of the Department on the Thames Gateway over the past several years, what gives you any confidence that it is any better for the Department still to run it than the agency? Why can you not say that you are going to give it to the agency?

Alistair Burt (Conservative, North East Bedfordshire)

I am grateful for that. Finally, you slightly surprised me with your praise for the performance of the gateway over the past year or so. If that is the case, why has the chief executive been sacked?

Alistair Burt (Conservative, North East Bedfordshire)

I don’t think you will be able to get away with that for long, but thank you for your answer.

Roger Gale (Conservative, North Thanet)

Order.

George Young (Conservative, North West Hampshire)

I wish to raise other issues later, but I would like to follow up what Mr. Burt’s question about compulsory purchase order powers. As you said, the HCA is a merger of English Partnerships on the one hand and the investment wing of the Housing Corporation on the other. English Partnerships has CPO powers and planning powers, but the Housing Corporation does not have either. Do you think that the English Partnerships-type powers—planning and CPO—of the new, merged body will move across to the conventional housing function discharged by the Housing Corporation, or do you think that those powers will continue to be used mainly in relation to scenarios where English Partnerships would intervene? That is a matter of enormous sensitivity to the local authorities. Have I made the question clear?

George Young (Conservative, North West Hampshire)

At the moment, there is no question of CPO powers or planning powers being exercised by the Housing Corporation in relation to a straightforward housing scheme, because it does not have them. When English Partnerships moves in on a major infrastructure scheme, it needs CPO and planning powers. Is it your intention that when the HCA is confronted with what I would regard as a straightforward housing scheme it should use the CPO and planning powers and take them away from the local authority, or would those powers continue to be discharged, as they are at the moment, by the local authority?

George Young (Conservative, North West Hampshire)

But if you want to work in partnership with the local authorities against that background, you would not want to take away their planning powers and vest the planning powers for a particular project in the Homes and Communities Agency.

Nick Raynsford (Labour, Greenwich and Woolwich)

In describing the role of the Homes and Communities Agency on previous occasions, you have emphasised the fact that it would carrying forward the powers of the Housing Corporation to ensure delivery of the Mayor’s strategy in London. It is fine to work in partnership with authorities that want partnership, but there are obvious issues about what happens when individual authorities do not perform, or when the Mayor is concerned that they are not delivering satisfactorily. How do you think that the agency can balance the two separate roles of working in partnership yet being able to intervene when necessary, if there has been a failure to deliver by the local authority?

Andrew George (Liberal Democrat, St Ives)

It may be that I am catching up with others, but I just want to be clear about any residual powers of English Partnerships for the delivery of industrial space, workshops and other things for which it has provided in the past. I also want to be clear about whether those powers will be transferred into the new, amalgamated body. If I am right that the powers will indeed be transferred, then given your statement that the new body is a housing body, to what extent will that mean that either the past powers of English Partnerships to make proposals for industrial infrastructure and workshops will be suppressed by the activities of the new agency or the new agency will be diverted into that territory? To what extent can those functions be balanced?

Andrew George (Liberal Democrat, St Ives)

Does that mean that Ministers will provide indicative budgets and suggested silos on the proportion of the Housing and Communities Agency that is directed towards housing and the proportion that is directed towards other regeneration functions? Or will you leave it entirely to the agency itself to determine those matters?

Andrew George (Liberal Democrat, St Ives)

But if the rationale and drive behind it is the target of building 3 million homes or whatever it happens to be, will that not mean that the economic regeneration roles, the residual roles of English Partnerships, will be very much a second priority and will be lost in the development of the agency?

Margaret Moran (Labour, Luton South)

Forgive me if I am wrong, but looking at the powers of the HCA, I could not see anything relating to an equality duty. Perhaps I have missed it, but if it is not there, why not?

Secondly, there is a great deal of interest in community land trusts. Perhaps you can clarify your definition of them, as there is a momentum to include something along those lines within the Bill. Perhaps you will also clarify your advice on the pilots that are being formulated at the moment.

Grant Shapps (Conservative, Welwyn Hatfield)

I want to turn your attention to targets and local delivery.

It is a fact that the Department has had a problem with delivery, which has been recognised in a variety of reports. In particular, we have already heard about the Thames Gateway, which both the NAO and the PAC criticised for having a lack of direction. Delivery there has been a problem.

The Bill’s approach seems to be to create high targets and expect them to be delivered. Yet the history is not favourable. In the past 10 years, about 146 housing units a year have been delivered, as opposed to 175 in the previous 18 years. We know that fewer social housing units have been delivered every single year in the last 10, than under any of the 18 years before. Am I right in thinking that your analysis is, therefore, that a more powerful central body is required to get this delivery through, which would be the HCA?

Roger Gale (Conservative, North Thanet)

Order. We are here to discuss the Bill. I appreciate that we are in a party political arena and that the witnesses on this occasion are politicians, as are those on the Committee, but it is as well that we all remember that the purpose of these Committees is to seek to improve the legislation through genuine questions and genuine answers. I am not certain that seeking to score party political points, either on the part of the witnesses or of members of the Committee, will serve any useful purpose. Perhaps you could bear that in mind.

Grant Shapps (Conservative, Welwyn Hatfield)

I quite agree, Mr. Gale. The point here is to dig down to what is below the surface. The Bill is, after all, the upshot of the Green Paper, which is specific about the targets. I understand—perhaps you will correct me if I am wrong—that the HCA is the delivery mechanism for the targets that were discussed in the Green Paper.

Grant Shapps (Conservative, Welwyn Hatfield)

If you are clarifying that the Bill is not designed to deliver the targets discussed in the Green Paper, that clarifies a significant area of interest, because many of us feel that the HCA has merit and can do some good things. It would be really interesting to understand the motivation for framing legislation in that way and that is why this sort of witness investigation is a proper process for understanding the direction of the Bill. To what extent do you believe that the failure to deliver the Government housing targets over the past decade has been the result of a lack of central control and central power, in appropriate circumstances, as you see it, to ride roughshod over local communities?

Grant Shapps (Conservative, Welwyn Hatfield)

You said 200,000 houses by 2016, but I understood that it was 240,000.

Grant Shapps (Conservative, Welwyn Hatfield)

At the moment, the Government are missing the house building target that they have had up to this point. For example, we are nowhere near the 200,000 figure.

Grant Shapps (Conservative, Welwyn Hatfield)

No, but 2016 is 240,000, not 200,000.

Grant Shapps (Conservative, Welwyn Hatfield)

Was it your intention as a Government to build fewer houses every single year under this Administration than under the last?

Roger Gale (Conservative, North Thanet)

Order. I am not sure that I will.

Lyn Brown (Labour, West Ham)

My question is not on this point, Mr. Gale.

Roger Gale (Conservative, North Thanet)

Briefly, Mr. Burt, on this point.

Alistair Burt (Conservative, North East Bedfordshire)

The evidence given by Sir Simon Milton of the Local Government Association indicated concern about the whole area of taking planning powers away. He stressed the point that councils want a greater involvement than that on the face of the Bill. Will you publish any guidance about precisely how or when the agency will step in and take powers away? How can we reassure councils that that is not going to be an arbitrary process? How can we deliver for the LGA across the country some certainty about when decisions will be made?

It is one thing for a community to say, “Look, we really do not think that this is right for our area,” and quite another thing for the Mayor of London to say that he does not want affordable housing on the development site at Victoria station, even though the local council does, and for legitimate expressions of local feeling to be overridden. How is that difficult judgment to be made, and are you going to publish some guidelines to let councils know how that will be done?

Alistair Burt (Conservative, North East Bedfordshire)

That is helpful. It gives us a sense that, if those powers were to be used more than rarely, then something would have gone wrong. Is that your intention, Mr. Wright?

Alistair Burt (Conservative, North East Bedfordshire)

So your clear defence is that this is almost last resort stuff, and that if the powers are used extensively to take planning powers away from local planning authorities, something will have gone wrong?

Lyn Brown (Labour, West Ham)

In the evidence sessions and on Second Reading, people have noticed certain omissions in the Bill, such as overcrowding, the review of the private sector, and houses in multiple occupation. Yesterday, when you made your statement, you talked about a review of the private sector and also indicated a review of the statutory overcrowding standards. Does that mean that you will look at multiple occupation in housing, because that would certainly be welcome in my constituency? I also wonder what the time scales might be, and whether there might be Government-backed amendments to the Bill to deal with those issues.

Roger Gale (Conservative, North Thanet)

Order. In her opening remarks, the Minister referred to a speech that she made yesterday. The text of that speech has now been circulated to all members of the Committee and you should find a copy of it in your place. If there is a further Division, I shall terminate the sitting. We are allowed only 15 minutes of injury time, so if there is a Division within the last five or 10 minutes of that time, it would be pointless to bring everyone back again. That is the state of play as I see it. I ask Lyn Brown to pick up the questioning where she left off.

Lyn Brown (Labour, West Ham)

Minister, you were saying that there was no need for primary legislation on the statutory overcrowding standards. I think that you were going on to speak about the private rented sector, and I hope that you will address HMOs and the point raised in these evidence sessions that that debate should be not about property, but about the number of people occupying space.

Lyn Brown (Labour, West Ham)

May I push you on the time scale?

Andrew Love (Labour, Edmonton)

Minister, I am sorry to take you back to your answer to an earlier question about community development trusts—I had hoped to get in before now—but you have said that one of the central problems in making it all stack up is the disposal of land. There has been quite a lot of discussion about what is in the Bill in relation to “best consideration” for land. Has any thought been given to a more appropriate wording, which might help in situations concerning community development trusts and other circumstances within the public sector when “best consideration” might not be the most appropriate way to ensure the development?

Andrew Love (Labour, Edmonton)

A witness from the Chartered Institute of Housing suggested that we consider

“new investment frameworks in which the state can look at investments rather than grants and see a return on its investments over a period of time.”——[Official Report, Housing and Regeneration Public Bill Committee, 11 December 2007; c. 23, Q34.]

It would be an entirely different way of looking at it to consider the investment return rather than saying, “One person’s grant is another person’s cost increase.” Is there any possibility that we could have not only a nuanced shift but a substantial shift in order to try to create the opportunity for greater development?

George Young (Conservative, North West Hampshire)

Can we move on to social mobility? Notwithstanding the devastating attack on my stewardship as Housing Minister, I recognise that much that this Government have done in housing is good. However, one of the failures has been on tenant mobility. In 1997, the Government inherited a national mobility scheme and social tenants, be they local authority or RSL, could move to other parts of the country because somebody was operating a centralised scheme. That collapsed, but this is not the time for a post mortem. The Government had known for some time that that scheme was going to collapse.

I was reading what the Minister said yesterday, and I find it a very disappointing response indeed. Apparently, all we are getting is that the Government will be working with the Housing Corporation, key social landlords and authorities across the country on how they can start to build a national programme to give people better choice about where they can move to. Do you agree that, given where we were four or five years ago, we do not seem to have got anywhere since I secured a debate on the subject a few months ago?

George Young (Conservative, North West Hampshire)

I will not pursue this because we will be able to do so in Committee, but I just make the point that 10 years ago we had a national scheme. By 2010, all we will have is a sub-regional scheme. I regard that as a disappointing step backwards. I think that the Government will have to come up with a better strategy for dealing with tenant mobility than the one that they have at the moment.

Margaret Moran (Labour, Luton South)

I am afraid that we are co-conspirators, having served on the homes board for many a year. What evidence base have you for suggesting that the choice-based lettings scheme, even on a sub-regional level, will do some of the things that are at the heart of the Bill, such as encouraging more employment and employability, sustainable communities, and so on? Where is the evidence base, compared with the home scheme, for example?

Margaret Moran (Labour, Luton South)

No, but mobility is about that.

Andrew George (Liberal Democrat, St Ives)

I want to come back to what is perhaps my obsession with English Partnerships and its industrial workshop role. This is really supplementary to the answers that I received earlier. My experience of English Partnerships from my part of the world is that it develops workshops, particularly in areas where the private sector would not otherwise provide them. Given its clear priority and the budget priority of providing housing and addressing housing concerns, to what extent will this agency be able to provide any kind of attention to economic development issues and workshop development? I appreciate what Mr. Wright said—they were warm words and they were sincerely expressed—but is it possible to set out a notional proportion of the overall budget that will go towards industrial and workshop development in the next few years? Do you have any idea what proportion of the available money will be directed towards activities that are not directly related to housing? Of that money, how much will go towards workshop development?

Andrew George (Liberal Democrat, St Ives)

But would it not be better to separate out those functions and find a more appropriate agency through which they could be delivered, so that this body could establish its primary priority, which is housing? The important work that English Partnerships does in providing workshops in areas where the private sector cannot do so could therefore continue and would not be lost in the overall objectives of the HCA.

Grant Shapps (Conservative, Welwyn Hatfield)

Moving on to another issue, a question that has come up repeatedly is whether the Bill deliberately tries to redefine social housing and affordable housing. For the sake of absolute clarity, I will read the definition in the Bill, because it appears to change the definition that has made sense to the housing industry for the past three or four years. Under the heading “Basic principle”, clause 67(1) states:

“In this Part ‘social housing’ means...low cost rental accommodation”.

That is further defined in clause 68, which says that such accommodation

“is made available for rent...the rent is below the market rate, and...the accommodation is made available in accordance with rules for eligibility designed to ensure that it is occupied by people who cannot afford to buy or rent at market rate.”

So the Bill defines social housing as affordable housing is defined today. Can we clarify whether that is the intention in the Bill or whether it is a drafting error?

Grant Shapps (Conservative, Welwyn Hatfield)

Do you want a bit more clarity on that?

Roger Gale (Conservative, North Thanet)

Order. I think the Minister would like a bit more clarity.

Grant Shapps (Conservative, Welwyn Hatfield)

At the moment, when we talk about social housing, people understand what we are talking about, do they not? If you talk about affordable housing, you are talking about all kinds of housing, including registered social landlords, housing associations and so on. Clauses 67 to 69 appear to redefine all housing as social housing, and that matters, because it would confuse the current understanding. Are you clear? I understand why it is difficult.

Grant Shapps (Conservative, Welwyn Hatfield)

Yes, exactly.

Grant Shapps (Conservative, Welwyn Hatfield)

That is very helpful. So you do not intend to change the definitions?

Andrew Love (Labour, Edmonton)

Martin Cave, in his report, recommended “domain-wide regulation”, yet the Bill suggests a two-year delay for local authorities. When representatives of the Local Government Association came before us, they suggested that the LGA would support immediate regulation under Oftenant, saying that if there is a delay it would prejudice its ability to influence the way in which Oftenant developed. Even more surprisingly, they suggested that some of the onerous regulation that comes through Oftenant would be acceptable to them. Given that they are anxious to be in at the beginning and they do not seem to be concerned about the onerous nature of some of the regulation, would it not be sensible to bring it forward?

Andrew Love (Labour, Edmonton)

Can you provide any reassurance about the concern, with which I have some sympathy, that if the LGA is not in at the beginning, Oftenant may be set in its ways by the time that it comes in? Is there some way of involving it so that it has an influence?

Andrew Love (Labour, Edmonton)

Can I move on—

Roger Gale (Conservative, North Thanet)

Just a minute. Mr. Burt, do you have anything to say on this point?

Alistair Burt (Conservative, North East Bedfordshire)

I just want clarification. We discussed the matter with Iain Wright in the margins of our discussion on domain. He indicated that there would be flexibility, because if progress was made while talking to councils, an amendment could be introduced in the House of Lords rather than in the Commons. Are you saying that, even with the best will in the world, you genuinely do not think that the pace will be sufficient to do that satisfactorily, that you are thinking of separate legislation and that there is no way in which we can include the matter in the Bill, which was what people would have liked?

Andrew Love (Labour, Edmonton)

Can I now turn to—

Roger Gale (Conservative, North Thanet)

Order. I am sorry, I am trying to bring in everybody and our proceedings may be curtailed by a Division.

Andrew Love (Labour, Edmonton)

My question is still about regulation, Mr. Gale.

Previous witnesses have said that the use of the phrase, “the Government will direct Oftenant”, and the possibility that Oftenant will direct registered social landlords, have led to concern about the status of RSLs as independent voluntary bodies, with connected concerns about funding issues. Can you offer some reassurance, or will modest changes be made to clarify the status of RSLs under the new regulatory regime?

Andrew Love (Labour, Edmonton)

Without wishing to appear anti-European, there has been some concern that, in the past, English Partnerships has been caught up in state aid rules and differences of interpretation between Europe and the UK. That is floated just as a throwaway line, but are we sure that, the way it has been framed at the moment, not only the UK authorities but any others that might have a locus on this would agree to the continued independence of the RSLs?

Andrew Love (Labour, Edmonton)

Yes, absolutely. It is a complex matter, but I know that the gap funding that used to exist got caught in state aid rules and nobody could quite understand why there was a difference in the views taken. I am worried that somebody might take a different view, while the UK authorities are satisfied. That might be something that we can tease out later.

Roger Gale (Conservative, North Thanet)

Just before we proceed, so there is no confusion, I am going to extend the sitting until 4.15 pm under Standing Orders, or until a Division if there is one before that. If there is a Division, the knife will fall.

Roger Gale (Conservative, North Thanet)

All right, we have got the message.

Paul Holmes (Liberal Democrat, Chesterfield)

The biggest problem for me with the Bill is not so much what is in it, but the gaping hole of what is not. About 2 million social tenants are with RSLs, and about 2 million to 2.5 million are with councils because they have voted not to stock-transfer. Most of the Bill and the funding for the next three years is about RSLs and operating through them. The Bill seems to say that the housing needs of the 200 authorities that have not stock-transferred are less vital and urgent than those of the others. How do you justify that?

Paul Holmes (Liberal Democrat, Chesterfield)

I will ask about the housing revenue account shortly, but on the private venture companies that you want councils to set up—there are 14 hand-picked experiments—the impact assessment for the Bill states that that will be about 2,500 extra houses.

Paul Holmes (Liberal Democrat, Chesterfield)

Yes.

Paul Holmes (Liberal Democrat, Chesterfield)

Then in terms of the money for the next three years, your written statement yesterday said that £8.4 billion would go to the RSLs, £2.4 billion to the ALMOs—only 60 of 64 authorities that still run their own houses—and the 140 authorities that are directly managed would get a share of less than £2 billion along with the private sector. Clearly the weight of funding and intent is still against the half of the country where people are council tenants and most of the social housing is provided through the council.

Paul Holmes (Liberal Democrat, Chesterfield)

The ALMO refurbishment, therefore, still totally excludes the 140 authorities that are not ALMOs. Are you saying that at the end of next year and the years after that, when we look at the £8.4 billion that has gone to RSLs, we will see that it has been evenly spread across the country and not focused on the areas where the RSLs have most of their housing stock already?

Paul Holmes (Liberal Democrat, Chesterfield)

Well, that is one to watch over the next year or two. Clause 269 of the Bill will give the Secretary of State the power to alter how the HRA works and, as you have said in other statements and on Second Reading, the intention is that there will be some pilots around 2009 to 2011—there are some paper pilots at the moment—and hopefully that would start to roll out around 2010-12. Therefore, there is not much for the next three or four years for the direct management authorities, but a hope of something further down the road.

Let us say that 75 per cent. of directly managed councils are in positive subsidy. That is to say that they are losing rent money to the Government to spend elsewhere, as Chesterfield does. If, after 2011, those experiments have worked, councils can then start to keep their rent money and their right-to-buy money. That, as you have argued every time we have talked about it, would obviously have a big impact on the 25 per cent. of directly managed authorities which are in negative subsidy and which get money from the rest of the councils. What will you do to plug that gap in four year’s time when those pilot studies come into wider use?

George Young (Conservative, North West Hampshire)

Following Mr. Love’s point, have you shown the Office for National Statistics the Bill and asked whether the Bill will keep the housing associations in the private sector? They are the custodians of the rules.

George Young (Conservative, North West Hampshire)

Not half. Finally, when will you appoint the shadow chief executive and the shadow board of the HCA?

Roger Gale (Conservative, North Thanet)

We are heading towards a Division. Minister, I thank you and your team for coming and giving evidence this afternoon. We have not run out of steam, but we have just about run out of time. I thank members of the Committee for their courtesy and attendance, and may I wish all of those whom will we not see before, a happy Christmas.

Further consideration adjourned.—(Liz Blackman.)