Alistair Burt (Shadow Minister, Communities and Local Government; North East Bedfordshire, Conservative)

I have a couple of questions in relation to the next two clauses. First, will the Minister say in what circumstances the Secretary of State will appoint the HCA to act as agent in the manner described in clause 29?

Secondly, when talking of the HCA’s power as agent of the Secretary of State on matters of regeneration, I wish to raise a particular issue. I understand that the Housing Corporation does not provide finance to schemes in which there is no net increase in affordable housing. In areas that have the potential to increase housing supply and that already have an over-concentration of council housing, making a more mixed community would involve a net loss of council housing. Although it would result in a much more balanced community, which is the desire set out in the Green Paper, such a scheme would not attract financial support.

Will the Minister say whether the HCA might take a more flexible approach? I am talking of a situation in which there was not necessarily a net increase in affordable housing. Would it still be possible for financial assistance to be given to a scheme whose objects were within the terms of the HCA’s remit—within its wider powers over regeneration, rather than simply its powers to act as an agency to deliver more housing units?

How will the HCA use its powers, and will it be more flexible than the current provisions as they affect the Housing Corporation? I should be grateful if the Minister gave us some indication on that.

Robert Syms (Poole, Conservative)

I, too, would like a little clarification on clause 29. I may be wrong, but it seems that the Secretary of State can give the agency a role—for instance, to dispense grants. Does that mean that grants that would now be given directly to local authorities will go to the agency to be dispensed? As someone who spent 14 years in local government, my concern is that it should not be used to get around directly funding local authorities or boroughs.

Iain Wright (Parliamentary Under-Secretary, Department for Communities and Local Government; Hartlepool, Labour)

Let me provide some clarity. Sections 126 to 128 of the Housing Grants, Construction and Regeneration Act 1996 give the Secretary of State the power to give financial assistance in respect of expenditure on activities that contribute to the regeneration or development of an area. In simple terms, that means that the agency can step into the shoes of the Secretary of State and give financial assistance in support of regeneration or development activities in particular areas; it is appointed as an agent by the Secretary of State.

However—I return to this point time and again—the agency must act in accordance with the terms and conditions of its appointment, as set out by the Secretary of State, and crucially it will still need to act within the confines of its objects as stated in clause 2. In practice, the agency will be enabled to administer regeneration funding programmes, which are currently delivered by  the Department for Communities and Local Government. The power will enable the Secretary of State to appoint the Homes and Communities Agency to perform a number of functions that are currently performed by the Department.

On Thursday, we had a debate about the vision of the Department and it providing a strategic role on what is needed in respect of housing and regeneration, with the HCA being one of the delivery agents. Many of the delivery functions currently performed by the Department are being transferred to the agency. We are doing something similar in clause 19 in order to build on that. The Government believe that it is vital that investors have clarity on the arrangements for delivering those commitments, and I hope that we have provided that clarity.

I hope that I have provided some certainty for the hon. Member for North-East Bedfordshire—but he looks slightly confused.

Alistair Burt (Shadow Minister, Communities and Local Government; North East Bedfordshire, Conservative)

I just want an answer on the points about the flexibility of finance and about the Housing Corporation not funding schemes in circumstances in which there is no net increase in affordable housing. Will the new agency take a different view on that?

Iain Wright (Parliamentary Under-Secretary, Department for Communities and Local Government; Hartlepool, Labour)

I am furiously looking for clause 2.

Alistair Burt (Shadow Minister, Communities and Local Government; North East Bedfordshire, Conservative)

Some inspiration is needed.

Iain Wright (Parliamentary Under-Secretary, Department for Communities and Local Government; Hartlepool, Labour)

No; I am fairly happy with the inspiration here, although I could now be contradicted. Clause 2 states that the objects of the HCA are:

“to improve the supply and quality of housing in England...to secure the regeneration or development of land or infrastructure in England...and to support in other ways the creation, regeneration or development of communities in England or their continued well-being.”

Those objects are important, and the hon. Gentleman’s points would satisfy those criteria.

Alistair Burt (Shadow Minister, Communities and Local Government; North East Bedfordshire, Conservative)

May I understand that the Minister is answering “Yes,” and that he does not expect the current restriction operating through the Housing Corporation to continue under the new agency in the specific circumstances that I mentioned? If so, I am happy to hear that. As my point is very specific, I am perfectly content if he wants to write to the Committee. I do not know where his inspiration is leading him at the moment.

Iain Wright (Parliamentary Under-Secretary, Department for Communities and Local Government; Hartlepool, Labour)

I understand that I am intervening on the hon. Gentleman, Mr. Benton. Will he clarify the particular circumstances that he means? He mentioned affordable housing and the housing market renewal area; which particular areas is he concerned about and what would he like me to clarify?

Alistair Burt (Shadow Minister, Communities and Local Government; North East Bedfordshire, Conservative)

My understanding, from an expert who works in the regeneration field, is that the Housing Corporation will not supply finance to a scheme in which the overall end result will be fewer affordable  houses. In some development areas, there is opportunity to expand the housing supply in the round, including more mixed developments—more private housing and home ownership—by taking out some council housing in places where there is an over-concentration, such as on the monolithic-type estates that we are trying to get rid of.

The Government’s Green Paper supports the development of more mixed communities, but money is not available through the Housing Corporation if a point of principle on affordable homes is breached. The thinking is, “There will be fewer affordable homes, so how can we give money to this?” If the Government’s aims and objectives were slightly broader than simply building more homes and units, which is the charge that has been levelled against the agency, and if there were an allowance to supply finance to that sort of scheme if a more balanced community were being created, even though there would be a net loss of affordable homes, would that restriction be lifted?

Iain Wright (Parliamentary Under-Secretary, Department for Communities and Local Government; Hartlepool, Labour)

That helps an awful lot and clarifies the question. The agency’s objects are wider than the Housing Corporation’s, and I do not want to pass judgment regarding the circumstances that the hon. Gentleman mentions. I mentioned the housing market renewal area because I have ministerial responsibility for it, and I have been to your constituency to have a look around, Mr. Benton, and really enjoyed my time there. A relevant consideration might be an over-preponderance of two-up, two-downs and that we need to lower the density. In such circumstances, that would be entirely reasonable. However, the whole objective is to improve the supply and quality of housing in England. I hope that I have reassured the hon. Gentleman.

The housing market renewal area and possible phased and planned demolitions are a good example of how we need to improve the housing stock. That might mean fewer houses in that particular area; in that respect, I agree with the hon. Gentleman. I hope that I have clarified matters.