Clause 233
Housing and Regeneration Bill
6:45 pm

George Young (North West Hampshire, Conservative)

I beg to move amendment No. 100, in clause 233, page 88, line 3, after ‘constitution’, insert

‘provided that the total number of appointees under this section does not exceed one-fourth of the total number of officers, or four persons, whichever is greater’.

This is the other side of the coin of the debate that we have just had. When the regulator removes officers from the board of a housing association, clause 233 deals with his powers to appoint new officers. My amendment seeks to constrain that power, to avoid the regulator, by stealth, effectively taking over the running of a housing association. There is concern in the National Housing Federation that, particularly given subsection (1)(c), the regulator could go on appointing new officers to the housing association until he had, in effect, taken over the provider by appointing a controlling majority to the board. The amendment seeks to prevent that by restricting the number of officers that the regulator can appoint. Clearly, if the regulator has lost confidence in the board as a whole and wants to replace a lot of them, he would use other powers in the Bill and not clause 233, so I am not sure that the amendment is constraining the regulator from intervening if there are causes for concern, but it would allay an anxiety on the part of some of the housing associations if the power of the regulator was capped, as indicated in amendment No. 100.

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

I quite like the amendment. I have a lot of sympathy with its motivations. However, on reflection, it would be difficult to implement while protecting powers that the regulator will need in the most exceptional and difficult cases. In the vast majority of cases, even serious ones, it would not be appropriate for the regulator to make large-scale board appointments. Indeed, as the right hon. Gentleman will know, the Housing Corporation usually appoints only three persons under its existing power, which it states is enough to provide the necessary mix of skills and expertise.

Having said that, there will be circumstances in which it might be necessary for the regulator to appoint more than three board members to safeguard public investment and the interests of tenants. The Housing Corporation has been obliged to use the power on four occasions when a board has resigned en masse. It is  important that the regulator has the powers needed to intervene in such extreme or rare situations without having powers that might be considered excessive in other situations. Although I cannot accept the amendment, I am happy to consider whether it is possible to limit the regulator’s powers to appoint a majority of board members to specific circumstances. The resignation of a board en masse is an obvious example, but there might be other circumstances that we should and could provide for, such as the immediate threat to the viability of the provider.

Andrew George (St Ives, Liberal Democrat)

The Minister mentioned boards resigning en masse. However, would the housing association in question not also be registered with an industrial and provident society or the Charity Commission and would other provisions not come into play to deal with potential dissolution? If a board resigns in such circumstances, would it not be more appropriate for that regulatory authority and those rules to apply, rather than for the regulator to appoint members to the board, particularly if it has a majority stake on the board?

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

I understand the hon. Gentleman’s point. I have mentioned the four occasions where that has happened before. We are trying to avoid a vacuum in governance. In exceptional circumstances, it might be necessary for the new regulator to have that power. As I have said, I am keen to work with the right hon. Member for North-West Hampshire in order to find a way forward. On that basis, I hope that he will withdraw the amendment.

George Young (North West Hampshire, Conservative)

As I have discovered over the past few weeks, the Opposition are in a very weak negotiating position. The Minister has made a generous offer, which I am happy to accept. I beg to ask leave to withdraw the amendment.