Housing Association Transfer Ballots

– in the House of Commons at 2:30 pm on 6th March 2015.

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Motion made, and Question proposed, That this House do now adjourn.—(Greg Hands.)

Photo of Jim Fitzpatrick Jim Fitzpatrick Labour, Poplar and Limehouse 2:33 pm, 6th March 2015

I am grateful for the opportunity to have this debate. I confess that I had hoped to see on the Front Bench the Minister responsible for housing, but it is always a pleasure to see the Deputy Leader of the House. To accommodate him to an extent, he has had sight of the points that I want to make, given that I assume that, as a London MP, he has volunteered to cover for his hon. Friend and given how difficult these occasions are for colleagues outside the capital with commitments to family, friends and constituents.

The key question that I will ask is whether council tenants, who have the right to vote to transfer out of local authority control to housing association control, should also have the right to sack that housing association for poor performance and/or failure to deliver on their promises. I would be grateful to the Minister for any answer to that. I will return to that question several times.

However, first I would like to cover some of the history. In 1997, when Labour came to power, there were some 2 million homes below the decency threshold. Local authorities had difficulty raising capital and addressing the difficulties. Housing associations provided an opportunity to refurbish run-down estates that had lacked investment for years—in some cases, decades. To a certain extent, that is why house building was secondary in the initial years of the Labour Government.

In my constituency of Poplar and Limehouse, there were over 20 ballots to transfer out of local authority control, and the vast majority of those votes were won. There was huge investment and transformation; many blocks, streets and estates got new kitchens, bathrooms, double glazing, central heating, and security, and there was good property management on many estates. In Poplar and Limehouse, there are 15 main housing association providers. I would categorise five of those as excellent to good, five as good to average, and five as average to poor. The key question that I asked the Minister at the beginning, and that many of my constituents are seeking an answer to, is: can poor providers that have failed to deliver be sacked, and can tenants vote for another housing association, or to revert to local authority control?

The principle is straightforward. In any other contract, whether it relates to a service, a purchase, or a business, the person who signed up to the contract can return the goods, implement sanctions, seek compensation or sack the company delivering the goods, just as Members of Parliament can be sacked on 7 May at the general election; voters will determine whether we have delivered for them, as an individual or a member of a political party. There is an interesting comparison with leaseholders.

Those who purchased properties under the right to buy are obliged to contribute to refurbishment. Many of those situations are problematic. Tower Hamlets Homes in my constituency is addressing a number of those types of problems, and we are grateful for that. On leasehold estates, where there is the most private new build in east London, leaseholders have the right to manage their own estate. It is easier done in theory than in practice, but they can have a ballot and sack their property management company, or the company running the estate; it has been done. That prompts the question: if it is okay for private leaseholders to sack their property management company, why is it not right for tenants of registered social landlords to sack their housing association, which fulfils many of the same functions?

The Minister will probably know that Mr Davey and me, ably led by Sir Peter Bottomley, have done quite a bit of work on leasehold reform. I am happy to say that Ministers at the Department for Communities and Local Government have engaged very positively with this. They acknowledge the loopholes for unscrupulous management companies, and we are hopeful that we can make more progress in the months and years ahead to give leaseholders better rights under the law.

The whole issue of redress for housing association tenants not only seems worth examination but demands an answer. I am advised that Councillor Joshua Peck on the London borough of Tower Hamlets Labour group has called a special meeting of the council’s overview and scrutiny committee on Monday 16 March to address serious problems in at least three housing associations, including One Housing Group and Circle Housing. However, it is not clear what powers the local authority has, apart from the power to remove those housing associations from the council’s list of preferred partners. The Minister might be able to give us some clarity on that. I recognise that the Minister present is not the Minister responsible for housing; obviously, I would be very happy to get a written response in due course on any issues that I raise that this Minister cannot respond to.

Do the Government believe that the abolition of the Tenant Services Authority in 2010 was a mistake? The authority was empowered to help tenants, but its abolition seems to have left a void. Are the powers of the Homes and Communities Agency adequate? It seems to be able to issue criticism, but tenants ask what it can actually do. What are the powers of the housing ombudsman? Is that the appropriate body to which to address complaints about weaknesses, mistakes and poor performance of housing associations? Councillor Marc Francis has documented the failures of One Housing Group in particular. There is a history of Government involvement in pressing that organisation not only to up its game, but to accept that it has weaknesses, rather than being in denial about its failure to deliver to tenants who are paying it good money.

Opinion solicited from the university of East London legal advice centre for Councillor Dave Chesterton suggested, somewhat ambiguously, that there is no right to sack poorly performing housing associations. In a nine-page document the School of Business and Law legal advice centre, in response to Councillor Chesterton’s question, stated:

“You therefore seek advice in order to inform the tenants of these estates whether they are entitled to a re-ballot . . . We regret that our research did not lead us to any legal authority to enable us to advise you favourably on the legal question you posed.”

I thank UEL for the research, but the question remains wide open and it lies at the door of the Minister.

The National Housing Federation describes affordable housing as one of the biggest challenges for London. In 2012 in the mayoral election one of the biggest policy differences between Labour and the Conservatives was that Labour proposed that any new developments should be 50% social housing, including social rented, key worker, shared equity and first-time buyers housing. New developments should not be all private. The Conservatives’ policy was that developers and local authorities should be able to negotiate, but basically that the market would decide. I apologise to the Deputy Leader of the House for the fact that I do not know what the Lib Dem policy was. I suspect that it was closer to ours than to that of the Conservatives, but I may be wrong.

What we want is not gated estates or ghettos for rich and poor, although obviously price will make some properties unavailable to many people in society and there will always be some division. We do not want artificial barriers between rich and poor, or people being forced to leave their communities and families. We want mixed communities. The Homes for Britain campaign states that housing is one of the biggest issues facing not only London, but Britain. The campaign, supported by many of my excellent housing associations in Poplar and Limehouse, including Poplar Housing and Regeneration Community Association, Tower Hamlets Community Housing and Eastend Homes, acknowledges that all the political parties agree that we need to build more homes. The alternative is spiralling costs and unaffordable homes for far too many people, in the capital at least.

However, that pressure leads to anomalies. On the Isle of Dogs, around the towers of Canary Wharf in my constituency, developers are trying hard to get planning approval ahead of an agreed master plan for the area. There is keen local concern and worry about the scale, the pace and the density of development and the increased pressure on local services—on schools, GP surgeries and transport services, all of which are already under huge pressure. Councillor Rachael Saunders, leader of the Labour group, with support from the other political parties, is doing all she can within the confines of the law as it stands, but before the master plan, developers have greater opportunities. As opposed to some developments, such as the development at Wood Wharf by Canary Wharf, where the developer has fully engaged with the council, some developers do not engage with the local authority and those pressures are felt keenly.

Even One Housing Group is said to be looking to replace its four estates of 2,000 homes with 8,000 to 10,000 homes. One might expect unscrupulous property-driven developers to try to cash in unfairly, and we look to the council to do all it can to rein them in. But for a housing association to be operating the same practices is disappointing, to say the least.

Many proposed developments will have much higher population densities than the recommended 1,100 habitable rooms per hectare. I know that the Minister has this information because we sent him a copy this morning. One of the main legal questions we wanted to ask, with which we supplied him, was about part 2, chapter 7, sections 192 to 269 of the Housing and Regeneration Act 2008, which suggests that tenants could have been empowered to sack or recall their housing associations and failing providers. I would be grateful if the Minister could give a response to that today, but otherwise I would be happy to receive a written response in due course.

Housing is one of the most basic human needs; it is crucial for well-being and development. It needs not only to be built and maintained well but to build communities and not ghettoes. Thousands of people in Poplar and Limehouse, Tower Hamlets and all over east London need regulated protection. That does not currently exist, whether for leaseholders or for former council tenants in properties that are now run by housing associations. I hope that the Minister can clarify this area of considerable concern and give us some hope that there is a solution we can look forward to.

Photo of Tom Brake Tom Brake Assistant Whip (HM Treasury), The Deputy Leader of the House of Commons 2:46 pm, 6th March 2015

I congratulate Jim Fitzpatrick on securing this debate. I thank him for providing the notes for his speech so that I will, I hope, be able to respond directly to the points that has raised, albeit perhaps not with the answers that he is hoping for. If he feels at the end of the debate that there are points that I have not addressed, I will be happy to ensure that the Under-Secretary of State for Communities and Local Government, my hon. Friend Stephen Williams, who apologises for not being here, provides a written response.

I thank the hon. Gentleman for highlighting the work that my right hon. Friend the Secretary of State for Energy and Climate Change is doing with him in relation to leaseholders. I think all Members of Parliament will be aware of the difficulties that leaseholders often face, so we would all welcome any reform that can come through that work.

The hon. Gentleman drew attention to the decent homes initiative, which was initiated by his party in government. That was a good, sound programme. Rightly, however, he noted that in its initial stages it may have meant that the building of new properties was not taking place. We are all trying to catch up with that now. It was certainly a very important programme. In my borough, it is still ongoing. As part of that, there is lots of scaffolding up on the St Helier estate to provide new roofs.

The hon. Gentleman touched on affordable housing. I think we are in agreement about that. Unfortunately, I am underwhelmed by what the Mayor has achieved in that respect in London. Relatively few properties have been built, and there is clearly a strong demand for that.

The hon. Gentleman rightly focused this debate on the significant issue of whether tenants have the right to throw out their housing association. I will give him a very clear response to that shortly.

I agree that we need to build more homes and fix the housing market. The Government’s measures on the economy are part of that. In ensuring that the economy is working, we are getting the investment that is needed into the housing market and keeping interest rates down for home buyers. The situation is starting to turn round. Since 2010, over half a million homes have been built, and there are now 700,000 more homes in England than in 2009. I am pleased to say that house building is now at its highest level since 2007. We have recovered from the crash, in terms of house building.

The hon. Gentleman referred to stock transfers, which have played an important role in providing investment in housing stock. As a result of the transfers that have taken place in his borough and elsewhere, transformations have been carried out, improving local communities and quality of life for tenants.

Since 1988, about 1.3 million former council homes have been transferred to the ownership of housing associations. That has enabled billions of pounds of investment in bringing homes up to a decent standard. It has also supported the delivery of thousands of new affordable homes by the newly created housing associations, although I agree with the hon. Gentleman that that is not enough. There is a cross-party consensus—I think it will be identified in all the party manifestos—that there is a need to do something about housing, particularly affordable housing. Every party—my party, the hon. Gentleman’s party and the Conservative party—has set out what it wants to achieve.

The hon. Gentleman made specific reference to part 2, chapter 7 of the Housing and Regeneration Act 2008, under which enforcement powers are open to the Homes and Communities Agency regulator to use in dealing with a failing or failed provider. They are not open to tenants. In the housing association sector, however, tenants’ rights are protected through a range of mechanisms.

That leads me to the points the hon. Gentleman made about the abolition of the Tenant Services Authority and the role of the HCA regulator. The enactment of the Localism Act 2011 abolished the TSA and transferred its remaining functions to the HCA. It also significantly scaled back the regulator’s role in the proactive monitoring and enforcement of consumer protection standards. The rationale for that is that the vast majority of landlord-tenant issues are locally based. They are most effectively resolved at a local level by tenants and their representatives, not by a national regulator.

The Act gave back to tenants and their representatives the power to hold landlords to account, giving MPs, councillors and recognised tenant panels a formal role in resolving complaints at a local level. That can include referring complaints to the housing ombudsman if they cannot be resolved locally. The housing ombudsman, and the tenants themselves, can, of course, raise specific concerns with the HCA regulator. The regulator does not have powers to mediate in or resolve individual cases, but will investigate where there is evidence of serious detriment and, in extremis, have far-reaching powers to intervene where there is evidence of serious mismanagement. The regulator has the powers to initiate a statutory inquiry if it feels that to be necessary, and that can lead to muscular interventions in the housing association management structures or to forced mergers or takeovers where the boards are not fit for purpose. I am glad to say that the regulator rarely needs to use such powers.

I now turn to the hon. Gentleman’s specific question about One Housing Group and sacking housing associations. I am afraid that, as his legal advice suggests, there are no powers available for tenants to sack or fire their housing associations. Clearly, I do not wish to underestimate the impact felt by the individuals whose lives are affected by mergers of the members of One

Housing Group, or what they may see as very real grievances. However, it would not be appropriate for the Government to intervene in individual cases of this nature.

The Localism Act placed the power to scrutinise landlords’ performance and hold them to account back in the hands of tenants and their elected representatives. Where the ombudsman finds in favour of a complainant, it may order the landlord to pay compensation or take other steps to provide redress. I should make it clear, however, that the role of the Ombudsman is focused on the provision of housing services by landlords. Its role does not extend to constitutional changes within housing associations.

On affordable housing supply, overall this Government’s approach to the sector has been appropriate and is delivering results. Despite the fiscal constraints, we have secured capital resources for affordable housing. Almost 217,000 affordable homes have been delivered in England since April 2010. In comparison—the hon. Gentleman may have referred to these figures himself—under the previous Administration the number of social rented homes fell by 420,000 between 1997 and 2010.

With £19.5 billion of public and private investment, our affordable homes programme is on track to deliver 170,000 new affordable homes between 2011 and 2015, and more than 144,000 homes have already been delivered. Another £38 billion of public and private investment will help ensure that 275,000 more new affordable homes are provided between 2015 and 2020. I hope that all parties and future Governments will sign up to that. It means that over the next Parliament we will build more new affordable homes than during any equivalent period in the past 20 years.

I have directly addressed the hon. Gentleman’s specific question and I am afraid that the answer is no. I will conclude by encouraging him to contact me again if he feels I have not addressed any of his points adequately.

Question put and agreed to.

House adjourned.