rose to move, That the draft order laid before the House on 15 October be approved.

My Lords, noble Lords will remember the many excellent debates we had during the passage of the Housing and Regeneration Bill, which was much improved by the contributions of Members of this House. Today we are considering the draft of an order, the Housing and Regeneration Act 2008 (Consequential Provisions) Order 2008, which will make a number of amendments to legislation which are necessary once certain provisions of the Housing and Regeneration Act 2008 are commenced.

Before going into the substance of this technical order, I should perhaps explain how it fits as part of a wider package of orders coming forward. In addition to this affirmative order, there are also two orders subject to the negative resolution procedure before the House. The first, the Housing and Regeneration Act 2008 (Consequential Provisions) (No. 2) Order 2008, is similar in nature to this one save that it amends secondary legislation. The second, the Transfer of Housing Corporation Functions (Modifications and Transitional Provisions) Order 2008, transfers the existing functions of the Housing Corporation to the HCA and the TSA. All of these orders are linked in timing to the commencement of Section 5 of the Housing and Regeneration Act 2008. There is nothing special about Section 5, other than that it is the first section that we have not yet commenced. All being well, this will all come into effect on 1 December 2008.

It was a great pleasure to take the Housing and Regeneration Bill through the House because of the tremendous amount of cross-party support for the main purposes of the Act—the creation of the Homes and Communities Agency, bringing together investment and delivery, and the creation of a new regulator of social housing in line with the recommendations of the Cave report, Every Tenant Matters—and the many interesting and constructive debates we had on issues around these central principles. Noble Lords may be aware that these new bodies have been created, albeit in very limited form for now so that they can, for example, appoint board members. This order will come into force when the main powers and functions are turned on by or transferred from the existing bodies—the Commission for the New Towns, the Urban Regeneration Agency and the Housing Corporation—to the new ones.

The purpose of the majority of the amendments in this order is, quite simply, to update references to predecessor bodies and other references in existing Acts to ensure that these reflect the position once the HCA has been created and the predecessor bodies abolished. There is nothing pertinent to the regulator in this order. Where taxation matters are concerned, the intent is to leave the current position substantially unaltered. So the effect of these amendments, other than in the rewording of existing Acts, is extremely limited. They do not contain substantive policy issues; they are simply technical in nature. They effectively change the name of the relevant organisation to the HCA in legislation and they therefore pass the existing powers and functions from the URA, the CNT or the Housing Corporation to the HCA. The amendments are aimed, quite simply, at maintaining the status quo.

I suspect that noble Lords—especially those who were here at midnight last night—would not thank me for going into the detail of every individual amendment and so, on balance, I will not do so unless I am bound to under challenge from noble Lords. I have a line-by-line explanation but I shall forego that. However, it provides an opportunity to briefly update the House on what has happened since the Bill left here, received Royal Assent and became an Act. I say again how much the Act was improved by the contributions of this House, for which I was very grateful.

Following on from that, work has continued apace to ensure that the HCA and the TSA can be up and running on 1 December 2008, four months ahead of the date originally planned. This work has included developing the necessary secondary legislation: the first commencement order, which allowed, among other things, the HCA and TSA to appoint board members, was laid in September; this affirmative order and the two negative orders that Parliament is currently considering; and a second commencement order giving the HCA the bulk of its powers and responsibilities is currently being prepared and is expected to be laid before the end of this month in time for 1 December.

The HCA and TSA chairs, boards and senior management are in place. The HCA has conducted, and will continue to conduct, a series of regional stakeholder events setting out how the HCA will work and deliver. I am very impressed by the way in which Sir Bob Kerslake has involved the entire staff of the HCA in the formulation of the new body. It has been a very open and energetic process and is thoroughly to be commended.

The department's sponsorship arrangements are being finalised and staff are being appointed. The various necessary pieces of corporate documentation for both agencies are either agreed or in the final stages of being agreed. The continuity of transferring CLG programmes has been safeguarded by 42 staff agreeing to transfer on secondment to the HCA, and those secondments vary in length between a few months and three years. HR and payroll systems are in place for both agencies and, where appropriate, have been tested. Arrangements are in place for the physical transfer of staff and data. Also with a view to a smooth transition to the new organisation, the HCA finance and IT systems have been tested successfully. The TSA financial systems are in place and are fully operational.

To achieve the benefits expected from it, therefore, the HCA will need to create a truly single agency from its component parts, which also means a single culture. That process will start immediately after 1 December with the development of a new regional structure for the agency and will include a wholesale review of the agency's accommodation requirements and continuing work to create a distinctive culture for the HCA.

The benefits offered by the HCA are already evident in the department's developing a response to changing market conditions. I shall take a few moments to talk about this because it is such an important part of what will be done. The HCA's scale and the flexibility that comes from having housing and regeneration programmes delivered by the single agency are valuable additions to our policy armoury. Further benefits will flow in the next CSR period when it may be possible to redesign existing programmes to fully exploit the synergies that are available from the single agency.

The HCA is coming into being in a very different context from that in which it was conceived. To pick up the point made last night by the noble Lord, Lord Dixon-Smith, we are looking at a very different situation. There is unlikely to be any area of the HCA's business that is unaffected by the credit crunch. House purchasers and house builders and developers are unable to access the funding they need, and activity is slowing markedly. The scale and speed of the downturn in the housing market have been striking. In the context of a wider economic downturn, the role of the HCA is likely to be significant. There continues to be a significant gap between supply and rising demand for new homes, and the HCA will be central to addressing that gap.

To support that, the Government are pressing ahead with the reforms that are needed to focus on the long term and condition the market and industry for growth, including repackaging surplus public sector sites and ensuring better infrastructure co-ordination. The HCA will obviously have a key role to play in that, as it will in the administration of HomeBuy Direct and the purchase of developer stock, both of which form key planks of the Government's response to the current economic downturn.

As a means of delivering in this changed climate, the HCA has identified its key immediate priorities as having a close understanding of what is happening on the ground now and likely to happen in the near future, adopting a proactive, flexible and creative approach to ensure that as much market activity as possible can continue, and developing new approaches to broadening the base of providers and accessing new sources of finance. As a means of delivering against those priorities, the HCA is therefore developing plans to find effective ways of focusing on the delivery of social and affordable housing and housing supply; working closely with the RDAs on regeneration projects that are most at risk or in danger of stalling; making sure that money invested in regeneration and infrastructure assists in job creation; working as flexibly as possible with the housing developers by, for example, releasing smaller parcels of land, even if that is marginally less cost-effective; working with the financial sector to find new ways of funding that can help unlock the supply of homes; supporting local authorities and regions in their role in housing delivery, regeneration and development; developing, as quickly as practicable, original and innovative solutions and working flexibly to maximise the synergies across the programmes so that every penny counts; and involving local people and communities to make sure that its investment solutions are wanted and deliver what is needed. The HCA has to do all that without ever losing sight of the need for long-term sustainable development to create high quality places and housing and help combat climate change.

The implementation of these plans should enable the HCA to continue to deliver against its objectives throughout this period of economic turmoil and leave us well positioned for the world that emerges from the current economic conditions.

I have taken the liberty of explaining a bit of the context in which the HCA is now working. I hope that noble Lords will find that helpful and will approve the order.

Moved, That the draft order laid before the House on 15 October be approved. 28th Report from the Joint Committee on Statutory Instruments.—(Baroness Andrews.)

My Lords, it is a pleasure and a relief to see the Minister again on a subject so straightforward as the Housing and Regeneration Act 2008 (Consequential Provisions) Order, which consists of amendments to other legislation already on the statute book that are the natural consequences of the passing of that Act. To that extent, this is not particularly controversial. I am also grateful for her update on progress in the establishment of the Homes and Communities Agency and the housing regulator. It is good to know that that programme is going well, and the fact that it is likely to be completed ahead of the original schedule is a matter of satisfaction to everyone who has been involved.

The questions that derive from the information I have received relate to the Minister's summing-up of the changing circumstances in which the whole construction industry finds itself. Behind the regulation a cost-benefit analysis was done, which we have all received. I wonder if the Government have had any opportunity to review those figures in the light of the very different economy in which we are now working and, if so, what their conclusions might be.

I am bound to say that I had some difficulty here, but that may be because I do not understand the statistical background in resolving the actual figures that the cost-benefit analysis appeared to reveal. I would be grateful if the Minister could explain to me how that work was done, if that is not too technical a question, and tell me whether any attempt has been made to update those figures in the light of the changed circumstances.

With regard to the content of the order, I have nothing to add to what the noble Baroness has said and I am grateful for her explanation.

My Lords, I, too, thank the Minister. I have only one question on the order and one closely related to it, which is certainly related to what both noble Lords have said.

With regard to taxation matters, I think the words that were used were, "the position is substantially unaltered". I am sorry; it has only just occurred to me to probe that. I do not know whether that means "unaltered save for title", or whether there is anything more. I think the phrase, "leaving everyone as far as possible in a tax-neutral position" was also used, which raises the question of what is not possible. Is that disadvantageous? I should perhaps be looking in a different direction for this question.

The Minister talked about the context of the order and referred to the rather different situation in which we now find ourselves, even though it seems only five minutes ago that we finished the Housing and Regeneration Bill. Local authorities up and down the country are working on local economic recovery plans, and I wonder whether the Minister has anything more that she can add about ways in which the HCA is working and intends to work with local authorities, because not every one will be the same. Are the Government satisfied that the model that we created in a spirit of co-operation is actually the right one?

My Lords, I will start with that question first, if I may. In terms of the way in which the HCA sees itself as responding uniquely to the situation, what we have in the HCA has always been a single conversation, the language we used when considering the Bill. We also have the capacity for innovation to work in different ways, whether it is with local housing companies and local authorities or the opportunities that local authorities are considering regarding funding for the purchase of stock from developers, for example. The Housing Corporation will be involved with local authorities in all the initiatives we have put in place to try to free up the housing market.

As of 2 October, of the £200 million a year marked for the purchase of stock from developers, the Housing Corporation has allocated £72 million, which will deliver 2,160 affordable homes. That obviously involves close conversations with local authorities. There will be a premium on what we can do by way of innovation and social housing, because this is where it will bite most specifically.

All the information I have received from the HCA shows that it wants to work as flexibly as possible and is open to good ideas. That means working as flexibly as possible with housing developers. I talked about releasing smaller parcels of land as well as looking at what else local authorities can do in their allocations policy and the way in which priority groups are coming forward with their housing needs. The HCA will also work closely with the regions on housing delivery. One needs to look at the sustained pressure for more homes as well as the obvious failure of developers to access the cash to do the start-ups. We are looking at clearer leadership, less fragmented funding and more effective partnership. All that will benefit relationships with the HCA.

It is our intention to maintain tax neutrality; all the provisions have been drafted on that basis.

I do not have the cost-benefit analysis in front of me, but the circumstances have changed since the impact assessment was prepared, and we are aware that the financial benefits may not be as great or realised as soon as originally envisaged. I am very happy to write and explain how the methodology will help us to understand some of the differences that we are likely to see.

On Question, Motion agreed to.