Social Housing (Regulation) Bill [HL] - Second Reading

– in the House of Lords at 3:27 pm on 27th June 2022.

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Lord Greenhalgh:

Moved by Lord Greenhalgh

That the Bill be now read a second time.

Photo of Lord Greenhalgh Lord Greenhalgh The Minister of State, Home Department, Minister of State (Department for Levelling Up, Housing and Communities)

My Lords, I am proud to be here today to open this Second Reading debate of the Social Housing (Regulation) Bill. This Bill will transform the lives of social housing tenants up and down the country. Once it is implemented, more tenants will live in decent, well looked-after homes, enjoying the quality of accommodation that they deserve.

However, it is right that we also reflect on the events that have led us to this point. Just over five years ago, 72 people—18 of them children—died as a result of the Grenfell Tower fire. The horrifying scenes that night ought never to have occurred. The situation in which the residents of Grenfell Tower were placed was unforgivable. The fire at Grenfell Tower exposed failures and decades of malpractice. It is vital that we bring about reform and lasting change so that a tragedy such as Grenfell never happens again.

Noble Lords have debated the Fire Safety Act and the Building Safety Act. The Social Housing (Regulation) Bill represents the next step in this programme of change. Social housing tenants, whether in Grenfell Tower or elsewhere up and down this country, have not been treated with the respect that they deserve. They do not always feel safe in their homes. Everyone should be treated with respect. Everyone has the right to feel safe in their home. In 2022, it is a disgrace that there are social housing tenants who are forced to live in damp, cold, unsafe homes. Some tenants wait months for repairs and are ignored by their landlords. We should be ashamed that this takes place. There are many good landlords in the sector. Many provide high-quality, well-managed, well-maintained accommodation. Many listen and care for their tenants, and many run a fiscally sound organisation. However, that cannot be said for every organisation. The Social Housing (Regulation) Bill will change this.

This Bill is short but radical. The Regulator of Social Housing is responsible for landlords who register with it throughout England. The regulator will be taking a new, proactive approach to regulating social housing landlords on the issues that matter most to tenants: safety, so that tenants feel protected in their homes; transparency, so that tenants know what their landlord is doing to resolve their issues and can hold their landlord to account; quality accommodation and services, which we would expect landlords to provide; and complaint handling, so that tenants are listened to and their concerns are effectively addressed. The Bill will drive significant change in how social landlords behave, forcing them to focus on the needs of their tenants. Where they do not do this, they will be held robustly to account.

The Bill has three key parts. The first is a brand-new proactive consumer regime. This is the core of this legislation. The regulator will be empowered to hold landlords to account and to proactively ensure landlords are meeting the consumer standards we expect them to deliver. We are changing the regulator’s objectives. This will put tenant safety and transparency at the heart of everything the regulator does. We are removing the “serious detriment” test so that this is no longer a barrier to the regulator enforcing breaches of consumer standards. We are setting out the powers for the Housing Ombudsman to issue a complaint handling code to its members and to make orders to prevent problems recurring in future following complaints.

The Government are also taking a power to bring forward electrical safety regulations for social housing. We are consulting on mandatory electrical safety checks in the social rented sector, and this will align standards with the private rented sector. The new regime will also mean that the regulator will regularly inspect the largest landlords to ensure they are delivering quality homes and services to their tenants. Landlords will need to appoint a person with specific responsibility for health and safety. There will be a new access to information scheme. This will work similarly to the Freedom of Information Act for landlords not currently captured by that Act. Tenants of these landlords will, under the access to information scheme, have the right to request information from their landlord so they can effectively hold their landlord to account.

The second part of the Bill tweaks the current economic regulatory regime. The existing regime has been highly successful. The regulator has been effective at ensuring social housing landlords are fiscally well managed, and that tenants’ homes are not lost. However, we cannot rest on our laurels. The make-up of the sector is changing. New models for how landlords structure their organisations are popping up. We need to future-proof the current regime. We are tightening the definition of “non-profit” so that malign actors cannot play the system. We are forcing landlords to notify the regulator when they change their corporate form. We are introducing a look-through power so the regulator can follow money paid outside of the regulated sector, to ensure probity.

The third part of the Bill will give new powers for the regulator to take enforcement action when things go wrong. These powers will ensure the regulator can take robust action where landlords are failing to meet standards. There will be no limit on the amount the regulator can fine a landlord. Where a survey uncovers a serious issue with a property that a landlord has failed to fix, the regulator will be able to intervene and carry out repairs to fix the problem.

Noble Lords will wish to note that there will be a few targeted government amendments to this legislation in Committee. Among these, we are adding a provision that companies will be required to notify the regulator when there is a change in control of a housing association, as set out in the social housing White Paper. We are also adding a duty on the Housing Ombudsman to monitor compliance with its complaint handling code and a power for the ombudsman to recover any associated costs from its members.

The introduction of the Social Housing (Regulation) Bill to this House represents a decisive moment for tenants of social housing up and down this country. I beg to move.

Photo of Baroness Wilcox of Newport Baroness Wilcox of Newport Opposition Whip (Lords), Shadow Spokesperson (Wales), Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Education) 3:33 pm, 27th June 2022

My Lords, I welcome the noble Viscount, Lord Camrose, and look forward to hearing his maiden speech shortly.

Before that, Labour welcomes the Social Housing (Regulation) Bill, which introduces long-overdue changes to the social housing regulation regime, five years on from the Grenfell Tower tragedy. However, we regret that what is essentially narrow and largely uncontroversial legislation has taken so long to materialise. Fire safety concerns raised by Grenfell residents had been ignored by their landlord. Residents complained of not being heard and of being treated with indifference. Therefore, we call from this side of the Chamber for higher standards for social tenants. We are extremely disappointed that the Bill does not go far enough in putting tenants at the heart of regulation and governance. The Grenfell tragedy shows that tenants can never again have so little power over their homes.

However, we must set the context in arriving at a judgment on the Bill. There are many social landlords who routinely fall well short on repairs and maintenance and could do far better. However, social landlords do not operate in a vacuum. Years of funding cuts to local authority budgets, as well as the four years during which a Conservative Government imposed a 1% social rent cut on them, have inevitably taken their toll, with the pandemic adding to the problems of housing revenue accounts.

Another major factor is the lack of affordable social housing, which has been exacerbated during 12 years of Tory rule. Successive Governments have not only singularly failed to build the social homes we need over that period but have overseen their loss on an unprecedented scale; 134,483 social homes for rent were either sold or demolished without direct replacement between 2010 and 2021. That is an average net loss of over 12,000 desperately needed, genuinely affordable homes a year.

Unfortunately, the Government’s headline proposals of rating your landlord and allowing a 250-person panel to meet three times a year with Ministers are not the powers residents need. The panel will exist only to scrutinise the measures being proposed in the legislation and will not be able to consider other pertinent issues, such as waiting lists, stigma, rent increases, allocation and housing supply. We need the Government instead to bring forward proper proposals to give tenants more power to take action in both social and private rented sectors. They should look towards the work of the last Labour Government, who introduced the decent homes standard, making available £22 billion of public investment in decent homes and improving the housing conditions of over 1.4 million council homes. By 2009, 86% of all council and housing association homes were brought up to a decent standard.

I reiterate that we support many of the measures in the Bill. However, given the scale of the problem that we know exists in regulating social housing, we want the Government to go further in key respects so that standards in social housing can markedly and rapidly improve and tenants’ complaints can be dealt with quickly and efficiently.

We have concerns about the ability of the Regulator of Social Housing to respond in practice to the volume of individual tenant complaints it is likely to receive and whether it will be inadequately resourced to perform its new role vis-à-vis inspections. We will therefore seek to amend the Bill to allow the regulator to retain the proceeds of any fines levied to help fund its work. We want to see the regulator given more teeth than the Bill currently proposes. We will seek to give it a range of wider powers, including the ability to order compensation for tenants.

Even with an enhanced role, armed with greater powers to regulate consumer standards in social housing, the regulator cannot be the sole redress for tenants. We will seek to have the Bill do more for tenants to enforce repairs themselves. We believe it does not go far enough on a national voice for tenants. At a minimum, the work of the residents’ panel could be shaped more directly by tenants themselves. We will seek to ensure that it can be—for example, by enabling its agenda and terms to be developed via tenant input.

An advisory panel with tenants represented on it will be established by the Bill, but to consider only

“information and advice to the regulator about, or on matters connected with, the regulator’s functions”.

This is not a new idea. In the aftermath of Grenfell, the Government and tenants drew up plans to set up A Voice for Tenants, a national tenant group to work with government on issues affecting those in social housing. To the frustration of tenant bodies involved, it never progressed.

Another possible issue is that the Regulator of Social Housing relies on registered providers to let their tenants know of ways to complain, which means that the worst providers are likely to be the ones to inform their tenants of their rights, and therefore potentially reduce complaints. The White Paper committed to routine inspections only for the largest registered providers—those of more than 1,000 homes—every four years.

Beyond this, there is nothing in the Bill on how tenant voice and engagement will work in practice at the local level. It would allow, but not force, the regulator to set standards relating to the information landlords provide to tenants. Examples are mentioned in the draft regulations.

Safety is the greatest of concerns. The Bill would add generic safety to the regulator’s fundamental objectives. This means that the regulator can now set a standard on safety and enforce against it. The Bill further introduces a new requirement for social landlords to appoint a named individual responsible for health and safety. A separate regulator, the Health and Safety Executive, will also regulate all buildings’ safety when the new regime comes into force.

Currently, fines for non-compliance are capped at £5,000. The Bill proposes giving the regulator the power to issue unlimited fines. Larger fines could be a crucial deterrent to bad practice, enforcing the law against poorly performing landlords and disincentivising the poor treatment of tenants, but questions remain about what the fines would mean in practice, particularly in terms of housing associations passing the cost back to tenants.

The Bill also proposes enabling the regulator to enter and inspect properties with only 48 hours’ notice, down from 28 days, which is a significant change. However, short notice inspections need to be carefully thought through. Finally, the Bill proposes enabling the regulator to make emergency repairs where there is a serious risk. The White Paper stated that the Government were

“determined to increase the supply of new and beautiful social homes”, yet the Bill is silent on the issues of supply.

I leave my final comments to echo those of David Renard, the Conservative leader of Swindon Borough Council and housing spokesperson for the Local Government Association:

“As well as improving existing homes, the social housing supply is not sufficient to meeting the current housing demand, which is why we want to see long-term plans to give councils powers to build 100,000 high-quality, climate-friendly social homes a year, including reform of the Right to Buy scheme, which has made it difficult for councils to build replacement homes at the rate at which they are sold.”

Photo of Viscount Camrose Viscount Camrose Conservative 3:42 pm, 27th June 2022

My Lords, it is a great honour to make my maiden speech in your Lordships’ House today. I start with deep and sincere thanks to the many people who have helped me in the daunting journey of taking up my membership: Black Rod, the Clerk of the Parliaments and their offices; staff at the door of the Chamber and elsewhere; the Whips’ and the spads’ offices; and the many noble Lords on all sides of the House whose warmth, friendliness, encouragement and advice have made joining such a pleasure.

The first Viscount Camrose was my great-grandfather, who started as a journalist on the Merthyr Times—only 40 miles from Newport, I think. He built and grew a remarkable stable of newspapers, both regional and national, including, among many others, the Manchester Evening Chronicle, the Sunday Times, the Financial Times and the Daily Telegraph, which remained in family ownership until 1986. He became a baron in 1929 and a viscount in 1941.

Growing up surrounded by journalists, I concluded very early in life that I never wanted to become one but chose instead to go into management and consulting. As a result, I have had the great good fortune to live and work, as well as in London, in Redcar, in Birmingham, all over Europe, in a number of the great sprawling cities of west Africa, and in the United States. I have worked in international development, shipping, pharmaceuticals, oil and gas, financial services and manufacturing. Through these experiences, I have developed a strong interest in what makes people and the organisations they work for productive. Few of life’s experiences offer more satisfaction than a productive working day, and it has been and remains my purpose to provide as many of those to as many people as possible.

It is through that lens that I would like to comment on this Bill. Looking at it, as I would, as a management consultant, I suggest that we need to ask ourselves two questions. First, are the residents of social housing going to be made substantially safer and better accommodated by its provisions? Secondly, does it effectively balance the needs of providers of social housing and residents? As for the first point, I welcome the requirement on providers to appoint health and safety leads with the authority, capacity and resources to take responsibility for building safety. Few things get more in the way of risk management and incident preparedness than ambiguity—ambiguity over who is supposed to make decisions and who holds the budget to pay for the changes that those decisions require.

I am sure that we all recall with horror many different details of the Grenfell disaster, but one that sticks in my mind is the fire extinguishers that had been marked down for decommissioning by one team but were never actually decommissioned because it was not clear who was supposed to be doing so. That is why it is so valuable to make a single properly resourced person accountable for all safety decisions.

As to my second question on balancing the needs of social housing providers and residents, I am encouraged by the primacy of the tenant in these new regulatory arrangements. Although, of course, the priority is to offer safe homes of good quality to residents, we have to make sure that providers are willing to enter the market and compete. On this basis, I welcome the primacy of the tenant in the Bill, because it aligns the interests of all three parties: the tenant, provider and regulator. To satisfy the tenant is to satisfy the regulator, and I welcome the clarity of this direction.

If the Bill has been a long time in coming, that time has clearly been spent in taking considerable pains to design, through the Green Paper, call for evidence and White Paper, what we can all hope will have a transformational effect on the social housing sector.

Finally, it is worth reminding ourselves of the context for benefit-dependent tenants: the tightening public purse; a continuing dearth of affordable housing, worsened by the rise of Generation Rent; and, of course, the uncertainties of inflation. In these highly pressured circumstances, we need more homes and more providers to enter the market. I suggest that a stable, balanced regulatory environment for social housing will go some way to encouraging them to do so.

Photo of Lord Young of Cookham Lord Young of Cookham Deputy Chairman of Committees 3:47 pm, 27th June 2022

My Lords, it is a real pleasure to be the first to compliment my noble friend on his maiden speech. He has entered the Benches on this side of the House the hard way. He had to compete against a substantial number of well-qualified candidates who applied for the vacancy, whereas the rest of us, such as me, simply had to catch the eye of the Prime Minister of the day. I see with him in the House some of his recent fellow successful candidates, all regular attenders, in collective defiance of the Private Member’s Bill of the noble Lord, Lord Grocott.

My noble friend has built his career independently of the publishing tradition with which his family is associated, and, as we have heard, brings to your Lordships’ House a range of highly relevant abilities and interests, ranging from the oil and pharmaceutical industries to issues of governance and corporate management, and he has developed them in all parts of the globe. One of his particular concerns is that people and organisations cannot fulfil their full potential because they are not productive, particularly those who are out of work. The biggest problem facing this country today is poor productivity, and I look forward to his contributions to that debate. I also particularly welcome him to the ranks of those on this side of the House who take an interest in housing, and agree with what he said about the need to invest more in housing and social housing. I know the whole House will join me in welcoming my noble friend, and we look forward to his future contributions.

Turning to the Bill, I am grateful to my noble friend the Minister for the meeting he arranged to discuss it, which was attended by the noble Lord, Lord Best, and me. The noble Lord’s travel arrangements have precluded him attending due to disruption on LNER. I can tell my noble friend that, as a result of that meeting with him, I will not be causing him the distress that I know I did during the passage of the then Building Safety Bill.

I have three issues that I want to raise with my noble friend. The first concerns Clause 2 and the advisory panel. The Bill provides for a statutory advisory panel. I welcome the idea, but why does it have to be statutory if its role is simply to give advice? The Housing Ombudsman also has a panel of advisers created in 2018, but that is not statutory and seems to work perfectly well. There are many other instances of panels and advisory boards dotted around Whitehall which are informal. Making this one statutory could raise costs, make it subject to judicial review, make it less flexible and will require primary legislation if it were to be abolished. Is this a bit of gold-plating that we do not really need?

How does this panel relate to the one that was set up a year ago? In August last year, Minister Eddie Hughes announced a new expert panel to advise the Government on the delivery of the social housing White Paper. That was non-statutory, with 14 members to deliver on the reforms. Are these the same people who will form the panel in Clause 2, whose objectives seem to be exactly the same as the expert panel, or are we to have two panels with similar objectives, one statutory and one non-statutory? Perhaps my noble friend can shed some light on this.

My second issue concerns the relationship between the two bodies to whom social tenants can now complain. A social housing tenant can complain to the Housing Ombudsman, and now to the Regulator of Social Housing. I am all in favour of avenues through which tenants can seek redress, but there must be some risk of duplication here. It is clear from the Bill that the Regulator of Social Housing can have a direct line of communication with tenants. The social housing White Paper expects:

The Regulator of Social Housing to undertake specific, reactive investigations and/or inspections where appropriate. This could be when a serious potential compliance breach has been brought to its attention by tenants”.

The briefing notes that accompanied the Queen’s Speech also referred to the powers of the regulator to arrange emergency repairs to tenants’ homes following a survey, and to a guarantee that the regulator will be able to act more quickly where it has concerns about the decency of a home. Therefore, the regulator also has the means to rectify complaints itself, as contained in Clause 24.

These are not powers that the Housing Ombudsman has—his role is to resolve disputes. He can make awards and recommendations, but he cannot, for instance, enter premises to remedy specific failures. If I was a tenant, and particularly if there is a backlog of complaints to the Housing Ombudsman, I would head for the Regulator of Social Housing, since he has more powers. However, there is a further overlap where there is scope for confusion. The Housing Ombudsman does not just resolve complaints: he has broader objectives that seem to trespass on the territory of the regulator. For example, the Housing Ombudsman uses insight and data to identify trends in complaint types and carries out thematic investigations into issues affecting the sector, producing regular “spotlight reports”. He investigates systemic issues relating to individual landlords. He can share expertise, insight, experience and learning to influence the sector to drive a positive complaint-handling structure. These objectives are emphasised in the corporate plan for 2022-25.

However, those powers of the Housing Ombudsman are very similar to the powers given to the regulator in Clauses 17 and 21, and to the objectives set out by the Minister. Paragraph 1 of the Explanatory Notes tells us that:

“The intent of this Bill is to reform the regulatory regime to drive significant change in landlord behaviour to focus on the needs of their tenants and ensure landlords are held to account for their performance.”

However, that is just a shortened version of what I have just read out about the ombudsman.

This brings us to Clause 4. The Explanatory Notes refer in more diplomatic terms to the potential conflict I have just referred to:

“The regulator and the housing ombudsman both have a role in overseeing the performance of social housing landlords”.

But that is the problem. They then refer to the memorandum of understanding between the two. Officials kindly sent it to me, but it does not deal adequately with this overlap. It should be rewritten, with greater clarity about who does what, and to avoid duplication. It is not enough to say, as it does at the moment, that they should

“seek to promote understanding about their respective roles.”

I hope my noble friend can reassure me that this overlap will be addressed.

Finally, I turn to issues which will be raised by the noble Baroness, Lady Hayman. She is commander-in-chief of Peers for the Planet and I am a humble spear-carrier, but there is a need to increase energy efficiency in the social housing stock if we are to achieve our climate change objectives. Although the Government set the objective of improving the efficiency of homes, no commitment has yet been made on social housing. Their Heat and Buildings Strategy states:

“We will also consider setting a long-term regulatory standard to improve social housing to EPC band C, with levers required to decarbonise the stock in line with Net Zero”, but no consultation has yet been launched. The Committee on Climate Change recommended that all properties should reach EPC C by 2028.

Related to this, I refer the Minister to Clause 18, which enables the regulator to issue a code of practice on consumer standards. Will energy efficiency be included in this code, against the background of what I just said?

With those remarks, I end by assuring my noble friend that I welcome the Bill and hope it reaches the statute book soon.

Photo of The Bishop of Chelmsford The Bishop of Chelmsford Bishop 3:55 pm, 27th June 2022

My Lords, I also begin by congratulating the noble Viscount, Lord Camrose, on his excellent maiden speech. Clearly, he has a whole set of skills and experiences that will ensure that his contributions in this House will be highly valuable, as was apparent in his incisive and to the point speech, much of which I agree with and endorse.

Before I go any further, I declare my specific interest as the Church of England’s lead bishop for housing. Noble Lords will know that the Archbishops’ Commission on Housing, Church and Community has been actively working to envision how the Church, government and the nation might tackle the current housing crisis. Last year, the commission released its Coming Home report, which sets out in detail a reimagining of housing policy and practice centred on five core values, which are that housing should be

“sustainable, safe, stable, sociable and satisfying.”

Recently, the Church announced its intention to create a whole new national housing association, which will enable it to become a major provider of social housing. We are committed to doing our part to tackle the social housing shortage, and likewise to working with others to bring about this vision of truly good-quality housing across the nation.

Therefore, I welcome the Government’s introduction of the Social Housing (Regulation) Bill. Many of its measures begin to address issues of transparency and accountability. The removal of the serious detriment test is much needed. As things stand, it is a major barrier to ensuring proactive engagement with tenants’ concerns. It is right to remove it in order to ensure that good living standards are upheld and maintained. The setting up of an advisory panel to amplify tenants’ voices is also very welcome. Too often the concerns of social housing tenants have been ignored or silenced. This must end.

The tragedy of the Grenfell Tower fire demonstrates the urgent need for safety to be a central objective. We must all do everything we can to ensure this dreadful tragedy is not repeated. As the Bishop of Kensington, the right reverend Dr Graham Tomlin, said at the recent five-year memorial service,

“what happened at Grenfell was wrong. It was not an unfortunate accident—it was the result of careless decisions taken, regulations ignored, an industry that seemed at times more interested in making profits and selling products than in the precious value of human life and keeping people safe in their own homes.”

I am sure noble Lords will join me in strong praise of the work done by the Bishop of Kensington and the incredible Grenfell community to bring about a safer future for social housing in their community and across the nation.

Therefore, it is only right and appropriate that the Government have now made safety one of the regulator’s fundamental objectives in the Bill. I urge the Government to also consider adding as fundamental objectives the other core values of sustainability, stability, sociability and satisfaction. These can work in complementarity to ensure truly good housing for all.

What plans do the Government have to increase the amount of good-quality social housing stock in the nation that meets these objectives? Recent decades have seen a drastic drop in available social housing. According to Shelter, since 1991 there has been an average annual net loss of 21,000 social homes and more than 1.2 million households are currently waiting for social homes. Millions have been pushed into the private rented sector, often resulting in unstable and unacceptable circumstances of overcrowding or temporary accommodation. We must work together to address this shortage of supply. In doing so, it is essential that we ensure that this is truly affordable housing. Current definitions of affordability fall short. What is classed as affordable should reflect residents’ ability to pay rather than local market rates. Simply building more homes without consideration of their affordability will not solve the housing crisis.

I understand the impetus to fine social housing landlords, but I would be grateful if the Minister could clarify how this will work effectively, given that such fines are likely to take resources from the housing association, thereby potentially reducing its ability to provide services, improvements, tenancy and neighbourhood support, a point touched on by the noble Baroness, Lady Wilcox.

Finally, in addressing the housing crisis, I urge the Government to consider one more essential element set out in the Coming Home report: sacrifice. At present, the cost of the housing crisis falls largely on those who are financially poorest and resident in unaffordable or substandard housing. This is starkly evident at the moment as the cost of living crisis bites as well. The housing crisis will not be solved unless there is a willingness among others in the housing market to share this burden: that means landlords, developers, landowners, homeowners and government. These sacrifices will help ensure a lasting housing legacy that works for us all. A long-term, cross-party housing strategy that brings those at every level of government, together with landowners, developers, landlords, homeowners and faith organisations, is the only way that sustainable and meaningful transformation will happen.

Photo of Lord Bourne of Aberystwyth Lord Bourne of Aberystwyth Conservative 4:02 pm, 27th June 2022

My Lords, it is a great pleasure to speak in strong support of the Second Reading of the Social Housing (Regulation) Bill. I declare my interest as set out in the register. I, too, congratulate my noble friend on a maiden speech of great distinction. It was truly excellent.

It is a great pleasure to follow the right reverend Prelate and to agree with much of what has been said. So far this has been a debate of almost universal consensus, but I take issue with the noble Baroness, Lady Wilcox, with whom I am normally totally in agreement, and point out to her that many of these problems are of long standing and did not suddenly arise in 2010. Nevertheless, she made a great stump speech and I know the noble Baroness is very capable of that.

Any fair-minded person would say that it is high time that we responded to the Grenfell fire with this legislation. We do that here and I congratulate my noble friend on the legislation, which is totally appropriate. The proactive regulation regime being introduced and the refining of the regulatory position are desirable, as are the strengthening of enforcement powers and the toughening up of enforcement rules. That said, when my noble friend responds to the Second Reading, will he deal with some of the costs on the social housing regulator that may be increasing and seal off that issue? I am not sure whether the costs are considerable or not.

These regulations will govern 4 million households; that is significant. They will help give some closure to the people involved in the Grenfell fire. I was Minister in the department at the time and I remember the lasting horror of that as if it were yesterday—it has been quite a long while now. I think this will help give some sort of closure, as will decisions on prosecutions, although I recognise that this is well outside my noble friend’s control as a Minister. Not all government Ministers recognise that there is a division of powers but I know my noble friend does. I am conscious that, while no doubt progress is being made, it is somewhat slow.

I am very pleased that there is something specific on electrical safety checks in the legislation that we will be considering. Members will recall that, although the cladding obviously made a massive contribution to the spread of the fire, in legal terms it was caused by an electrical fault. I pay tribute here to the work of Electrical Safety First, an excellent organisation led by Lesley Rudd, Ron Bailey and others, which does first-class work in this area and has been focusing attention on the need to extend electrical safety checks from the private sector to include the social sector. The Bill will do just that. I hope that the consultation going on in parallel with this will be comprehensive and will look at all checks of installations of appliances so that we can deal with an all too common cause of housing fires in our country. Again, that will be a welcome development if, again, somewhat late.

I join my noble friend Lord Young in asking about the relationship between the housing ombudsman and the regulator; I am not clear in my own mind how that would work and would be grateful for any clarity. I also join him as another spear carrier behind the chariot of the noble Baroness, Lady Hayman, as it proceeds in the fight on climate change and related issues, in this case particularly including energy efficiency. We will be looking at that keenly as the legislation progresses. Nevertheless, we should all give a warm welcome to this legislation; no doubt we will seek to improve it as it goes through Committee and Report.

Photo of Baroness Warwick of Undercliffe Baroness Warwick of Undercliffe Labour 4:07 pm, 27th June 2022

My Lords, I add to the compliments to the noble Viscount, Lord Camrose, on a most thoughtful and interesting speech. It was something to ponder on and I am sure that, in further contributions to the housing debates, it will be possible to expand on some of his thoughts and ideas. I am also delighted to follow the noble Lord, Lord Bourne of Aberystwyth, with whom I share a number of interests.

I am pleased today to welcome unreservedly the Social Housing (Regulation) Bill, as others have. It is vital legislation, which will give residents a much more powerful voice when it comes to the homes in which they live. It is an important part of the response to the horrific events at Grenfell Tower five years ago. The Bill goes a long way to address constructively some of the key issues that matter most to residents and social housing providers, including quality of services, safety and performance.

I declare an interest as chair of the National Housing Federation, the trade body for England’s housing associations, a position I have held since 2015. During my tenure in this role, which draws to a close in September, I have been privileged to see first-hand the ways housing associations work tirelessly to deliver good-quality, secure housing for millions of people across the country. The important role that housing associations and social housing can play in every community was highlighted to me during the pandemic, when the sector galvanised at speed to keep residents safe, keep vital services operating and protect residents’ financial security by committing to a no-evictions pledge, which is still in place today.

Most strikingly, however, I have seen from what I regard as a brilliant sector a continued and unfailing commitment to learn and improve where services are not meeting residents’ expectations and needs—and that is exactly why the sector stands behind this legislation. Since the very start of the process of developing the social housing White Paper, from those early conversations with the then Housing Minister and tenants across the country following the Grenfell fire, the NHF and its members have been engaged and proactive in seeking change. There was a clear message from tenants that social housing providers were not always living up to the high standards that we rightly expect from that sector, with its long and proud history of housing people in need. We were not always listening to tenants’ views as closely as we could and should, or responding quickly enough to their concerns.

While it may not always have been easy to listen to such criticisms, the sector is now unflinching in recognising where improvements could be made and is always committed to getting things right. In fact, the sector stepped forward without legislation or government policy decisions to develop, along with residents, Together with Tenants, a sector-wide initiative focused on strengthening the relationship between residents and housing association landlords. Based on a four-point plan and charter, the programme has been delivering tangible changes in accountability, transparency and governance across housing associations since its launch in 2019. To date, 207 housing associations are signed up to the programme, covering 83% of all housing association homes. The NHF was pleased to see Together with Tenants referenced in the White Paper. I am confident that the programme has laid excellent foundations on which the regulations brought forward by the Bill can stand securely.

Furthermore, in the last three weeks the sector has taken a huge step forward in tackling issues of poor-quality housing. Earlier this month it was announced that the National Housing Federation and the Chartered Institute of Housing have worked together to set up an independent panel to make swift recommendations to tackle issues of poor-quality housing in the sector. We have seen from reports on ITV News and campaigns on social media that some residents have been badly let down by unacceptable problems with housing quality and poor customer service. The work of the new panel, chaired by Helen Baker, the chair of Shelter and an expert in housing, social care, health and education, will guide housing associations to tackle these problems head-on.

I am proud to say that the NHF and its members embrace a culture of transparency and openness when it comes to performance in dealing with issues that matter to residents, and we want that to be clear, meaningful and inclusive. We are at a critical point for improving many residents’ experience of social housing, and housing associations stand ready to deliver this change.

As I welcome the Bill, I hope the Minister will join me in welcoming the work that housing associations are already doing to drive up standards. Will he commit to continuing to engage closely with housing associations on what I believe to be vital reforms?

Photo of Baroness Hayman Baroness Hayman Crossbench 4:12 pm, 27th June 2022

My Lords, I declare my interest as co-chair of Peers for the Planet, although I have to say I rather like the “commander-in-chief” designation given to me by the noble Lord, Lord Young of Cookham. I am grateful to him and to the noble Lord, Lord Bourne—very distinguished spear-carriers—for their anticipatory support.

As others have said, the Bill aims to offer renters of social housing a range of new regulatory standards and expectations, the need for which the tragedy of Grenfell and the inquiries that followed so clearly demonstrated. However, on one area of the regulator’s existing remit, that social housing should be of “appropriate quality”—that is, energy efficiency—the Bill is silent, yet the warmth and the heating costs of their homes is of crucial importance to tenants, particularly those who live in what the Minister described as damp, cold and unsafe homes. I shall therefore focus my brief comments on the importance of energy efficiency.

Back in November, even ahead of Russia’s invasion of Ukraine, the International Energy Agency reported that it considered energy efficiency to be the “first fuel”, as it still represents the cleanest and, in most cases, cheapest way to meet our energy needs. It also highlighted that there was no plausible pathway to net-zero emissions without using our energy resources much more efficiently. The strength of these arguments has been redoubled following the 54% increase in the energy price cap in April, with an expected further 65% increase in October and analysts saying say that this is going to go on until at least 2030.

However, progress appears to have stalled on energy efficiency, and this Bill does nothing to remedy that. In the Clean Growth Strategy in 2017, we heard of a planned consultation on how social housing can be upgraded to energy performance certificate, or EPC, band C by 2030 where practical, cost-effective and affordable. Four years later, in October 2021, in the heat and buildings strategy, a long-term regulatory standard to improve social housing was still being considered.

This Bill is intended to facilitate a new, proactive approach to regulating social housing on consumer issues such as safety, transparency and tenant engagement, about which we have heard in this debate. The cost of keeping warm is a key consumer issue, and yet tenants of social housing are still waiting for that regulatory standard. Welcome as the drip-feed of funding for selected improvements has been, along with the Government’s promises to learn from schemes that have failed in the past, 35% of social housing remains rated EPC D or below. Increased support for energy efficiency measures would address all three points of what has been called the “energy trilemma”.

On the first issue, affordability, the Building Back Britain Commission, made up of chief executives from some of the UK’s biggest housing groups, has argued that £200 a year could be saved just by improving a home’s energy performance certificate rating of D to C. That sum is equivalent to the originally announced energy bill discount—but every year, rather than a one-off. The CBI has made similar points, with Tony Danker asking whether we want a new normal of energy efficiency, or of billion-pound bailouts every quarter. The Committee on Climate Change has also shown how the capital investment needed to get to net-zero building will more than pay for itself through savings on fuel, healthcare and other costs.

On sustainability, domestic heating accounts for 21% of UK greenhouse gas emissions. The vast majority of homes still rely on natural gas for heating, meaning that every kilowatt hour of energy saved will help us to meet our commitments under the Paris Agreement and our domestic legally binding net-zero target. Regarding homes heated by electricity, it will help by lowering demand in the coldest months of the year, when our museum-piece coal-fired power stations are most often brought out of retirement for additional capacity.

On security of supply and cost, the same considerations apply. Every unit of energy saved will help us to reduce our dependence on imported gas and, indeed, on North Sea oil and gas, which is in any case traded on the global market and priced accordingly.

There is in fact a fourth point: the impact on employment opportunities and levelling up. The Construction Industry Training Board has estimated that net-zero homes will create more than 200,000 new jobs, and energy efficiency retrofits in particular are expected to provide new jobs as an important part of the green recovery. The building back greener commission has also shown that the homes which stand to gain most from government intervention are in areas designated as needing levelling up.

When will the long-term regulatory standard for social housing be brought forward? Will the Government commit to the same trajectory for social housing as they set out for private renters in the heat and buildings strategy? Of course, addressing energy efficiency in social housing is only one part of a necessary wider national strategy to reduce energy demand, but the Government are even further behind on their commitments on social housing compared to other housing types. This Bill provides a perfect opportunity for the Government to put their outstanding public commitments on a statutory footing, setting out a detailed trajectory for meeting them. I look forward to hearing from the Minister a clear plan and timetable for doing so.

Photo of Lord Foster of Bath Lord Foster of Bath Chair, Rural Economy Committee, Chair, Rural Economy Committee 4:19 pm, 27th June 2022

My Lords, as others have said, the Bill is in part a response to the Grenfell Tower fire. I reiterate my condolences to the family and friends of those who died in that tragedy.

On these Benches, we welcome the Bill, although we wish it had been brought before us much earlier. After all, it stems from the Green Paper, A New Deal for Social Housing, which was published almost four years ago. Personally, I particularly welcome the removal of the serious detriment test. I also hope that the regulator and the ombudsman will have sufficient resources to carry out their enhanced responsibilities once the conflicts between their respective roles, raised by the noble Lord, Lord Young of Cookham, have been resolved.

I want to raise just three issues. The first two relate to electrical safety, which I raised during the passage of the then Building Safety Bill when I drew attention to the large number of property fires caused by faulty electrical installations or appliances, some with devastating consequences. As we have heard from the noble Lord, Lord Bourne, in the privately rented sector, it is already a mandatory requirement to have safety checks on electrical installations every five years but there is currently no similar requirement in the social rented sector despite the social housing charter specifically stating this:

“Safety measures in the social sector should be in line with the legal protections afforded to private sector tenants.”

I moved an amendment to the Building Safety Bill to try to rectify this. Sadly, it was rejected at that time by the Government on the grounds that it would lead to an added burden on the new safety regulator and would

“distract it and hinder its success”.—[Official Report, 29/3/22; col. 1403.]

However, in a remarkably short space of time, there has been a welcome change of heart, following the Government’s own working group concluding that five-yearly checks on electrical installations in social housing should take place. As the noble Lord, Lord Bourne, pointed out, consultation is already under way on the details of introducing such a measure.

So, with just one reservation, I warmly welcome Clause 10, which provides powers to the Secretary of State to do so by way of regulation. However, a careful study of Clause 10’s proposed way of achieving this—by amending Section 122 of the Housing and Planning Act 2016—reveals that the Secretary of State does not have to make any changes; merely that he may do so. Will the Minister give an assurance that, following the consultation, the Government will commit to ensuring that “may” becomes “must” so that the pledge to ensure the parity of social tenants with private tenants is honoured?

While faulty electrical installations can cause fires, so, too, can faulty electrical appliances, as was tragically the case in the Grenfell Tower fire. I have previously drawn attention to regulatory deficiencies regarding the safety of electrical appliances. For example, shopkeepers are responsible for the safety of electrical products they sell whereas, under current legislation, online marketplaces are not responsible for the safety of products sold by third parties on their platforms. Again, unfortunately, my amendment to the then Building Safety Bill to rectify this did not find government favour. Yet, with more and more electrical appliances being bought online and evidence that, in London at least, a disproportionate number of electrical fires happen in social homes, the Bill could be a vehicle to address this issue. Will the Minister have another change of heart and consider doing so?

I recognise that some progress is being made. The Government state in paragraph 89 of the consultation paper, previously referred to, that there should be at least a legal requirement for the regular testing of those electrical appliances that are provided by social landlords. Given the clear intention of the Government to do that, can the Minister explain why there is no enabling clause in the Bill? Will he agree to bring forward an appropriate amendment to ensure that there is?

Finally, as many other noble Lords have done, I turn to energy efficiency, so powerfully referred to by the noble Baroness, Lady Hayman, just now. Not least in the current energy crisis, one of the most important ways of improving social housing is by improving the energy efficiency of such properties, thus reducing energy bills and excess winter deaths, and improving the quality of life for residents. As the Minister knows, I have frequently raised the issue of the need for a coherent national plan for energy efficiency in all forms of tenure; this is supported by many organisations. As we know, the Building Back Britain Commission has argued that energy bills could be reduced by £200 every single year just by improving a home’s energy performance certificate rating from D up to C.

As others have done, we recognise that the retrofit industry is needed to deliver this and the Government’s oft-repeated target of getting all fuel-poor homes to EPC band C by 2030, and all others there by 2035. Having been let down so many times, the industry says that it would be much more likely to invest in equipment and training with the certainty provided by putting those targets into legislation. Yet the Government have repeatedly refused to do this; frankly, I still fail to understand why.

More specifically, as we have heard in relation to social housing, in the Heat and Buildings Strategy published last October, the Government said:

“We will … consider setting a long-term regulatory standard to improve social housing to EPC band C, with levers required to decarbonise the stock in line with Net Zero”.

As others have pointed out, the strategy continues:

“We will consult the sector before setting any regulatory standard”.

I join others in expressing real concern that that consultation has not yet started. I hope that the Minister will be able when he winds up to explain why not and tell us when it will commence.

Can he also explain what the legislative process will be to introduce the necessary new regulatory standards once agreement on them has been reached? Surely this Bill is an ideal vehicle for doing so, and an amendment to achieve that would be very welcome. While welcoming this overdue Bill, I believe that there are several missed opportunities, which I hope will be rectified during its passage through your Lordships’ House. I look forward to the Minister’s response.

Photo of Baroness Watkins of Tavistock Baroness Watkins of Tavistock Deputy Chairman of Committees 4:26 pm, 27th June 2022

My Lords, I draw attention to my interests in social housing, in particular as the chair of Look Ahead, a small housing association in London. Like other noble Lords, I warmly welcome this Bill, which will support stronger and more proactive consumer regulations and the inclusion of further health and safety requirements in social housing to protect tenants.

The National Housing Federation provided a very useful briefing for today; it has been detailed by the noble Baroness, Lady Warwick. I particularly want to talk about its recommendations that the Government should seriously consider the potential costs of the ombudsman and regulator in taking on these new responsibilities, and ensure that there is effective funding so that they can conduct them properly. Can the Minister clarify what funding will be made available to ensure that the aims of the Bill can be achieved at pace within sound government structures?

In all the briefings received—including those from Shelter and Electrical Safety First, already referred to by other noble Lords—issues arise with the proposed electricity checks. Will such checks include appliances such as white goods, for example fridges, as well as main electrical installations for sockets and lights? We know—again, as other noble Lords have said—that the Grenfell Tower tragedy was linked to such an issue. New white goods are expensive. What will happen if tenants’ own white goods fail assessments for safety? Will they be removed? How will people afford replacements? These are really important issues for social tenants.

It is clear that social landlords will need sufficient powers to gain access to properties if they are truly to make sure that large buildings are fully assessed for electrical safety. Should safety checks cover leasehold properties in social housing blocks as well as homes that are rented out?

If the new proactive consumer regulation regime is adopted as outlined in the Bill, are the Government confident that the definition of “social rented sector” is sufficiently detailed? The statistics in the Library briefing suggest that the social rented sector provides homes for 4 million households, or, perhaps more importantly, one-sixth of all households. The Bill and briefings received appear to make no mention of shared ownership properties, which are a particular interest of mine, as the Minister knows. Many shared ownership households own only a quarter of their homes and pay social rent to housing associations on the remaining 75%. Is there a need for an amendment to the Bill to clarify the rights and responsibilities of both parties involved in shared ownership, particularly with regard to safety checks and the costs of putting things right? Under current legislation, I suggest that these will fall on the tenant, rather than the housing association, and I would welcome clarity on this.

Other noble Lords spoke eloquently about the positive aspects of the Bill, and it will certainly improve the lots of tenants if enacted. I look forward to working with the Minister and Members on all sides of this House to make revisions in areas where further definitions may improve the Bill, particularly with regard to the rights of shared ownership tenants, many of whom work in the public sector and are already suffering with the cost of inflation, before the mortgage element of their shared ownership increases.

Photo of Baroness Thornhill Baroness Thornhill Liberal Democrat Lords Spokesperson (Housing) 4:30 pm, 27th June 2022

My Lords, I draw the House’s attention to my role as a vice-president of the Local Government Association and a non-executive director of the Hertfordshire Housing Conference. From these Benches, I congratulate the noble Viscount on his maiden speech; I am delighted that he is joining the housing geeks, and I am sure that he will make an excellent contribution.

As always in your Lordships’ House, this has been a thorough and wide-ranging debate, from my noble friend Lord Foster’s comments on electrical safety to the timely reminder of the noble Baroness, Lady Hayman, about the importance of energy efficiency in poverty and quality housing. As ever, many points of detail will emerge during Committee, and I suspect that the Minister will have his hands full.

Many noble Lords have reminded us that the catalyst for this was the tragedy at Grenfell Tower and the subsequent shocking discovery that repeated concerns about fire safety were raised by residents but fell on deaf ears. In week 80 of the inquiry, evidence was found of

“wilful blindness and complacency towards safety”.

Those are strong and shocking words indeed. So all of us who are working on the Bill will work to change such negative cultures and root out and eradicate poor providers.

Conversely, many landlords are good or very good and are already actively changing their performance measures, becoming more transparent and engaging better with their tenants. They have not stood by and waited for the inquiry outcomes or for legislation to be passed, as was detailed by the noble Baroness, Lady Warwick of Undercliffe, in the role that she is, sadly, giving up soon.

Had my noble friend Lady Pinnock been allowed to speak—she was delayed by the same rail problems that have deprived us of the wisdom of the noble Lord, Lord Best—she would have said that we applaud and support much in the Bill. At its heart is the expansion of the powers of the Regulator of Social Housing and the removal of the “serious detriment” test; these are two sides of the same coin and must have equal balance. The removal of the “serious detriment” test is an essential tool to allow intervention before a crisis point, by which time it will or could be too late, as we know and as the right reverend Prelate the Bishop of Chelmsford pointed out.

I note the expanded Housing Ombudsman Service has seen a massive increase in casework, and it may take more than the memorandum of understanding to clarify all the roles and responsibilities and ensure effective partnership working to cut out duplication and overlap. These concerns were forensically dissected by the noble Lord, Lord Young of Cookham. I will also ask how the Government will ensure that both the regulator and the ombudsman have sufficient resourcing to enable them to effectively conduct their duties, as mentioned by the noble Lord, Lord Bourne of Aberystwyth, and the noble Baroness, Lady Watkins, whose comment about shared ownership was particularly pertinent—this was not something that I was aware of, and her points were very well made.

Giving the regulator Ofsted-style powers is fundamental to successful change. From my own experience—it was first introduced while I was assistant head in a large secondary school—I believe that it is the right way to go. At first, it was draconian, top-down, massively intrusive and a heavily judgmental process—a far cry from the friendly old inspectors and advisers we were used to seeing to, but largely ignored. However, it was a very, very necessary change. A key factor in its success was the certain knowledge that there would be very regular inspections, not a one-off so that schools could paper over the cracks, hope for the best during the inspection week and then breathe a sigh of relief when the inspectors left on Friday afternoon. It was known that they would be back and approximately when—it kept us on our toes for years, until we learned to absorb the new normal of continuous improvement and performance management. Therefore, we will be looking to strengthen the Bill along those lines.

I say to the Minister: because it will take time for the regulator to be tooled up with enough trained inspectors and for the whole inspection regime to be established, surely the regulator’s activity will initially prioritise intervention with landlords who are experiencing the most severe challenges. Will the Government then work proactively with the National Housing Federation and the Local Government Association to ensure that there is a proportionate, risk-based and outcomes-focused approach to inspection that satisfies everyone?

During the passage of this Bill, we want to look at broadening the focus of the inspection to also include each provider’s work on homelessness. The inspection process will, of necessity, mean that landlords will focus on what can be measured. We think that the homelessness provision aspect needs to be given some weight in any judgment. Surely it is also part of the regulator’s remit to look closely at why the landlord is failing, and not just to say that it is failing. Is it the endemic culture of the organisation or financial capacity? Each requires very different responses—and that is where the PIPs will be very important. For the former, change takes time, which is why we believe that reviews and more regular inspections will be needed. For the latter, with below-market rents being a very necessary feature of social housing, the reality of each landlord’s financial situation must be recognised.

To support council landlords, will the Government agree to prioritise reforms that remove the financial constraints on councils, including the ability to retain 100% of right-to-buy receipts with no restrictions on their use—I apologise to the Minister for sounding like a broken record on that issue—and reform social rent policy to allow a longer period of annual rent increases for a minimum period of at least 10 years? On the topic of money, it is also worth noting that, while the removal of the fine cap is a deterrent, could the Minister assure us that it is intended to be a penalty of last resort? This is because—as another noble Lord mentioned; I hope I will be forgiven for forgetting whom—tenants will, in effect, be the ones who pay that fine through their rent.

I say to the Minister that it is clear that there is a lot riding on this Bill, which is why we will be looking to put amendments down to look at regular reviews and progress of the whole sector as the years go by. If there is a weakness, we believe that it is around the tenant voice being heard, as was very passionately articulated by the noble Baroness, Lady Wilcox of Newport. Indeed, the residents advisory panel falls far short of a meaningful voice for tenants, and there is a real danger that, as it stands in the Bill, it will effectively just be a short-term token gesture. In this regard, we feel—to use my old teacher parlance—that the Bill could do better.

Finally, I want to put on record that despite the shameful tragedy of Grenfell and other high-profile failures of housing providers, it is still true that millions of people and their families living in one of the sector’s 4.5 million homes are, for the most part, glad to be in this sector rather than the private rented sector. As one resident said to me when I joined her when she moved into her brand-new council house, “I feel like I have won Willy Wonka’s golden ticket—a safe, stable roof over our heads, a rent I can afford and a landlord who appears to listen.” That is, always will be, and must be the sector’s mission. I look forward to working with your Lordships on this important Bill because, sadly, we know that this is not the case across the board or this Bill would not be here today and it would not have the very clear cross-party and outside consensus that it seems to command.

Photo of Baroness Hayman of Ullock Baroness Hayman of Ullock Opposition Whip (Lords), Shadow Spokesperson (Environment, Food and Rural Affairs), Shadow Spokesperson (Levelling Up, Housing, Communities and Local Government) 4:40 pm, 27th June 2022

My Lords, this has been a fairly short but excellent debate on this Bill, enhanced by the really good speech of the noble Viscount, Lord Camrose. I warmly welcome him to this House and look forward to his future contributions.

As my noble friend Lady Wilcox said in her introduction, we welcome this Bill, which, as we have heard, introduces long-overdue changes to social housing regulation some five years after the Grenfell Tower tragedy, where safety concerns raised by residents had been ignored by their landlord. I join the right reverend Prelate the Bishop of Chelmsford in praising the Grenfell campaigners for continuing to press for these much-needed changes to the law.

It is worth noting that, since 2010, the Government have reduced tenant representation, abolishing the Tenant Services Authority, abolishing National Tenant Voice, and removing national funding through the decent homes programme. The Bill today represents a crucial opportunity to put this right. However, while the Bill is very welcome, we also feel it is disappointing that it does not go far enough in putting tenants at the heart of regulation and governance. We believe it needs to focus more on tenant empowerment and representation.

My noble friend Lady Warwick of Undercliffe talked about the important role that housing associations play in providing support to people in need. While many provide good and excellent service, unfortunately that is not the case for all. There needs to be a proactive inspection regime for the Regulator of Social Housing that monitors all providers and not just those it suspects might not be compliant with consumer standards. We believe that the regime announced by the Government falls short of this.

We welcome the key focus of the Bill to enhance the regulator’s consumer standards regulatory regime. Again, as the right reverend Prelate the Bishop of Chelmsford said, we also welcome the removal of the “serious detriment” test, which other noble Lords have mentioned. This is a long-awaited change and will give the regulator more power over consumer standards and broaden the monitoring and enforcement powers.

The Bill enables the RSH to issue a code of practice, as we have heard, for its consumer standards. That will match the approach taken for economic standards. This will help providers have a better idea of what is expected of them and tenants to have a better idea of what to expect from their landlords. However, we believe it should also establish a grading system for these consumer standards, in line with what currently exists for economic standards.

We have heard about the introduction of tenant satisfaction measures. Again, we welcome this, but there must be transparency and accountability throughout the regulatory process, especially since social housing tenants have limited ability to have any choice in their landlord.

We have heard that the Bill enables the RSH to deregister a private registered provider for failing to meet a regulatory standard. We believe this sends an important message to providers but does not offer any additional security or compensation for the tenants of deregistered providers. I ask the Minister: will the Government look at this?

It is important to note that, to raise standards in social housing, new legislation must be properly resourced for the regulator to be truly proactive and to deliver a decent homes standard fit for the future and robust requirements for strong tenant representation within the regulatory system.

We have heard much about tenant representation in today’s debate. The Bill has a greater focus on transparency and making information available to tenants, but transparency alone, although important, is not enough to drive the kind of change that we need to see. The only provision in the Bill that is directly related to tenant representation is the requirement to set up the advisory panel. As my noble friend Lady Wilcox and the noble Baroness, Lady Thornhill, mentioned, we need more than this. I would be interested to know the Minister’s response to the suggestion from the Mayor of London on the creation of a commissioner for social housing to address underrepresentation across the sector and across government. What does the Minister think about that suggestion and whether it would help?

My noble friend Lady Warwick of Undercliffe welcomed the work that housing associations are already carrying out to drive up standards. We absolutely support those housing associations that are doing important work on that aspect. We are also pleased to see that the Bill introduces performance improvement plans and states that tenants can make a written request for a copy of their provider’s performance improvement plan. The Government need to establish a clear communication channel between tenants and the RSH so that tenants can share information about whether and how their landlord has been taking action. As the noble Baroness, Lady Thornhill, said, we need to know where there are failings and why.

We have also heard that the Bill removes the cap on fines and about the Secretary of State’s power to amend the value of fines. This flexibility is welcome, especially as it allows penalties appropriate for the serious harm that tenants may endure as a result of poor standards. However, we also believe that the different thresholds need to be clearly stated so that there can be full, public accountability for any enforcement action. The noble Lord, Lord Bourne of Aberystwyth, asked about costs. Enforcement and inspections will of course need significant resources, so I am interested in the Minister’s response to his questions.

We welcome the Bill’s strong focus on transparency and access to information. Because measures relating to transparency and information are important, keeping tenants informed about landlord performance and governance should be matched with robust requirements for tenants to be able to discuss this with their landlords. We believe that we should have a goal for landlords and tenants to work together to reduce the likelihood of things going wrong in the first place, rather than just retrospective accountability for poor performance.

There has been much discussion about the Housing Ombudsman scheme and the relationship between the ombudsman and the RSH. We know that the Bill puts into law the ombudsman’s code of practice. The noble Baroness, Lady Watkins, asked a number of important questions about resources in this regard and the nature of safety checks and assessments. I look forward to the Minister’s response to her questions.

Confidence in the complaints system is as important as the robustness of the system itself. Complaints handling is itself the second most common complaint to the ombudsman after property condition. Improving the system must be a priority and the ombudsman will need to be properly resourced to deliver this, especially as it has had a significant increase in casework, as referred to by the noble Baroness, Lady Thornhill. I am also particularly interested in the Minister’s response to the question from the noble Lord, Lord Young of Cookham, about the power of the regulator regarding complaints, how that will operate alongside the ombudsman and the potential for any confusion.

We welcome the requirement for registered providers to designate a person to act as lead on the provider’s compliance with its health and safety obligations towards tenants. This is very important.

Finally, a number of noble Lords talked about electrical safety standards, particularly the noble Lord, Lord Foster of Bath, who I know has an interest in this. We welcome the proposal in the Bill to impose electrical safety duties on registered providers to ensure that safety standards are met when premises are occupied under a tenancy. The noble Baroness, Lady Hayman, highlighted the importance of pushing for energy efficiency in social housing. This is increasingly essential; as she said, social housing often has very poor ratings for energy efficiency and, as we look at the increased costs of energy and the increase in fuel poverty, we really need to tackle this, both to support people who are struggling to make ends meet at the moment but also as a crucial step to achieve net zero. As the noble Lord, Lord Young, asked, will energy efficiency therefore be included in the code of practice? This is very important and I think would have support from right across the House. I look forward to the Minister’s response and to working with him and other noble Lords to improve the Bill as it progresses through your Lordships’ House.

Photo of Lord Greenhalgh Lord Greenhalgh The Minister of State, Home Department, Minister of State (Department for Levelling Up, Housing and Communities) 4:50 pm, 27th June 2022

My Lords, I thank everyone across the Chamber for contributing so constructively to the spirited and very wide-ranging Second Reading. The debate once again highlighted the breadth and depth of noble Lords’ expertise and I congratulate my noble friend Lord Camrose on an excellent maiden speech. He comes with really practical skills—probably more practical than the scribblers out there, even though his family includes very distinguished owners of many of the titles that many of us read today. I am looking forward to his measured and thoughtful contributions to this House over the coming years.

Across all the contributions today there has been a consistent concern to ensure that tenants of social housing receive the housing and respect that they deserve. I share this concern. The Bill will deliver extensive and much-needed reforms. It will continue to drive forward the once-in-a-generation change required to make sure that tenants live in decent, safe and secure homes and are treated with respect. I join the noble Baroness, Lady Hayman of Ullock, in praising the contribution of the Grenfell community in advancing this important agenda. I will do my very best to address as many of the points raised as I can—again, this has been an incredibly wide-ranging debate.

A number of questions focused on the supply of social housing, including the contributions from the right reverend Prelate the Bishop of Chelmsford and the noble Baroness, Lady Wilcox. This legislation is not about supply, as I think they both realised, but we are committed to increasing the supply of affordable homes. We have invested more than £12 billion in affordable housing over the five years, but we recognise the need to build more social rented housing, which is why this current programme of affordable housing is seeking to double the number of social homes we are building to 32,000. I noticed the focus in the excellent speech by the noble Baroness, Lady Wilcox, on the decent homes standard. There is no greater sign that the Government recognise the importance of the decent homes standard than trying to extend it into the private rented sector. It is about raising quality, irrespective of whether you are a social tenant or a private tenant, so we improve quality in the round.

In response to the noble Baronesses, Lady Warwick and Lady Thornhill, I undertake that we will continue as a Government to work closely and engage closely with both the National Housing Federation and the Local Government Association as we bring forward these reforms and improve regulation.

A number of noble Lords, in particular the noble Baroness, Lady Wilcox, raised the issue of why it has taken so long to introduce the Bill. We have to recognise that the Bill is just one of many reforms that the Government have delivered in response to Grenfell Tower, including the Building Safety Act and last year’s Fire Safety Act. We spent time listening to residents, as pointed out by my noble friend Lord Camrose. We had to hear at first hand about their experiences and how they wanted a sea-change. More than 8,000 residents contributed to these discussions, including the bereaved, survivors and residents of the Grenfell Tower tragedy. There has been a process: a social housing White Paper, which we consulted on, then we responded to the consultation, and now we are moving to legislation. It is important to get these things right.

A number of noble Lords asked about funding for the new regulatory regime, including the noble Baronesses, Lady Wilcox, Lady Watkins and Lady Thornhill, and my noble friend Lord Bourne. We are making significant changes to the regulator, which will drive change in the sector and improve the lives of social housing residents. Given the scale of reform, it is likely that the regulator will need to double in size to deliver the strengthened consumer regulation regime. Further work will be carried out to determine the exact cost of delivering the new consumer regulation regime, in part because the regulator will need to design and consult on the new regulatory framework following the passage of this Bill.

However, the Government are committed to ensuring that the regulator has the resources it needs, both to deliver the new consumer regulation regime and to continue effectively regulating on its economic objectives. A new fees regime will need to be developed for when the new consumer regime has been implemented. This will be subject to engagement and formal consultation with stakeholders. Government policy is to maximise the recovery of costs through fees in the same way that the regulator already does.

As the right reverend Prelate the Bishop of Chelmsford raised, issuing fines is one of the enforcement powers the regulator can use. It is not the only one, and it is for the regulator to decide on the appropriate sanction depending on the circumstances. Government rent policy limits the maximum amount of rent that the social landlord can charge, subject to certain exceptions. It is down to the regulator to get the system of enforcement right, and there are protections on rent levels.

I point out to the noble Lord, Lord Foster, in particular that the vast majority of the cost associated with this regulation, estimated at some £174 million, is largely a result of the requirements on providers to perform five-yearly electrical safety checks. That is certainly the largest source of cost. I know that he, in exhorting me to move from “may” to “must”, recognises that we do not want to pre-empt the consultation on electrical safety measures for social housing. However, we are obviously looking at the financial impact of that and would not be putting those powers in the Bill if we were not very serious in our intention to level up between private and public housing.

The noble Baroness, Lady Watkins, asked a difficult question about how the electrical safety power and associated costs affect shared ownership properties. I was scratching my head; I undertake to write to her with details on this critical issue.

The noble Baronesses, Lady Wilcox, Lady Thornhill and Lady Hayman of Ullock raised the issue of how we listen to tenants’ voices. We launched this social housing quality resident panel only in March, which brings together social housing residents from across the country so that they can share their views with government and Ministers. Let us see how that plays out. However, I note that the Mayor of London has called for a commission. We will look at that seriously and, I am sure, respond to those points.

The noble Baroness, Lady Wilcox, has really been into the details of this Bill. She wanted to know how we focus inspections and why small landlords will not be inspected. The system of inspections will be based on risk profile to ensure that those landlords at greatest risk of failing, or whose failure might have the greatest impact on tenants, are subject to greatest oversight, which makes sense to me. The regulator will continue to develop its approach and the details of how it will manage consumer inspections.

My noble friend Lord Young, who is forensic in his analysis of all housing legislation, asked why this advisory panel needs to be statutory. Placing the requirement in statute ensures that this happens. It also sets out expectations on the make-up of the panel and the range of matters it would consider. I believe it is sensible to ensure through legislation that this happens, rather than relying on the regulator choosing to do so. In other words, we are making sure that there is no way out and that this will happen.

In my meeting before today’s debate and during it, my noble friend Lord Young raised the confusion between the Housing Ombudsman and the Regulator of Social Housing. The Regulator of Social Housing has the emergency repair power. I point out that there is a long track record of close working between the regulator and the ombudsman, and we are ensuring effective information sharing between them. The proposals in the Bill will reinforce and strengthen the co-operation that already exists. We are also delivering a communications campaign to tenants so that they know where to go and are well informed.

There were a series of important contributions from the noble Baroness, Lady Hayman, the noble Lord, Lord Foster, and my noble friend Lord Young about what has happened to the government consultation on energy efficiency and what the Government are generally doing in this important area, particularly with respect to social housing. The Government agree that improving the energy efficiency of homes is a must. In the 2021 Heat and Buildings Strategy, we committed to consider setting a long-term regulatory standard to improve social housing to EPC band C, and we will consult the sector before setting any standard. The Government have committed some £3.8 billion to the social housing decarbonisation fund, which will help councils and housing associations to upgrade social housing. In fact, Lancaster West Residents’ Association has been a beneficiary of that fund.

I have to say that the noble Baroness, Lady Thornhill, is incredibly dogged and has raised right to buy on pretty much every occasion, certainly in recent weeks. I know that a number of your Lordships are concerned about the impact of right to buy on social housing stock. The Government agree that it is important that homes sold under right to buy are replaced, and we want to see an increase in the number of replacement homes sold by local authorities. Following a consultation on the use of right-to-buy receipts, the Government introduced a package of reforms in 2021 to help local authorities build more homes. This set of reforms, combined with the abolition of the borrowing cap in 2018, certainly gives councils more flexibility to build council homes. That is what we are seeing: councils are building more council homes. With regard to the replacement of homes sold under the extension of right to buy to housing associations, tenants will be central to the scheme design. I am sure that the replacement of stock sold through that voluntary scheme will be foremost in getting the scheme right.

The noble Baroness, Lady Hayman of Ullock, raised the issue of tenant satisfaction measures. We believe that these measures provide a snapshot of a landlord’s performance, so they will not include everything. I know that the regulator has worked with the sector, the National Housing Federation and others in developing a balanced set of tenant satisfaction measures that cover the issues that tenants have told us were important to them.

The noble Baroness, Lady Hayman of Ullock, asked a very specific question about whether the Government are looking at compensation for deregistered registered providers. I will take this important issue back to the department, as I do not have an answer here and now.

With regard to the focus on including net zero in the decent homes standard, as I said, we committed in the Heat and Buildings Strategy to consider setting a long-term regulatory standard to improve social housing to EPC band C. We will consult the sector before setting that standard, as I said in an earlier response.

It has been an incredibly wide-ranging debate, but I thank noble Lords, because I think there is a genuine desire to get behind the Bill to make sure that the voices of tenants are heard. I am sure there will be many opportunities to come up with practical proposals. Having taken forward legislation in this area, I look forward to working with those on all sides of the House to get this important legislation right and I beg to move.

Bill read a second time and committed to a Grand Committee.