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

Part of the debate – in the House of Lords at 4:50 pm on 27th June 2022.

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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.