Social Housing (Regulation) Bill [HL] - Committee

– in the House of Lords at 3:20 pm on 6th September 2022.

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Clause 1: Fundamental objectives

1: Clause 1, page 1, line 5, after “safe” insert “, energy efficient”Member's explanatory statementThis amendment would require the fundamental objectives to include reference to energy efficiency

Photo of Baroness Pinnock Baroness Pinnock Liberal Democrat Lords Spokesperson (Levelling Up, Communities and Local Government)

My Lords, I draw the attention of the House to my relevant interests as a vice-president of the Local Government Association and as a councillor. I apologise to the House that, due to train delays, I was unable to speak at Second Reading, though I was here for most of that debate, bar for about three minutes.

This Bill is broadly accepted—certainly by those of us on our Benches—but there are some additions which we think would make it better. Back in July, when my noble friend Lady Thornhill and I tabled this amendment on energy efficiency, little did we know that the issue would be even more in the public eye and even more important to address in a strategic way. The amendment, which adds the words “energy efficient” to the fundamental objectives set out in Clause 1, must surely now be a priority for any Government.

Our country’s energy security is finally at the heart of government thinking. The cost of energy for tenants—many of whom will be among those with the lowest incomes—means that they will be completely unable to meet their basic needs. Improving energy efficiency is one of the key planks of a longer-term strategy to ensure energy at a cost that can be afforded. As this is undeniably the case, I hope that the Minister will be able to accept the amendment.

Houses in Britain are some of the worst insulated in Europe—it is shameful to have to say that, but it is true. The Government aim to improve the energy efficiency of homes, but what appears to be lacking is a practical plan to achieve those absolutely essential improvements.

The properties in the social housing sector will, in the main, have been built post-1920, when cavity walls became the norm. One-third of heat loss is through walls. Prior to 1990, cavity wall insulation was not the norm, although it can be done relatively easily. Ensuring that loft insulation is 300 millimetres deep—the current new-build standard—will also help, as will double glazing, although the majority of properties will already have double glazing, albeit at the lower efficient level installed at the time. The Government have the stated intention of exchanging gas boilers for heat pumps, which are effective only with very well insulated homes. Therefore, achieving more energy-efficient social housing should be a priority, which is the purpose of the simple amendment that we have laid today.

Achieving better energy efficiency is not difficult if there is a will to do so. When I was leader of Kirklees Council, about 15 years ago we had what we called the warm zone scheme, which provided free loft and cavity wall insulation to all homes, regardless of tenure—not just social housing but all homes—and which was part- funded by a levy on energy companies. In total, nearly 100,000 homes benefited. If it was that easy to do—to be honest, it was not that difficult—it can be done now on a nationwide basis, and ought to be done. It is practical but will happen only if the sector is required to make it a priority; hence the purpose of the amendment.

This amendment is about the principle of energy efficiency, and Amendment 21, in the name of the noble Baroness, Lady Hayman, is much more detailed in nature and provides specific targets for energy efficiency, which of course we will support wholeheartedly.

I also wish to speak to Amendment 4 to Clause 1, which is also in my name and that of my noble friend Lady Thornhill. The purpose of this amendment is to provide the regulator with a duty to report on the removal of unsafe cladding and the remediation of fire safety defects in social housing. Members of the Committee may be thinking that the issue of unsafe cladding and other fire safety defects has been resolved; the solution was the Building Safety Act. Unfortunately, there are many unresolved problems, and for the social housing sector the challenge is that of the lack of funding for dealing with essential remediations.

The National Housing Federation estimated earlier this year that remediation costs for its sector will be about £10 billion and for social housing owned by local authorities a further £8 billion. Social housing landlords do not have access to funding for non-ACM cladding removal—so there is no funding for the other fire safety defects. There is also no funding to cover costs for tenants in the same way as there is for leaseholders. One of the consequences is that tenants, through their rents, will be contributing to the cost of remediation.

Imposing the cost of remediation on social housing landlords obviously has knock-on effects on plans for other refurbishment, or could even stall plans for new homes. An excellent research paper from the House of Commons Library was published in June on this issue, from which I got some of that information.

The aim of the Bill is a good one: to ensure safe homes in the social housing sector. Fire safety cannot be ignored as being too expensive or too difficult. As we know, tragically, ignoring fire safety costs lives. I urge the Minister to accept this amendment to provide regular assurance that fire and building safety remediation work is being completed in the social housing sector. With that, I look forward to the rest of the debate on this group of amendments, which are fundamental to getting improvements to an otherwise sound Bill. I beg to move.

Photo of Baroness Hayman Baroness Hayman Crossbench 3:30 pm, 6th September 2022

My Lords, it may be helpful to the Committee to continue the theme of energy efficiency, rather than going through the amendments numerically, so I will do so. I declare my interest as co-chair of Peers for the Planet. As the noble Baroness, Lady Pinnock, said, I have Amendment 21 in this group, and I am very grateful for the support of the noble Lords, Lord Bourne of Aberystwyth and Lord Foster of Bath, who have added their names to it.

At Second Reading of the Bill in July, there was similar support from across the House—on all Benches—for action on energy efficiency in the social housing stock. The Minister himself described action as a “must”, but I am afraid he stopped there in describing how that action would actually be implemented. As the noble Baroness, Lady Pinnock, said, social housing tenants are among the most vulnerable in the current energy crisis. The Government’s own most recent data shows that 72% of new lead tenants were not in employment; 20% of new lettings were reserved to those who were statutorily homeless. Research by the Energy and Climate Intelligence Unit shows that houses in EPC band D, which are 35% of social housing, will pay £600 more a year under the cap as it is at the moment than those in band C, and forecasts from Cornwall Insight suggest that that could be doubled next year.

The money that we are led to believe will be spent in subsidising—paying for—those bills is money that literally goes up in smoke. The money spent on home insulation and energy efficiency is money that does not have to be spent year after year when we have an energy price crisis. This was recognised by the Government in the clean growth strategy in 2017, when they committed to consultation on minimum energy performance standards in social housing, but we have seen no plan—not even a consultation on a plan or a plan on a consultation. Hence the need to take action in the Bill to put the requirement in primary legislation and get moving with doing this.

As the noble Baroness said, this amendment is more detailed than hers. We have framed it as a duty on the Government to publish a strategy. I hope that others will agree that this is the most appropriate approach. It should not be a duty on social housing providers to improve properties without any government support, nor a duty on government to go into properties that they do not own and forcibly improve them without landlord and tenant consent. A duty for a strategy will require input from social housing providers, tenants and community groups and the specialist and general firms who carry out the work.

The amendment is relatively simple. Proposed new subsection (1) gives the social housing regulator the power to set standards in relation to energy demand—a slightly different approach from that in Amendment 1 —and requires the regulator to have regard to the Government’s strategy on this topic when it does so. Proposed new subsection (2), which is the meat of it, requires the Government to set out an energy reduction strategy, with four key points.

The first is the rollout of low-carbon heat, so that it accounts for 100% of installations by 2035. The low-carbon heat could equally well come from heat pumps or local heat networks. This is simply putting a commitment that the Government have already made, but are not making a lot of progress with, on a statutory footing.

The second is an EPC rating of C for all social housing properties by 2028. The Committee on Climate Change has recommended that year; the Government have suggested 2030, but it is important that we make progress now.

The third point is to have interim targets for the first two points. We have all seen the dangers of putting very high-level commitments out in principle while not seeing any plan for their implementation and no milestone so that we can tell how far we are going. Interim targets would give transparency for tracking the government target for energy-efficiency improvements made each year and would maintain momentum.

The fourth point is a plan to support social housing providers in engaging with one another, the social housing regulator, and a single source of government advice. This is really important. One of the things that people are flailing around for is the best way to do things in the current crisis. It is tremendously important that the Government, who have referred to providing a source of advice, do so urgently, so that we do not all reinvent wheels all over the place. Proposed new subsection (3) requires the Government to consult the Climate Change Committee, which has significant expertise in this area, when producing their strategy—another belt and braces to ensure that we are making progress.

Ideally, we would be tackling energy efficiency across all fields. There is a huge gain to be made there. The noble Lords, Lord Bourne of Aberystwyth and Lord Whitty, and I will be tabling amendments to the Energy Bill for a broader government strategy. However, we can and should make progress now with this particularly vulnerable group of people. As I said, 2017 was the first time that this was mooted by the Government. The adage is that the best time to plant a tree is 10 years ago. The best time to have begun this strategy was five years ago, but the second-best time to plant a tree is today. I hope that the Minister will respond by doing this now.

Photo of Lord Bourne of Aberystwyth Lord Bourne of Aberystwyth Conservative

My Lords, it is a great pleasure to follow the noble Baroness, Lady Hayman, and to support her in this amendment, along with the noble Lord, Lord Foster of Bath, who has also added his name to it. I declare my interests as published in the register. I am also a member of Peers for the Planet. It sounds like saying that I am a member of Alcoholics Anonymous, not that I have ever had to do that. This is an extremely important amendment.

As has been noted, at Second Reading there was very strong support from around the House for the Bill’s objectives, and I am clear that that will remain the case. There is also strong support from around the Committee for the Government’s commitment to achieving net zero, and for the work of the Committee on Climate Change. What we need to do, through this legislation, is provide some heft to that commitment, because what is lacking, as the noble Baroness noted, is a road map to take us to the very noble aim of net zero. As the noble Baroness, Lady Pinnock, rightly said, since Second Reading, it has become even more evident how important this is—in very graphic terms, with the eye-watering price of energy and energy security centre stage following the dreadful situation in Ukraine. I think that is recognised by the incoming Prime Minister, but I say to the Minister, who has a long list of things to take up with the incoming Prime Minister and Ministers, that this is an opportunity for a very early demonstration of this Government’s commitment to tackling this very serious issue by tackling not just climate change but the energy security issue and, not least, the eye-watering cost of energy that we face currently.

At this juncture it is clear, as clear as it can be, that any action to reduce energy demand is sensible and vital. As is often said, the energy that is cheapest is the energy that we do not use. One thing we can perhaps take some comfort from, in a slightly bizarre way, is that we have got more ground to make up in this country than many other countries in relation to energy efficiency. There is a lot we can be doing; there is massive scope for energy efficiency and, indeed, for demand reduction, which this amendment is geared to. By reducing energy demand, we contribute to the fight for net zero, we contribute to helping ease the massive cost of energy and we also contribute to our energy security. These three pillars are all vital in this battle, and this amendment—a very modest amendment, really—would contribute to all three. The commitment to the low-carbon heat target of 100% of new installations of heating appliances and a minimum EPC rating of C for all social housing is, I believe, achievable and vital.

I appeal to the Government to come forward with a positive programme of engagement with social housing landlords, and advice, also very sensible and provided for in this amendment. I am sure it would have support from all corners of the Committee and would contribute in a very positive way to something that we know our country needs to do. I trust that the Government will demonstrate their commitment to net zero, to easing the cost of energy and to achieving energy security by supporting this amendment. It is a practical, pragmatic, sensible response to the energy crisis, will be seen as such, and will be seen as an early demonstration of the commitment of this Government. So I hope that is what the Minister will say when she responds to this group of amendments.

Photo of Lord Foster of Bath Lord Foster of Bath Liberal Democrat

My Lords, I begin, as I did at Second Reading, by reminding noble Lords that this Bill is part of the response to the Grenfell Tower fire. Yet again, I offer my condolences to the families and friends of those who lost their lives in that dreadful tragedy. I support all the amendments in this group, including Amendment 21, which carries my name alongside those of the noble Baroness, Lady Hayman, and the noble Lord, Lord Bourne, both of whom have done excellent work in these areas over several years. I also support the amendments from my noble friends Lady Thornhill and Lady Pinnock, and of course I particularly support the amendment from the noble Lord, Lord Best, whose work on housing over many years has been inspirational.

Millions of families live in social housing. They are often the least well off and impacted the most by the current rocketing energy prices. We have something like 15 million homes, across all forms of tenure, that are below energy performance certificate band C; in other words, we have 15 million homes that are inadequately insulated, and many of them are in the social housing sector. As a Times article said a week ago:

“Our latest analysis, published today in partnership with economists at the CEBR, underlines the scale of the growing energy efficiency divide in Britain. From October, the two thirds of households living in homes rated below the government’s target EPC C rating, are set to pay £748 more per year for their energy than the third living in homes at or above the threshold.”

As the Minister knows, I have, through two Private Members’ Bills, one of them still awaiting a Committee stage—I hope she might help me out with that—and amendments to other pieces of legislation, frequently raised the need for the Government to place their own already agreed targets for improving energy efficiency into legislation to give the industry, so badly let down by previous schemes, the confidence it needs to invest in the technology, skills and equipment to achieve this. Like the noble Baroness, Lady Hayman, and others, I have tabled amendments to the Energy Bill to seek to achieve that.

However, for this Bill too we need to set a clear focus on these issues. Energy efficiency should indeed be a fundamental objective of this Bill and we need a strategy for energy demand reduction. After all, the alternatives—some palatable, others frankly less so—from renewables and further drilling in the North Sea to nuclear and fracking, cannot, perhaps with the exception of solar, deliver increased energy supplies for several years to come. The crisis is now, which is why I believe we should stop homes leaking heat with a crash programme of energy efficiency, which, as the noble Baroness, Lady Hayman, said, will reduce fuel bills for years to come.

Unfortunately, the situation on home energy insulation is, frankly, dire. Just a week ago, on 30 August, the Independent pointed out:

“Home insulation installations have plunged by 50 per cent this year as the government wound down a failing grant scheme, new figures reveal, adding to the pain of rocketing energy bills. Ministers are accused of failing to take basic measures to help people cut their energy use”.

The article continues:

“Just 126,131 homes received help with work such as loft and cavity wall insulation through the Energy Company Obligation scheme in the first six months of 2022”— a 51% fall on the number of installations carried out in the same period last year, which itself followed a “shocking” decade of failure to act, as climate experts have claimed. As the article notes, Doug Parr, policy director at the campaign group Greenpeace, said:

“It’s frankly astonishing that this dip in insulation rates comes at exactly the time we should be ramping up this proven, long-term solution to the cost of living crisis.”

Mike Childs from Friends of the Earth said:

“This winter, millions of households will be paying sky-high bills for heat that will simply escape through roofs, walls and draughty windows and doors. The next prime minister must make energy efficiency a top priority”.

It is interesting to see that traditionally Conservative-supporting newspapers are particularly depressed by the current Government’s failure in this regard. On 28 August, the Sun, under the heading:

“The energy crisis alone should make it obvious that we cannot afford to waste a single kilowatt” said that

“it is shocking to find the number of homes being padded out to reduce heat loss has more than halved this year. And the number of insulation installations being carried out is at its lowest since 2018. Householders faced with astronomical heating costs need lagging for their homes, not a government lagging behind.”

Even the Telegraph, on 31 August, drew attention to the disproportionate energy cost rises for those living in poorly insulated homes compared with those in better-insulated ones.

I genuinely believe that the case for making energy efficiency a fundamental objective of this Bill and for establishing a proper strategy for demand reduction is overwhelming. I support the amendments that call for that, as I do the other amendments in the group.

Photo of Baroness Jones of Moulsecoomb Baroness Jones of Moulsecoomb Green 3:45 pm, 6th September 2022

My Lords, I want to speak about energy efficiency as well, because clearly this is something that no one can disagree with. It is smart and, at the very least, good business practice—not to mention that it helps people on very low incomes.

As the noble Baroness, Lady Hayman, pointed out, social housing landlords have a huge challenge to raise the energy efficiency of the homes they look after and to bring them up to modern standards, simply because they do not have the money. If the Government are not going to give them a handout or ease the energy crisis in all sorts of ways, they need to make it possible and to make funding less incredibly difficult. The situation is getting worse day by day, as supply chain issues and the rate of inflation keep shooting up.

At the moment, the main source of funding for social housing improvements seems to be borrowing against future income from social rents. This means a very tight pot of funding, where energy-efficiency measures have to compete against issues such as maintenance, renovation and new home building. The Government could create new fundraising opportunities for local authorities. Some of this could be grant funding but there are other options too, such as facilitating the creation of climate bonds and other sorts of financing.

I hope that tackling this funding gap for social housing is a priority of this Government. It would help so many people. I look forward to the Minister sharing the Government’s plans and, I hope, bringing forward something on this issue on Report.

Photo of Lord Whitty Lord Whitty Labour

My Lords, I want to briefly record my support for the intent of all these amendments for both social and environmental reasons. The tenants of social landlords need to be prioritised by improving their energy efficiency, and hence cutting their bills. Because it is a significant proportion of our housing stock, to meet the net-zero pathway it is necessary for the social housing sector to make a step change in the improvement of its premises.

To achieve that, there are responsibilities on government, not least in pursuing the strategy that the speech and amendment from the noble Baroness, Lady Hayman, address, but there are wider responsibilities on government to create the overall policy and the legislative and regulatory framework to ensure that it is delivered. There are also responsibilities on social landlords, and that should be made explicit to them, but the Bill is primarily about the regulator. The regulator’s central duty ought to include energy-efficiency objectives. I regard that as an important missing dimension of the Bill. I would argue this in relation to almost any other legislation, in any field, that changes or introduces new regulation. We need a net-zero objective in our social and economic regulators’ responsibilities and terms of reference.

I have a couple of questions for the Minister. When pursued on energy-efficiency matters on the Energy Bill and in other contexts, her noble friend and colleague, the noble Lord, Lord Callanan, often says that part of the Government’s solution is to fund the programme of improving social housing. I find it difficult to say that that is sufficient. Does the Minister know what proportion of the totality of social housing premises, or whatever subset of that she has information on—large estates, in particular—has been addressed since the Government’s intention that social housing’s energy efficiency be improved, both by insulation and by the source of its energy, became clear? If she does not have that information today, perhaps her department and BEIS could provide me with an answer.

The second question is on planning, which clearly is within her department’s responsibility. Many social housing estates, mainly in the local authority but also in some housing association areas, are faced with major schemes of regeneration. Too often, in my view, local authorities and developers, when faced with demands or requests for regeneration, opt for demolition and rebuild. In almost all cases, demolition in each of its stages and the rebuild have a larger carbon content than most schemes of refurbishment. When will the planning process address this and ensure that it is a central issue for those planning authorities faced with propositions from social landlords?

Photo of Baroness Thornhill Baroness Thornhill Liberal Democrat Lords Spokesperson (Housing)

My Lords, I will speak to Amendment 2 in my name and that of my noble friend Lady Pinnock. I wish also to echo from these Benches the support for the amendment in the name of the inspirational—I agree with that—noble Lord, Lord Best, on the same topic. The fundamental difference between the two amendments is simply that our amendment to Clause 1 would make it a fundamental objective of the Bill, while the noble Lord’s amendment seeks to ensure that the regulator has the powers to require housing associations to safeguard and promote the interests of the homeless and potentially homeless. Therefore, I am pleased to say that they work very well together.

We are seeking this simple amendment as a fundamental objective because, without it, there is a real danger that, as the Government quite rightly and understandably tighten the regulation of social housing as outlined in the Bill, social housing providers themselves, many of whom are fairly cash-strapped, will prioritise that which is being measured for fear of being named, shamed and fined. So they should, you might say, but it will have consequences for the homeless and those in temporary accommodation. This is a phenomenon that has been experienced with former council inspections and with Ofsted.

The fact that several housing associations have formed themselves into their own group, known as Homes for Cathy, shows that many take their homelessness prevention work seriously and strive to house people away from the streets, sofas and the overcrowded conditions that they might currently live in. Quite simply, we believe that this work is significant, valuable and essential, and therefore should be monitored by the regulator as part of a provider’s performance improvement plan.

During the pandemic, heroic efforts were made by government, councils, voluntary groups and housing providers to significantly reduce the numbers sleeping rough, which according to the 2022 government figures stand at an eight-year low. This is to be commended and is indeed good news, but we have to set it against the same set of annual figures that show that the numbers in temporary housing have been rising steadily since 2011. There are over 96,000 households in such accommodation as of September last year. Extremely worryingly, that figure includes over 121,000 children. We are all aware of the negative impacts this leads to, not only on a child’s education but on their general health and well-being.

Regrettably, I know from personal experience that the quality of that accommodation has deteriorated due to several factors, not least the inexorable decline in the number of social homes being built to move families on to; that is a debate for another day but a relevant factor. I will never forget the day that my head of housing came to see me urgently. Knowing that I was proud of our record of never having to use bed and breakfasts for homeless families, she was not looking forward to telling the mayor that that day we were placing families into a hotel for the very first time. Such were the pressures mounting on our housing stock. Now it is commonplace for councils to use bed and breakfasts, hotels and hostels—albeit the time for that is now limited by statute—before a move to temporary accommodation, which is when other problems begin.

Temporary accommodation, sad to say, is often inadequate—a room in a shared house that is overcrowded and in need of repairs or in poor condition. Critically, it can even be in another town, miles away from your workplace or children’s schools. It is not unusual for families to be in temporary accommodation for years. Shelter and the LGA have evidence of some families being housed in this way for a decade or more. That has to be unacceptable. Getting people off the street and out of temporary accommodation are two sides of the same coin. That should be an important function of all providers; we need it to be.

The key reason for putting this homelessness provision in the Bill as a key objective is that the situation is only going to get worse. Analysis by Heriot-Watt University projects that the current number of those experiencing rough sleeping is set to increase, particularly as market rents continue to diverge from local housing allowance levels, which are not rising with inflation as they are currently frozen. We do not need to be experts to work out that the current cost of living crisis will make the situation worse as residents inevitably fall behind in their rent, deferring those payments as they prioritise food and heating as more immediate needs.

We want the amendment to evidence the Government’s —I like the phrase used by the noble Lord, Lord Bourne —heft and commitment to this. Without that, we believe that this will not get measured, and we will inevitably get only what is being measured. Society cannot afford any reduction in this work, so pressure must be maintained and support given. We cannot afford for social housing providers to start to play down this work.

Many providers already do this work and are proud of it, and need recognition that this work is valued and essential. The recent report on the Bill by the House of Commons Levelling Up, Housing and Communities Select Committee regrettably suggested that some providers are already moving away from their social objectives. Enshrining this amendment as an objective should ensure that housing associations maintain a reasonable focus on homelessness activities and monitor such information on lettings to homeless households, evictions and tenancy-sustainment work. We hope the Government will support the amendment, as I think it will give a real filter on the true housing crisis that we all know exists.

Photo of Lord Best Lord Best Crossbench 4:00 pm, 6th September 2022

My Lords, I shall speak to Amendment 22 in this group. It links to and complements Amendment 2, just spoken to by the noble Baroness, Lady Thornhill. The two together underscore the role of social housing regulation in securing accommodation for those who are homeless or are likely soon to be so.

Like the noble Baroness, Lady Pinnock, I apologise on behalf of LNER for arriving too late to speak at Second Reading. I hope your Lordships will forgive me adding an introductory preface to my advocacy for the amendment.

I have spent well over 50 years supporting the social housing sector and have been both on the receiving end of social housing regulation and a participant in regulatory policy-making. From these perspectives, I recognise that poorly designed regulation can interfere with the independence, freedom, flexibility and diversity of approaches of social housing providers, but a bigger part of me recognises that a well-designed regulatory system is a positive. By ensuring adherence to good standards, regulation enhances the sector’s support from its residents, central and local government, investors, partners and the wider public. That is why I welcome the Bill. Indeed, an effective system of regulation is essential if the sector is to grow, as it must, to meet the desperate need for more decent and affordable homes.

This brings me to the first of the two amendments I am putting forward today. Amendment 22 takes us to the heart of why we have a social housing sector in the first place and to the role of regulation in ensuring these providers fulfil the most pressing of the roles which society expects of them. Amendment 2, put forward by the noble Baronesses, Lady Pinnock and Lady Thornhill, makes addressing homelessness issues part of the objectives of the regulator. Amendment 22 enables the regulator to require social housing landlords to comply with standards it sets regarding homeless and potentially homeless households.

The amendment is being sought by a group of over 100 housing associations and other housing charities called Homes for Cathy, which is led by David Bogle of Hightown Housing Association. Many of your Lordships will hear the echoes of the famous documentary drama “Cathy Come Home”, which revealed the horrors of becoming homeless back in 1966. The programme inspired many of us to get involved in social housing. Several of the organisations in Homes for Cathy today were established at that time to rescue people from homelessness and prevent households suffering the horrors of homelessness. Sadly, as we all know so well, this problem is still with us.

The Government are committed to ending street homelessness by 2024 and great progress was made by local authorities and social housing bodies during the height of the pandemic. Today we heard from the noble Baroness, Lady Bloomfield of Hinton Waldrist, via email about renewed efforts to end rough sleeping, which I greatly welcome. Meanwhile, the number of homeless and would-be homeless who have had to be placed in temporary accommodation has grown alarmingly, as the noble Baroness, Lady Thornhill, has mentioned.

It may seem obvious that social housing landlords should be expected to ease the problems of homeless families. Doing so is surely a key reason for the taxpayer supporting the sector. No one believes that the private rented sector can supply the secure homes we need at rents within the means of those on the lowest incomes. Unlike housing associations, councils have legal duties and statutory responsibilities for supporting homeless people. But local authorities—which are strapped for cash and have a hugely diminished stock after right-to-buy sales and after transferring their council housing to registered providers—now rely on the housing associations to help shoulder this task.

It is regrettable that not all the housing associations are doing as much as they could. Critics accuse some of the registered providers of avoiding housing those in the greatest need. In the year before Covid, registered providers evicted 10,000 tenants—effectively creating homelessness problems. Even allowing for the severe financial pressures they face at this difficult time, surely it must remain a key responsibility of housing associations to be meeting the needs of homeless and potentially homeless people.

Amendment 22 gives the regulator the power—not the obligation—to set standards of behaviour for registered providers in relation to safeguarding and promoting the interests of those who are homeless or may become homeless. This does not compel the regulator to do so or prescribe the form its action might take. In Scotland, for example, the Scottish Housing Regulator has placed a duty on social housing providers to report to the regulator on their homelessness activities.

This light-touch addition to the standards, for which the regulator in England can require compliance, seems entirely compatible with the Government’s aims to reduce homelessness. It enables the regulator to hold all the housing associations to account in their fundamental role of addressing the housing problems which the market cannot solve. It responds to the criticism that some parts of the social housing sector have forgotten their social motivations. It recognises the wonderful work many in the sector are doing and it enables the regulator to press all housing associations to do so too.

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)

My Lords, this is an important Bill and it has our support. This is also an important debate, highlighting issues around energy costs and homelessness. Our position is that this is a good and important Bill, but there are areas in which it could be improved. I hope that the Minister is listening carefully to our debates, and I am sure that everyone here hopes to support the Government in making the Bill as good as it can be.

I will speak in support of the amendments on energy efficiency, which, in the light of rising and predicted costs, is clearly critical at the moment. I will first address Amendment 21, in the name of the noble Baroness, Lady Hayman, and of course Amendment 1, in the name of the noble Baroness, Lady Pinnock, which covers the same ground. The noble Baronesses spoke of the importance of tackling issues around energy efficiency. As we heard, the proposed new clause of the noble Baroness, Lady Hayman, requires the Secretary of State to publish a “Social Housing Energy Demand Reduction Strategy”. She went into some detail about how that could be achieved and what it needed to contain in order to help reduce energy consumption, fuel poverty and the emission of greenhouse gases.

The noble Baroness, Lady Hayman, mentioned the Government’s clean growth strategy and their announcement five years ago, in 2017, about setting a target to get all housing up to energy performance certificate band C by 2030. Although many social housing providers have made strides to improve efficiency, we have heard in this debate that more needs to be done quicker. If we are to reach our net-zero targets by 2050, we must decarbonise our buildings, including the 2.7 million housing association homes in England. Housing association homes are, on average, more efficient than any other home but, as we heard, there is still much to do. The noble Lord, Lord Bourne, said that we have some catching up to do in this area, and he is absolutely right.

The noble Baroness, Lady Pinnock, and the noble Lord, Lord Foster of Bath, talked about insulation. We believe that social housing providers should be required to properly insulate properties to a high standard. Social housing tenants were not eligible for assistance under the new Green Deal, and some housing associations have in fact refused to insulate properties that are extremely cold and energy consuming in winter, simply because they do not have to do so. Insulating existing social housing properties would significantly reduce greenhouse emissions in the United Kingdom, help us to meet our legally binding CO2 reduction targets and potentially save the lives of many vulnerable people in the process. With people saying that they may have to choose between heating and eating this winter, this is even more critical.

This is not just about bringing existing properties up to energy band C; we also need to consider new build and our legislation around expected standards. According to Inside Housing, housing associations have built only a tiny number of homes that have the highest energy performance certificate rating of band A. The biggest 157 associations in the UK completed just under 50,000 homes in the 2021-22 financial year, but only 607 of those—1.2%—achieved a band A rating. In fact, the number of energy-efficient homes being completed by associations has actually fallen since last year, when they built 651 band A-rated properties. This data also shows that social landlords are falling behind the wider building sector. Two per cent of all new builds in England and Wales were EPC band A, according to the latest data. Although that rate is low, it is still more than 40% higher than the proportion built by housing associations.

Protecting people living in social housing from high energy bills is clearly important, because a high proportion of social tenants are on low incomes. We know that the energy crisis and the cost of living increases are causing severe financial difficulties for many housing association residents and are driving up costs for the housing associations themselves, as other noble Lords have mentioned during this debate.

While we know that many housing associations are doing all they can to help mitigate the impact of energy price rises on tenants and residents, the National Housing Federation has raised concerns that the price cap introduced by the Government to protect consumers does not help to lessen the cost for those on communal heat networks, which affects 153,000 housing association residents. Many of these residents are older, vulnerable and on very low incomes, so we must also protect these people from the rising energy costs. Will the Government look at communal heat networks and provide them with the same protections as other residents?

Alongside immediate help and support, a long-term strategy is needed from the Government on reducing energy demand. We agree with the noble Baroness, Lady Hayman, that publishing a social housing energy demand reduction strategy will support the Government in achieving their net-zero targets, while at the same time helping to drive down fuel poverty. I hope the Minister has listened to the clear concerns raised by the noble Baronesses, Lady Hayman and Lady Pinnock, in their introductions to their amendments.

I will now briefly comment on the two amendments in this group on safeguarding and supporting people who have become homeless, because this is an extremely important area that we need to tackle. The noble Lord, Lord Best, mentioned the Government’s recently announced rough sleeping strategy to tackle homelessness, but this Bill provides a welcome opportunity not only to ensure that the provision of housing and support for homeless people and homeless households is recognised as an important consumer regulation objective, but to allow the regulator to have a role in monitoring registered providers in working with local government and other stakeholders to alleviate homelessness. Both the noble Baroness, Lady Thornhill, and the noble Lord, Lord Best, made excellent introductions to their amendments, and I am sure they have given the Minister much to think about on improving strategy development to tackle this issue.

As drafted the Bill will ensure that registered providers provide safe, well-managed and quality homes, and that tenants have the opportunity to be involved in the management of those homes and can hold landlords to account. However, these important landlord responsibilities must continue to go hand in hand with duties to accommodate and support homeless people and households, and not to be seen by social landlords as an opportunity to cut back on this vital work or, potentially worse still, to house only compliant tenants who will give them a “good” landlord rating to show the regulator. So we strongly support these amendments.

Finally, I offer our support for Amendment 4, tabled by the noble Baroness, Lady Pinnock, which includes the regulator’s objective to look at the requirement to report to the Government on cladding and the remediation of other fire safety work. This is an important area left over from the Building Safety Bill, and we really need to tie up some of these loose ends. My noble friend Lord Whitty talked about the importance of the regulator, how it is set up and its priorities, responsibilities and objectives; this is clearly an important area that we need finally to cover off.

This has been an important debate and I look forward to the Minister’s response.

Photo of Baroness Scott of Bybrook Baroness Scott of Bybrook Baroness in Waiting (HM Household) (Whip) 4:15 pm, 6th September 2022

My Lords, I begin by welcoming members of the Grenfell community, some of whom are in the Gallery today, while many are watching online. I commend them for their continued engagement in this vital piece of legislation and assure them that they are never far from our thoughts and prayers.

First, I thank the noble Baronesses, Lady Pinnock, Lady Thornhill and Lady Hayman, the noble Lord, Lord Best, and others for this debate on these very important issues, which are becoming more important as energy becomes a bigger and bigger issue for the people of this country. These amendments seek to make changes to the Regulator of Social Housing’s statutory objectives and standard-setting powers and to the approach to energy efficiency in the social rented sector.

I begin with Amendment 1 in the name of the noble Baroness, Lady Pinnock, and Amendment 21 in the name of the noble Baroness, Lady Hayman. As I said, energy efficiency is an important topic, both to meet our net-zero commitments and to reduce residents’ energy bills over the long term, which we know is more important than ever at this time. Many registered providers of social housing are already striving to improve the energy efficiency of their properties. Indeed—I think this is an answer to the first question from the noble Lord, Lord Whitty—two-thirds of the sector currently achieves an EPC rating of C or above, making it the best-performing housing sector we have.

The Government are committed to considering setting a new regulatory standard of EPC C in the social rented sector and to consulting the sector before that standard is set. I am sure this is something that incoming Ministers will want to look at once they are appointed. Also, the Government committed £800 million in the 2021 spending review to the social housing decarbonisation fund, bringing the total committed to just over £1 billion. The fund will support the ambitions set out in the Clean Growth Strategy that as many homes as possible are improved to energy performance certificate EPC band C by 2035, where practical, cost-effective and affordable, and for all fuel-poor homes to reach that target by 2030.

As well as achieving good standards on average, many providers are already including net-zero considerations in their long-term planning and recognise the importance of improving energy efficiency. In the Heat and Buildings Strategy, published in October 2021, we committed to consider setting a new standard on energy efficiency in the social rented sector and that we would consult the sector before doing so. This part of the process is vital. Setting targets such as those proposed in Amendment 21 would exert significant financial pressure on social landlords who must balance differing spending priorities. We need to know whether spending on net zero might come at the expense of being able to deliver much-needed new housing and, importantly, home repairs.

That is why we must ensure that plans to decarbonise social housing are properly scrutinised and that we understand the broader impacts of any proposed metrics and standards. A full consultation and impact assessment would be a key step to understanding the impact of new standards on social landlords and on residents—who will benefit most from improved energy efficiency.

I assure the noble Baroness that improving energy efficiency in the social rented sector is a priority. The regulator already requires providers to meet the decent homes standard, which requires efficient heating and insulation. Including energy efficiency in the regulator’s objectives would therefore be only a symbolic change. Changing the objectives to include an already existing duty would be, in my opinion, a duplication.

I agree with the comment from the noble Baroness, Lady Hayman, that much of the debate that we have had this afternoon should possibly be taken in the Energy Bill as well. It is important that it is not forgotten.

The noble Lord, Lord Whitty, brought up the issue of the planning system and pleaded for incentives for regeneration rather than demolition and rebuild. I have to say that I agree with those sentiments but I do not have the answer. I will write to the noble Lord and will put a copy in the Library.

On communal heat networks, raised by the noble Baroness, Lady Hayman of Ullock, the Government have confirmed—I think I mentioned this in an answer to a question today—that network customers who will not be reached by the Energy Bills Support Scheme will be supported with an equivalent scheme, which is very good news. We are also taking powers in the Energy Bill to rectify the situation and Ofgem will regulate this in the future.

I now move on to Amendment 4 in the name of the noble Baroness, Lady Thornhill, and the important issues of cladding remediation and fire safety. The noble Baroness, Lady Pinnock, brought up the funding for replacement of usage of non-ACM cladding. The Government have committed to £400 million to replace unsafe ACM cladding, and a £4.5 billion fund to remediate unsafe non-ACM cladding on residential buildings over 18 metres or just below in all sectors. There is money there for non-ACM cladding.

Nothing is more important than keeping people safe in their homes. The Bill is just one of a number of reforms that the Government have delivered in response to the Grenfell Tower fire; this includes this year’s Building Safety Act and last year’s Fire Safety Act. The department continues to work closely with registered providers to look at ways to make sure that buildings with unsafe cladding are remediated quickly. However, we are not persuaded that this type of monitoring is appropriate for the Regulator of Social Housing to undertake. While the regulator collects data from registered providers to inform its regulation of the standards, it is not a specialist health and safety body. The regulator’s data collection powers enable it to collect only data relevant to its regulatory functions. Significantly, its regulatory remit does not extend to monitoring the progress of cladding remediation.

The department is currently examining options for monitoring and reporting remediation progress in future, including cladding remediation. We strongly believe that decisions in this area should be based on thorough analysis of available options; this will ensure that the function is undertaken by those with the correct skills, expertise and capacity. Consequently, it would be counterproductive to pre-empt the outcome of this work by adding this amendment. I am, however, keen to reassure the noble Baroness that ensuring that landlords provide safe, high-quality social housing remains a key part of the regulator’s role.

I now turn to Amendments 2 and 22 in the names of the noble Baroness, Lady Thornhill, and the noble Lord, Lord Best, respectively, which relate to the regulator’s role regarding homelessness. The Government are committed to tackling homelessness before it occurs; this year we provided local authorities with £316 million in homelessness prevention grant funding. Since the introduction of the Homelessness Reduction Act 2017, over half a million—510,930—households have been supported into secure accommodation. We have made excellent progress on our manifesto commitment to end rough sleeping and will build on this progress through continued work with our range of partners. To deliver our vision, we have brought forward a bold new strategy to end rough sleeping and we have pledged £2 billion over three years to deliver on this ambition by supporting local authorities and partners to deliver on this strategy. It will continue to be the role of local authorities to consider how their allocation policies support those in need of social housing, including people who are homeless. It differs very much, depending on where that local authority is and its demography.

While we expect landlords to treat everyone with respect and deliver a high-quality service to all, the measures in the Bill are targeted specifically at existing social housing residents. This is to enable the regulator to monitor compliance with its standards, supporting improved services for residents.

The regulator’s existing tenancy standard already sets an expectation that providers take account of the housing needs and aspirations of tenants and potential tenants, and assist with local authorities’ strategic housing function. This includes homelessness duties. Providers are also required to provide services that will support tenants to maintain their tenancy and prevent unnecessary evictions. I also note that the regulator plays a vital role in ensuring that providers are financially viable and well managed, which protects tenants from situations that would put their housing at risk. Following the passage of the Bill, the regulator will review and consult on changes to the regulatory standards, including the tenancy standard.

At this point I want to bring up the issue of temporary accommodation, brought up by the noble Baroness, Lady Thornhill, and the noble Lord, Lord Best. Time spent in temporary accommodation means people are getting help and ensures that no family is without a roof over its head. The Government are committed to reducing the need for temporary accommodation by preventing homelessness before it occurs. This year, local authorities have received £316 million through the homelessness prevention grant, giving them the funding they need to prevent homelessness and help more people sooner. The Homelessness Reduction Act is helping more people get help earlier, particularly single households who often in the past would not have received help and would have been at risk of sleeping on our streets.

The Government are also committed to increasing the supply of affordable housing. We are investing £12.2 billion in affordable housing over five years from 2021 to 2026. This represents the highest single funding commitment to affordable housing in a decade. The investment includes the new £11.5 billion affordable homes programme that will be delivered over five years, providing up to 180,000 new homes across the country, should economic conditions allow.

The regulator continues to develop the operating model for the proactive consumer regulation regime and will consider how best to seek assurances that providers meet the revised standards set. In view of these arguments and reassurances, I ask noble Lords to kindly not press their amendments.

Photo of Baroness Pinnock Baroness Pinnock Liberal Democrat Lords Spokesperson (Levelling Up, Communities and Local Government) 4:30 pm, 6th September 2022

My Lords, first, I want to remind us all that this Bill is here largely because of the tragedy at Grenfell, to recognise that and to thank the campaigners for, in a time of deep distress, taking up the cudgels on behalf of not only those who suffered and died in the Grenfell tragedy but the whole social housing sector, to improve the quality of social housing for everybody. We should all be grateful to them for what they have forced this Government and ourselves to address and to respond positively to—so thank you.

I thank everybody for the debate we have had on such important issues. It has been an excellent debate and, across the Committee, we have all agreed. I am not sure the Minister has, but I am sure she can be persuaded and I thank her for her responses to the issues that have been raised. I want to say one or two words. There are three big debates here, are there not? One is about energy efficiency, where I thought the two amendments actually knitted together really well. In principle, there is a duty there to add that to the objectives of the regulator and, obviously, the strategy, the plan that is going to get us there. That was beyond me, so the experts took that on, and, you know, why do we not just say yes to it? Because it is so good—is it not?—and very important at this particular time. Some £700 per household could be saved if we insulated homes properly. In some parts of the country we did that, so we can do it everywhere.

On responsibility for homeless provision, I was really shocked by the statistics from the noble Lord, Lord Best, that 10,000 tenants have been evicted. Did I hear that right? I did. That is dreadful: 10,000 tenants evicted and then homeless. Where do they go? That has to be put right. Again, that was at the heart of the principle and the plan that we heard about from my noble friend and the noble Lord, Lord Best. A strong case was made. I know that the Minister has had to read out what she was given, but the case was there. I am sure this amendment will come back on Report, as will the one on energy efficiency.

Finally, I make no apology for raising cladding once again. The social housing sector is not as well funded to deal with it as other areas, and until I am convinced that it can be achieved without costing tenants and the opportunity cost for providers, I will keep raising it.

It has been a good debate. I thank the Minister for what she said, and I therefore will not press my amendments —but I will probably bring them back on Report.

Amendment 1 withdrawn.

Amendment 2 not moved.