Housing (Amendment) Bill: Second Stage

Executive Committee Business – in the Northern Ireland Assembly at 12:30 pm on 1st June 2020.

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Photo of Deirdre Hargey Deirdre Hargey Sinn Féin 12:30 pm, 1st June 2020

I beg to move

That the Second Stage of the Housing (Amendment) Bill [NIA 6/17-22] be agreed.

Photo of Christopher Stalford Christopher Stalford DUP

In accordance with convention, the Business Committee has not allocated a time limit to this debate.

Photo of Deirdre Hargey Deirdre Hargey Sinn Féin

Thank you, Members. To go back over what was previously said, the ONS published its decision on 29 September 2016 to change the classification of registered housing associations from the private sector to the public sector. Obviously, at that time, the Executive started work to facilitate the reversal. The Executive effectively repeated that commitment in New Decade, New Approach, and that committed us to bring forward legislation, which is urgently needed, to reclassify housing associations as external to the public sector to ensure the continuation of the co-ownership housing scheme and the building of new social housing.

The Executive decided to seek the reversal of the classification to its development of new social homes through housing associations. A private sector classification has long enabled housing associations to complement, with their borrowings, the capital that the Executive have allocated to the development of new social homes. Those borrowings did not score as public borrowing due to housing associations' private sector classification, but they would under a public-sector classification.

Under the Treasury's borrowing rules, DFC would need to retain in its capital allocation a sum equivalent to an association's annual borrowing while it is classified to the public sector. That would entirely remove the advantage to the Government and the social housing sector of an association's ability to fund new social builds. The building of all new social homes would need to be entirely funded by the Executive. Since the ONS decision, the British Government have prevented its having that effect on the Executive's Budget by applying a derogation. The Treasury terms for that derogation require that the Executive must, in the meantime, expedite legislation that would reform the relationship between it and the associations so as to permit ONS to return registered housing associations to a private sector classification.

The derogation expires on 31 March 2021, and it is unlikely that there will be a further extension to that classification. To put that in context, if 2019-2020 had been negatively affected in that way, the £146 million of capital that my Department allocated to new social housing builds could not have been matched by similar sums of borrowing by housing associations. Instead of supporting a target of 1,850 new build starts, about half of that number of builds would have been affordable. At a time when the waiting list for social homes continues to increase, that is clearly an unacceptable situation. Since 2016, it has become clear that the ONS classification of registered housing associations to the public sector has made them ineligible to access financial transactions capital or FTC loan funding.

The access to FTC has supported housing tenures other than social rented tenures — the most significant of which is the co-ownership scheme. In the last two years, the scheme has supported over 2,000 households into home ownership, and, from April 2015, the scheme has utilised a FTC loan to do that. However, from November 2018, my Department maintained the delivery of intermediate shared ownership houses at those levels by securing an additional £49 million of capital DEL grants, with approximately £15 million in 2018-19 and a further £34 million in 2019-2020. The alternative would have been a closure of the scheme for new applications.

Unless a private sector classification is returned to housing associations, the only options for 2020-21 and beyond are closure or still further pressure on capital DEL. Social and economic benefits are at the heart of the reclassification in this legislation. The economic benefits, the use of capital DEL to leverage inward commercial investment and the financial transactions capital that can once again be drawn down will take on additional relevance insofar as they will add to the economic recovery from COVID-19.

It may be helpful to spend a few minutes to go through the details of the scope of the Bill. ONS determined that housing associations should be classified to the public sector because it observed the level of control of housing associations, by the Executive through my Department, not to be consistent with a private sector classification.

That is why the sole focus of the draft Bill is to remove or amend those provisions in current housing legislation that provide for that control.

As England, Scotland and Wales have also had the same reclassification decision made by ONS, there was regular liaison between officials here and those three other areas. That forum allowed the Department to learn from others' experience and to gain an insight into the legislative amendments that ONS considered to be acceptable for reversing its decision.

The issue of the house sales scheme was unique, as we are the only jurisdiction or local authority with a compulsory scheme for registered housing associations.

The draft Bill that this work has produced has eight substantive clauses and three technical clauses. There is also a short schedule. The explanatory and financial memorandum published alongside the Bill provide a detailed explanation of it, and I will briefly outline the Bill's main impacts.

First, the current consent process for a number of functions carried out by housing associations will be replaced by a notifications process. Secondly, the circumstances in which the housing regulator may launch an inquiry into the activities of an association are more clearly framed and based in failure or suspected failure to comply with legislation. Thirdly, the Bill removes the power of the Department to petition for the winding-up of an association, a power that has never been used. Creditor bodies could still do that.

Finally, the Bill proposes to end the statutory house sales scheme for housing associations, and it introduces a power to enable the Department to support a voluntary house sales scheme should the associations develop a substitute one.

The Bill will not decrease the regulatory authority exercised by the housing regulator and does not diminish the relationship between the tenant and the association nor the tenant's ability to engage with the regulator. The approach in the legislation has been based on the direction from the Executive as far back as September 2016 and does only that which is necessary to achieve the reversal of the ONS decision. That is why the Bill proposes changes to the current compulsory house sales scheme for registered housing associations, but not for the Housing Executive.

I will, in due course, consult on methods of entry to affordable home ownership, both on extending existing schemes and introducing new alternative options, particularly for social tenants who wish to become homeowners. That consultation will be brought forward in the coming months and will include consideration of how best to protect the social housing stock and the future of the Housing Executive's house sales scheme.

I am happy to deal with any points of principle from Members.

Photo of Paula Bradley Paula Bradley DUP 1:15 pm, 1st June 2020

The Committee for Communities welcomes this Bill. Indeed, given the important issues that this Bill addresses, we anticipated that we would have already considered it, given that it was a key priority at the start of this Assembly.

In September, it will be four years since the Office for National Statistics took the decision to reclassify registered housing associations to the public sector and designate them as public, non-financial corporations. It is important to recognise that, on one level, that was a decision taken in order to align with technical accounting rules, but it has had a significant impact on the housing sector.

The key purpose of the Bill is, of course, to make the required changes to ensure that the ONS will reverse that decision and return housing associations to the private sector. As noted in the debate on the previous motion, the Committee was briefed by the Minister on 13 May. During that briefing, the Minister noted a number of reasons why accelerated passage was required, and those issues are also pertinent to this Second Stage debate.

Housing associations normally raise money through the private sector in order to match fund the housing grant from the Department. If the decision is not reversed, housing associations will not be able to do that and the number of social housing starts will significantly reduce by as much as 50%.

In addition, housing associations will lose eligibility to access financial transactions capital — a government loan scheme that is primarily used to support the co-ownership scheme.

Despite the derogation from the Treasury, housing associations have not been able to access that scheme. The Committee was advised that it costs the Department £3 million per month to maintain the co-ownership scheme. That is not sustainable, and, in these uncertain times, that money could be used to fund other priorities.

At the heart of the ONS decision lay the degree of control that the Department exercises over housing associations. The greater the control, the more likely it was that ONS would not reverse its decision. Of course, the Committee was concerned that the Department should still be able to exercise sufficient regulatory control over housing associations, particularly given the large amount of public money that that sector receives. The Department advised the Committee that the ONS had looked at the current regulatory system, proposed changes to it and were content with what the Department was proposing, so the Committee was reassured that regulation will continue broadly in the same way as it does now.

A key issue for members was the decision to abolish the right-to-buy scheme in relation to housing association homes. That was covered in clause 7. Some members saw it as a popular scheme that gave people a foot on the property ladder. Others said that it contributed to the reduction in our social housing stock. Arguably, both of those positions are true, but the Committee was advised that, if that provision was not included, ONS would not reverse its September 2016 decision. It is also worth noting that between 20 and 60 housing association properties are sold annually, whereas between 200 and 400 Housing Executive properties are sold. That is important because the ending of the right-to-buy scheme will apply only to tenants in the housing association sector and not to tenants in Housing Executive accommodation. That runs the risk of there being inequality if it is not addressed soon, and the Minister has given her assurances that it will be. However, for the main purpose of the Bill, the Committee was told that that is not required.

I should also point out that, for those who are considering buying a housing association house, there is a two-year transitional period in which tenants can register an interest to purchase. It is not the case that contracts have to be exchanged within that two-year time frame. Registered housing associations will, however, be able to operate a voluntary right-to-buy scheme, and clause 8 will allow the Department to pay a grant in support of a voluntary housing scheme. The Committee welcomes that.

Housing is a multifaceted issue that, in normal circumstances, would be a key priority for the Committee. COVID-19 has temporarily put paid to that, but the Committee looks forward to engaging with the Department and stakeholders on housing over the rest of the Assembly mandate. That is something on which, the Minister has advised, she also wants to make progress. However, the Committee supports the Bill at its Second Stage.

Photo of Sinéad Ennis Sinéad Ennis Sinn Féin

I find the intervention by my colleague on the Committee for Communities a bit bizarre. He gave a long preamble about housing being an equality issue, yet he attempted to jeopardise the accelerated passage of the Bill. If that were to happen, approximately £20 million would be taken out of the social housing budget. Considering that he did not mention any of his concerns when we spoke about it in Committee, I find it a bit bizarre.

Photo of Sinéad Ennis Sinéad Ennis Sinn Féin

I am sure that the Member will explain it in his contribution, so I will leave that to him.

I thank the Minister for her fast and decisive action in providing the utmost support for our housing providers and those who struggle to obtain a home, either through homeownership or social housing. The Bill is about maintaining the supply of new homes that is necessary to help struggling families and our most vulnerable to access housing and have the security and dignity of a home. If classified as public bodies, housing associations would lose the ability to borrow financial transactions capital, as all borrowing would have to count as public sector borrowing. In real terms, that would reduce the number of social homes by approximately 50% each year and would dramatically reduce funding for the co-ownership scheme.

Every year, 60 housing association homes and 30 Housing Executive homes are sold, and that stock is never replaced. How many families are already struggling to obtain their own home while living in unfair conditions of overcrowding? How many young families are still being penalised for the housing crash over a decade ago? The Assembly must ensure the maximum delivery of social and affordable homes for our citizens in what will undoubtedly be a tough and uncertain period ahead.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

In the previous debate, I acknowledged the importance of the Bill and the hugely significant role that it would play in enabling us to build more houses and provide more homes. We all know people who have spent years on the list waiting for a home: families who, without the security of somewhere that they can call their own, have run the gauntlet of the private rented sector and others living in overcrowded conditions with their extended families and friends. We are failing those people. Any measure that can and will help us to help them is to be supported.

In the previous debate, I also acknowledged that the Bill was far from perfect. I am not the only one with questions about it. Some Members will have received the same correspondence as I have from Housing Rights, which shares many of the concerns raised by Committee members. The primary concerns seem to focus on clause 7, which deals with the abolition of the mandatory right-to-buy scheme in housing associations — sorry, the move to make it voluntary. The right-to-buy scheme has been popular, and members touched on that in Committee. It has allowed people to get on to the housing market affordably, and most of us will know many people who have availed themselves of and benefited from the scheme. However, in my book, the right to buy is trumped every time by the right to a roof over your head. We cannot afford to continue to sell off social housing stock while need increases and we are not able to build anywhere near enough homes to meet that need.

Given that there has been extensive consultation, it is difficult to understand why the Minister has not taken the opportunity that the Bill presents to make the scheme voluntary for all social landlords. By excluding the Northern Ireland Housing Executive and retaining the mandatory right to buy for NIHE tenants, you create an inequality in access to social housing and ownership. It could very likely also have implications for the administration of the social housing allocation system. Might some people reject what, to all intents and purposes, is a reasonable offer of a housing association property while they wait for the offer of a Housing Executive home that they can ultimately own?

As things stand, about 10 times as many Northern Ireland Housing Executive properties as housing association properties are sold every year. In Committee, I sought and received an assurance from the Minister that she would address the Housing Executive situation in the near future. We need to hear more detail on that, and we need to hear it soon. Does the Minister intend or envisage an ultimate reclassification of the Housing Executive to take it out of public sector borrowing requirements and a remodelling that would allow it to borrow and build much-needed homes and communities, as it does so well? An update on the social housing reform programme would be welcome from the Minister today.

I am conscious that I might be coming across a bit curmudgeonly. That is not my intention, believe me, but it is important that the weaknesses in any legislation are flagged up as it is debated in the House. Clause 8 appears to allow the Department to compensate housing associations that continue to operate a voluntary right-to-buy scheme. How will that work? What measures will exist to prevent associations picking what homes they want to sell solely on the basis of profitability, selling off better homes while happily retaining homes of a lower standard for social housing tenants?

Despite the fact that we will now not have a Committee Stage, I am and we are happy to work with any and every Member and the Minister to consider how the Bill may be strengthened. That should not detract from my support of the Bill's aim to reverse the ONS reclassification. We need to empower our housing providers to build more, and we need to use every legislative tool at our disposal to do so.

We support the work of housing associations and co-ownership.

We have heard the cost, which is £3 million per month, of not doing this. However, for how many months have we been paying that £3 million? This legislation, like so much important legislation, has been delayed because we had no Assembly. In response to Ms Ennis, I say that I did ask officials about the financial cost of the delay and was given a rough estimate of £40 million thus far. As for social cost, one of the Minister's officials computed that 700 social homes had not been built as a direct consequence of the pyrrhic political stand-off between Sinn Féin and the DUP that left the people of the North without an Assembly. However, we have moved on, I hope, and now we must focus on making things right. The Minister and Chair outlined the Bill's benefits, and there are many. We and our constituents cannot afford for the Bill not to pass, and we support it.

Photo of Andy Allen Andy Allen UUP 1:30 pm, 1st June 2020

First, before I go into the Bill's detail, I place on record that I understand and fully appreciate the position taken by the Member across the way. Under normal circumstances, we would not like to see the Bill progress with accelerated passage. I understand where the Member is coming from, but I take a slightly different position in the current circumstances.

I welcome the Bill. It is good to see its introduction, nearly four years on from the original decision made by the ONS. We were promised it on numerous occasions throughout the previous mandate. Regrettably, we were not here for three years, when we should have been dealing with these topics and important measures.

We are all cognisant of the various and profound issues that the Minister, Committee Chair and my Committee colleague across the way highlighted, including the impact that the failure to achieve reversal of the reclassification will have on many of our constituents across Northern Ireland, the impact on financial transactions capital and the impact for the many tens of thousands of individuals and families on social housing waiting lists across Northern Ireland. We feel that the Bill and the majority of its substantive clauses are necessary, proportionate and measured. We welcome the fact that we will still see regulatory oversight of housing associations. The majority of housing associations operate in a good manner. I have had very good dealings with housing associations when engaging with them on behalf of constituents. Thankfully, to date, I have not had a negative experience, and they have always been proactive and willing to engage to resolve any issues.

My party and I are on record about our position on the right-to-buy scheme. We recognise that the right to buy was not perfect. It was not a utopia. There were problems with that system, and no one is denying that, but it provided those who wished to get on the housing ladder with an opportunity to do so. However, we fully understand and appreciate the necessity, in the Bill, to abolish the right-to-buy scheme, and we reluctantly support that. In turn, we welcome the voluntary scheme. As my colleague across the way pointed out, some further detail would be good. I raised that point at the Committee with the Minister and officials, who said that they would come back with that information. It would be helpful to know how that scheme will be administered. What will the grants look like, and what form will they take? As the Member across the way pointed out, how will it be decided what housing stock will be sold etc?

We support the Bill, and I am happy to work with any Member who wants to strengthen it.

Photo of Kellie Armstrong Kellie Armstrong Alliance

The Housing (Amendment) Bill takes forward change to the way in which housing associations are designated. As other Members mentioned, it has been some time in coming, and I thank the Minister for bringing it forward. I appreciate that accelerated passage is not the way to go, and I have said that before, but, in this instance, it is. This will allow social housing to continue to receive funding and will enable co-ownership to continue to help people to buy their home.

One issue of note, today, which others mentioned, is clause 7: the statutory house sale scheme will be abolished. The right to buy may continue if the social housing association chooses to take forward a voluntary scheme. The Alliance Party recognises that many people have availed themselves of the system but also that the lack of replacement builds meant a 42·5% increase in social housing stress waiting lists from 2009 to 2019. The Housing Executive still will be able to sell off its homes. We need to align social housing and the Housing Executive right to buy, and I encourage the Minister to complete the review of the Housing Executive as soon as is practical.

I also want to highlight the fact that the 'New Decade, New Approach' document included an agreement for a housing outcome to be added to the Programme for Government. I appreciate that while we are going through the pandemic, work still needs to be done to ensure that housing is treated as a priority and will appear in the updated Programme for Government. As mentioned by others, I would like the Minister to work with social housing to ensure that any future voluntary scheme for a right to buy includes a requirement to deliver inclusive and cohesive communities by ensuring that mixed tenure is maintained.

I absolutely welcome what is coming with the Bill, because it means that our construction industry can see that the market is there, that there is work for them to do and that we will be able to provide the funding for them. It is a difficult one to take forward as an urgent case, but it makes sense. We need to deal with the ONS reclassification and we need to do it as quickly as possible. I thank the Minister for bringing the Bill forward.

Photo of Jonathan Buckley Jonathan Buckley DUP

I support the legislation to reverse the ONS decision to reclassify registered housing associations to the public sector and designate them as public non-financial corporations. In doing so, I support the Bill's purpose as there is clearly a need for us to be able to invest for the future in our social housing stock. We know about the housing stress that exists at present.

However, given the way that the Bill has been progressed by accelerated passage, I support it with considerable regret that we have had to go down that avenue. I have some considerable agreement with my colleague the Member for Foyle Mr Durkan in relation to the lack of scrutiny that we have been able to have in relation to this crucial piece of legislation. We have already heard that it is needed and we know that it has done the rounds for many years now in this place. People like me, who are new to the Committee, have not had the ability to scrutinise that housing sector in the way in which, I believe, we should.

It has to be said that we cannot continue to scrutinise important pieces of legislation via telephone conferences. I understand that that is happening at the moment because of COVID-19, but this is too important. Our eyes must be over the legislation in its entirety. We had a briefing from the Minister on 13 May, which we appreciated. It was an opportunity for Members to put on record their concerns and, despite what Ms Ennis said, there was concern from Committee members as to the purpose and intention of the different elements and clauses of the Bill. The point is that for it to go forward as the Minister has recommended, the reason why we can support accelerated passage is because of the points that she mentioned, namely that £3 million a month is being wasted while the decision has not been overturned, and because of the potential threat of derogation being withheld.

I am on record in the Committee as saying that one particular clause in the Bill causes me considerable regret. It is in relation to the proposed abolition of the right-to-buy scheme. For many, it was a contentious scheme but I saw it as a very popular policy, which enjoyed widespread support from those who could only once have dreamed of getting their foot on the property ladder. The right-to-buy policy enabled them not only to get on the housing ladder, but have an asset that they could leave to future generations of their family. It is something that many of them had worked towards all their lives. It also provided them with the financial security of home ownership, and we all know the importance of the ability to own an asset such as a home that can, potentially, be used to move people away from the care of the state towards private asset ownership.

It is also important to bear witness to the fact that it has been noted that those who own an asset such as a home have a sense of ownership and care and attention. Roots were laid in communities across Northern Ireland because of the policy that allowed individuals to own their homes.

I have a concern about clause 8. Clause 8 is included to allow the Department to pay grants to support voluntary schemes, but very little detail is provided in the Bill and the explanatory note, or has been given to the Committee, on what sort of schemes will be going forward. I would like clarity on that from the Department and the Minister, because if we are moving towards a situation in which the right-to-buy scheme is to be abolished under the Bill, because the ONS classifies that as overarching control, it is that decision that will probably be key to moving it towards reversing its decision. However, the Committee has had no viewing of what potential schemes or otherwise people might be able to avail themselves of in the future. While I recognise that the right to buy will not be abolished for, I think, two years, it gives people some security to get on the scheme. It is future generations and their right and ability to own their own homes that I think about. I would appreciate it if the Minister could give further clarity on clause 8 and its meaning.

Obviously, as this applies to the registered housing associations, there will be further discussion in the House and at Committee in relation to the Housing Executive. I hope that the House will not be going towards accelerated passage again and not have the opportunity to examine carefully every facet of proposed legislation to ensure that we give people the ability to eventually own their home through these schemes which have been so popular.

Photo of Emma Sheerin Emma Sheerin Sinn Féin

I support the Bill. As a rural representative in an area in which young people, in particular, struggle to get their feet on the property ladder, I support the Bill's intention to avoid the halving of the social housing programme. We have had over 10 years of austerity. Prices keep rising; wages do not. More and more people are finding that their grown-up children are still living with them as they approach their thirties and, indeed, in their thirties. I know, because I am one of them.

In rural areas, a lack of building in small towns and villages means that most people have only two options: move to where there is affordable housing or wait it out. Housing lists in small rural villages are not always a true depiction or reflection of reality, because when people are applying for housing and told that there is none available in their locality, they pick somewhere five, six or 10 miles down the road.

If you are not lucky enough to inherit a site, have a site for which you can get planning permission or to have the thousands that are required to build a home, you have to stick it out. That is unfair. We have discussed the lack of housing. The reclassification would leave the Executive funding the entire new build programme, which potentially reduces the number of new builds from over 1,800 to 900. In rural areas, we need more building, not less. For that reason, I support the Bill.

Photo of Colin McGrath Colin McGrath Social Democratic and Labour Party

I begin by acknowledging the remarks already made regarding the death of George Floyd. In this place, we know the importance of civil rights and the implementation of them. The scenes from America are harrowing and a throwback to a time that we all hoped we had moved from.

The core of the Bill is the ability to deliver new social homes, of which there is already a distinct shortage in our community. How many of us are regularly contacted by people asking if there are social houses available, how they can get their name down for a development or when a new development in the area will commence? We also all know of the sterling work that is being undertaken on the streets of our towns and cities to manage homelessness, and we know of the many hundreds, if not thousands, more who sofa surf because of the lack of a home. The need for new homes is present in our community, and we must deliver on that need and remove barriers that are preventing the building of new homes. The Bill aims to address that.

The Bill has some imperfections, and the nature of it being accelerated concerns us. The Bill is not needed until 31 March next year. More time to have better scrutinised it would have been beneficial, if only to draw on the expertise amongst the housing sector that could have helped inform us and helped us make sure that the Bill was watertight and as good as it could be.

The reclassification proposed in the Bill allows registered housing associations to borrow money. It is something that they have always done in the past, and the Bill aims to reverse a bad decision that was taken a few years ago that was more to do with what was happening elsewhere rather than here. That decision could have massive ramifications. For example, in 2019-2020, £146 million was borrowed by housing associations, and, with the change to rules implemented going forward, that would have resulted in a massive real terms hit to the budgets of housing associations. More importantly, it would have resulted in them not being able to build new homes and reach the target that the Executive have set for new build.

Much of the previous money borrowed was FTC, and we know what the perception is of that money being handed back. Last year, £150 million was handed back. Imagine if we could have directed that to our housing sector. Much of that which was borrowed funded co-ownership, which in the past two years has delivered 2,145 houses. What would our future be if we cannot deliver that level of housing? Over 2,000 families would be stuck in older housing, maybe in unfit properties and maybe not where they want to be.

Surely our measure as a society is our ability to deliver on housing. Without change, which the Bill proposes, we will be unable to get the much-needed finance into our housing system, and this will mean that we will be miss our target of 1,850 new-build properties a year. In fact, the SDLP wants to see a stronger and higher target, and we also want to see the inclusion of the housing indicator in the Programme for Government, so we have not finished on that ask yet either. Such an indicator would be a clear indication from the Executive that they are serious about housing provision, and that that will be underpinned by the need for the all-essential cash.

There is real housing stress in our communities, and, as I have said, there is hardly one of us in his Chamber who is not contacted daily about housing. We are contacted about the need for a house, the need for an upgrade to a house or maybe the wish to move out of a particular area because it is bad for people's health, maybe bad for their mental health. We hear also, through processes like Bengoa, that the type of upbringing that children have can dictate their future health needs. One core element of how children are brought up is the roof over their head and the fact that it is a good, modern, high-quality home in a nice community that is well laid out and looked after. That will certainly give children a much better start in their life.

The quality of the existing stock is diminishing, too. Many of the Northern Ireland Housing Executive houses are getting old, and they are not able to build new homes. This means that the cost of repairs is increasing, and that is zapping up the budget of the Housing Executive. Also, many of the developments that the Housing Executive has reflect the old North, the Northern Ireland of the past, and are in segregated areas that do not look to the future that we want to see in the North. Only new developments away from contentious areas, away from flashpoints and peace walls, can embrace the new Ireland that we would like to seek. These new communities can live side by side with emerging communities, too. Again, all of that is underpinned by the capacity and ability of housing associations to be able to build new houses, new developments and new communities and create that future. The Housing (Amendment) Bill may not sound glamorous, but this is a Bill that unleashes the potential of the North, and, therefore, we support it.

Photo of Martina Anderson Martina Anderson Sinn Féin 1:45 pm, 1st June 2020

Ba mhaith liom labhairt i bhfabhar an Bhille seo. I want to speak in favour of the Bill, but, as I stand here this afternoon, I also want to send my deepest sympathy to the family and friends of George Floyd. I say to those who are on the streets protesting that black lives matter.

Across the island of Ireland, we are in the midst of a housing crisis, but, in the North of Ireland, if we reflect back to 2002, we will see that over 13,000 people were in housing stress. By 2019, that had skyrocketed to over 26,000 people. <BR/>Without this Bill, the reclassification of registered housing associations by the British Government would deepen the housing crisis and halve the annual amount of council housing that is built in the North. My constituents — our constituents — in Derry would absolutely understand the need for accelerated passage. No one likes accelerated passage. We all like the opportunity to scrutinise, and to scrutinise properly, but they would understand it, because people do not want there to be the opportunity for the co-ownership scheme to close. Some £21 million, we are hearing, would have to come out of the social housing development programme otherwise. In the context of COVID-19, that is a lot of money. It is money that is needed for the social housing development programme in places such as Derry and north Belfast.

Furthermore, it is appropriate to say, given the objections that have been raised, that previous SDLP Ministers — in fact, former SDLP Social Development Ministers — used the accelerated passage mechanism, and did so was when there was no COVID-19. I therefore acknowledge the clause —.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I thank the Member for giving way. In this debate, I referred to the need to use every legislative tool at our disposal to help our constituents, so many of whom — you gave a figure, Ms Anderson, of 26,000 — are in housing need. Of course we must, and the accelerated passage procedure is a legislative tool. Yes, it is one that other Ministers, from every party, will have used at different stages in the lifetime of the Assembly. Will the Member not concur with me, however, that it is vital that we get legislation right? What we are talking about here is not a huge delay but merely time to afford Committee members and MLAs who are not on the Committee an opportunity to scrutinise the Bill fully and hear evidence from the sector, experts in the field and even the Housing Executive on the legislation's implications for the wider housing sector.

Photo of Martina Anderson Martina Anderson Sinn Féin

I hope that this is not a dialogue of the deaf, because I did say that, as MLAs, we do want to scrutinise. We all want to be involved in proper scrutiny and to make sure that legislation goes through in a way that affords us the opportunity to engage with people, but no one wants to see an opportunity for co-ownership to be lost or for the scheme to close, and we do not want to see up to £21 million come out of the social housing development programme if the Bill does not pass.

I acknowledge clause 7, which will abolish the compulsory right-to-buy scheme for registered housing associations. That policy was introduced by Margaret Thatcher and has helped to grind down the supply of social housing in the North. Although, as has been said, the scheme is good and has given people the chance to buy their social home at a discount, it, in practice, has facilitated private companies to siphon off public access in order to make a profit. Homeownership is without doubt a good thing, but I have been dealing with constituents, as, I am sure, other MLAs have, and I have found that many people who wanted to own their own home but who could not afford to do so were enticed by the private sector with conditional loans, which enabled them to live in their house until they died. Afterwards, the house was transferred to the private sector. That is housing stock that has never really been replaced.

The policy was never really about homeownership on its own. It was an attempt to turn some aspects of social housing into what I would describe as something like the wild west of unbridled capitalism, where greed trumps need.

Photo of Martina Anderson Martina Anderson Sinn Féin

No. You have had enough time.

Minister, I am glad that the Bill will put an end to two policies that threaten the provision of social housing. I am aware, and I am sure that you will agree, that much more needs to be done. That is something of which, crucially, all MLAs are conscious. We need to increase our social housing stock, because access to adequate housing is a human right. It is a human right that everyone in the Chamber would support and concur with. <BR/>In 2019, in my Derry constituency, there were 4,510 people on the housing waiting list. In the same year, only 1,231 people were housed. Derry has one of the highest rates of homelessness in the North, and one of the lowest rates of approval for new plans to build additional social housing. In fact, due to nearly a decade of Tory austerity and its impact in slashing things such the budget for NI Water, even when social housing is planned in Derry, building is stalled. I am sure that it is not just in Derry, but it is certainly the case in my constituency because there is simply not the sewerage capacity to build the new houses.

Minister, I believe that the Bill is a good step towards ensuring the maximum delivery of social and affordable housing for our citizens. However, it is clear that we also need to address the housing shortage, particularly in areas such as Derry and north Belfast that have suffered from persistent and chronic housing inequality. Minister, you know that further decisive interventions, like that before us today, will be required to resolve this crisis. In that vein, I ask that, in addition to this legislation, you consider reintroducing the policy of ring-fencing new-build allocations with robust monitoring to ensure that social housing is delivered as a priority in areas that are most in need such as Derry and north Belfast. On that, I want to mention one of my colleagues who cannot be here, Carál Ní Chuilín, who has raised issues about north Belfast on a number of occasions.

The policy should never have been removed. However, unfortunately and shamefully, in my opinion, it was removed by not one but two SDLP Ministers. First, Margaret Ritchie started it and Alex Atwood, shamefully, ended it. Hence, I asked you, Minister, to consider reinstating the ring-fencing policy with a robust monitoring mechanism to ensure that further social housing is built where it is most needed.

Photo of Sinead McLaughlin Sinead McLaughlin Social Democratic and Labour Party

I, too, add my condolences to the family of George Floyd. The civil rights movement in Derry started because of a housing issue: an inequality. What we are speaking about now is an inequality. Housing is a right, and we should support it. I just wanted to say that before I look at the Bill.

This may look like a technical Bill, but it is a very important one. It unlocks opportunities for economic growth as we emerge from the COVID-19 lockdown. The suspension of the Assembly for three years caused serious and specific difficulties for the social housing sector in Northern Ireland. The lack of an Assembly meant that we were unable to process the legal changes that have been undertaken in Great Britain. In turn, this has restricted the ability of our housing associations to borrow.

We have a housing crisis in Northern Ireland. We have very long waiting lists for social housing. Around 38,000 households are on the waiting list, with about 26,000 of our households in housing stress and 12,000 recognised as homeless. Yet, we are building fewer than 1,000 new social homes per year. At the current rate of progress, it will take several decades to clear the social housing waiting list. That is unacceptable.

According to the House of Common's library, Northern Ireland is the only part of the UK in which the private rental housing sector is larger than the social housing sector.

That is a serious problem, because parts of the private rental sector are of very poor quality, while also being more expensive than social housing.

We need housing associations to build large numbers of housing units to meet the massive need for new homes. That will create substantial numbers of desperately needed jobs. It should also come with an accredited training scheme, helping to strengthen our skills base.

My party's hope is that the Bill will do more than enable housing associations to build additional homes, create jobs and training places. We hope it will also open up greater use of financial transaction capital. It is obscene that Northern Ireland underspent its allocation of financial transaction capital by £150 million last year. That was a golden opportunity to spend more money here.

We want our housing associations to be dynamic organisations, borrowing to invest, building social and affordable homes that are clean and efficient, creating places for people to live, strengthening our communities and providing jobs.

My party also wants housing associations to be full and committed participants in the green new deal, cutting carbon emissions and creating a cleaner economy. Those opportunities stand before us today. Had we been here sooner in the Assembly, we would have created more homes earlier, easing our chronic housing problem. The Bill would not have had to go through an accelerated process, because we would have already dealt with it. We are in this housing crisis because we were not here in the House. It is because the DUP and Sinn Féin walked out the door. That is why we are here. However, we agree now that we are in the right place, and we will move on. We support the Bill.

Photo of Rachel Woods Rachel Woods Green 2:00 pm, 1st June 2020

Whilst I appreciate the need for the reclassification, and what this means for the future of social housing in Northern Ireland within our current system, we need to get back on target and provide stimulus for at least 2000 new social homes per year. I hope that this Bill does everything that it says on the tin, and that it forms a part of what we need to do to get out of the housing crisis that we have been in for years.

I would like to raise a few concerns and bring them to the attention of the Minister, if she would not mind addressing them later.

There is an issue with the potential to create inequality in access to social housing and home ownership, as has been mentioned by some in the Chamber. Many tenants in social homes aspire to home ownership, and the right to buy is often their only hope of fulfilling that aspiration. However, administering the social housing allocation system is difficult. Could this change allow a route to home ownership for some tenants, and not for others, depending on the landlord? Will it contribute to some tenants consciously turning down a reasonable offer of accommodation, when there is no possibility of future home ownership? If that proves to be the case, it will not reduce housing stress or the housing list.

The right-to-buy scheme has been much discussed and debated previously in the Chamber. It has been abolished in every other part of the UK, and rightly so. Because of it, we have seen the privatisation of social housing. Over 100,000 social homes were lost to private ownership, and they have not been replaced. As of March 2019, more than 123,000 homes have been removed from the social housing stock since 1979. Social housing does not exist to provide private homes.

There is a reference to the right to buy scheme in clause 7 of the Bill. I ask the Minister whether she is minded to bring additional legislation to the House in order to extend the cessation, or voluntary nature of it, to NIHE properties, bearing in mind that there is no voluntary scheme in Scotland or Wales. If so —.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I thank the Member for giving way, where a previous Member would not. Following Ms Anderson's scathing critique of the right-to-buy scheme, does the Member concur with me that it is frankly bizarre that she was entirely dismissive of remarks raised by me and others, that the scheme should be extended, or the — I have lost it now — should be extended to the Northern Ireland Housing Executive as well, who sell 10 times more homes per year than housing associations?

Photo of Rachel Woods Rachel Woods Green

I think that the Member has made his point. We will leave it at that.

When does the Minister envisage this will be? The matter was consulted on in June 2018. Does she think there is need for another public consultation?

Clause 8 allows a housing association offering a voluntary scheme to receive compensation from the Department in the form of a grant. As Mr Allen has asked, will the Minister outline how this will work and what it will look like?

Does the Minister consider that that could incentivise housing associations to continue to operate a right-to-buy scheme by a different route, which would increase the pressure on social housing? Where is the oversight? Does she agree that that may reduce the number of homes that are available to meet housing demand for people who need it? It is quite unclear as to why that condition is necessary or appropriate in the context of the well-documented pressures on social housing supply. Perhaps, the Minister will address that. Is that a requirement from ONS?

Furthermore, has any consideration been given to the removal of clause 8? Would the conditions that are required for the reclassification of housing associations be met now? If so, could it be considered for future legislation alongside repeal of the statutory house sales scheme with regard to Northern Ireland Housing Executive properties?

Clauses 1 and 2 change the relationship with regard to regulation between the Department and housing associations. Whilst I understand that that is a required part of the reclassification requirements with the ONS, I would like to get assurances that that reclassification would not result in the deregulation or regression of departmental oversight. Also, does the Minister support calls for an independent housing regulator to be set up here, similar to that which exists in the rest of the UK? Whilst I understand that the establishment of one is not within the scope of the Bill, safeguards are needed not only for the tenant but for the public interest in housing associations and to ensure that there is a regulator that is separate from public policy responsibilities and located outside government. That would follow best practice in the field, as has been established in Scotland. I hope that the Minister considers that seriously and implements it at a later date.

Additionally, a new housing strategy has been discussed and was part of the Executive's commitments in the 'New Decade, New Approach' document. Suitable homes need to be provided for people who need them, as well as bringing the existing stock up to standard through deep retrofitting, tackling fuel poverty, providing green energy sources, and looking at and acting on the conditions of properties. I am sure that many Members have experienced living in homes that are not up to standard or have been contacted about constituents who have to live with, say, serious damp problems, which can cause health issues for them and their young families, only to be told that they need to keep their windows open longer or put on a dehumidifier, when, without serious work, the conditions of the house will never be good enough. That has to be done with the underlying principle of keeping people in their homes. I would be interested to hear of any progress in the development of a new housing strategy and whether any of the issues that I have raised will be addressed in it, perhaps as part of a rolling programme of legislation.

The housing waiting list is at an unacceptable level. As of March 2019, nearly 38,000 households were on it. The people who need to be housed are not being housed. Homelessness figures are rising. It is not just about the people who sleep on the streets, for whom it has taken a global pandemic for people to act, but for people who are in temporary accommodation and who do not have secure permanent housing.

The social housing stock has been reduced significantly. In the 1970s, there were 155,000 Housing Executive homes. In 2016, there were around 88,000, plus the 40,000 housing association houses. In 2019, just over 85,000 homes were managed by NIHE, with much of that stock being in need of significant maintenance or, indeed, replacement. That is not to say that that reduction is down solely to the right to buy, but that has been a major part of it. Therefore, further opportunity exists here. As we look to the governance of housing associations and the changes that are proposed, we can, again, look at the governance of the Housing Executive and the possibility of building new homes.

Photo of Gerry Carroll Gerry Carroll People Before Profit Alliance

The Bill seeks to reverse the 2016 decision of the ONS to loosen controls, deregulate and devolve right-to-buy powers to individual housing associations, as others have said. The proposals that are contained in the Bill follow a similar pattern to those of other jurisdictions in Britain, which all faced the same reclassification issue and have already returned housing associations to the private sector. People Before Profit opposes the main thrust of the Bill because it seeks to privatise and deregulate housing associations while, at the same time, maintaining and possibly increasing the public funding that they receive.

Clauses 1, 3, 4, 5 and 6 all restrict the Department's powers. For example, clauses 1 and 6 change the Department's power to give consent for the disposal of land or merging of housing associations to a requirement for a housing association just to:

"notify the Department of the action."

That could bring about an increase in the ability of housing associations to dispose of more land while merely informing the Department along the way. That means, of course, that there would be even less accountability and oversight.

Land equals wealth, so we need to have a system in place in which the sale or transfer of land is tightly monitored, scrutinised and focused on. We know the power and wealth that developers have; we cannot see a situation in which that increases. Aspects of the Bill could lead to that. It is worth remembering that, not too long ago, we witnessed and discussed the National Asset Management Agency (NAMA) transfer and the scandal associated with it: the £1·2 billion transfer of property — the biggest public transfer in the history of the state.

When we talk about the transfer of land, we need maximum accountability: the Bill proposes to do the exact opposite. The proposers of the Bill justify it — some Members have already justified it — on the basis that housing associations, when they are private bodies, can borrow funds that do not count towards overall public borrowing. That means, in theory, that the social housing grant given to housing associations to build new homes should be leveraged to build more houses than if the Northern Ireland Housing Executive alone was left to build houses.

The reality is very different. Since 1995-96, the Housing Executive has been banned from borrowing and building homes. In that year, the Housing Executive built 1,360 homes; the housing associations built only 1,040. On only two occasions since, in 2001 and 2012-13, has the housing-association sector built more than the 1996 NIHE benchmark.

The memorandum attached to the Housing (Amendment) Bill claims that, in 2019-2020, the housing association sector has a target of 1,850 new home starts. That target is simply not credible, as the new start level actually achieved in the previous year was just 980. The sector has never achieved such a level of new starts, the highest being 1,440 in 2011-12. The memorandum also states that the Department has allocated the housing association sector £146 million for new homes in 2019-2020. However, just imagine what the Housing Executive could do with £146 million of extra funding, especially if it were actually allowed to build houses.

The policy of funding housing associations while not funding the NIHE to build new public housing has been a failure over the past 25 years. It needs to stop. We should see the Housing Executive as the main provider of housing here and resist all attempts to run it down, privatise it, or reduce its funding.

We reject the reprivatisation of housing associations. Therefore I cannot support the Bill as it stands. Housing associations should remain public bodies and, ultimately, be integrated into the Housing Executive, becoming subject to full, comprehensive public accountability for the hundreds of millions of public money that they get every year. If housing associations want to return to the private sector, surely they should not be receiving such vast amounts of public funding.

I have mentioned the fundamental problems with the Bill, and, for those reasons, I cannot support it. If the Housing (Amendment) Bill does progress, and it is likely to, through its Second Stage, we will explore all options to amend it and raise concerns about it. As I say, we wish to see social housing provision balanced more fully towards public spending and to the Housing Executive playing a key role in that. We will challenge the idea that the market knows best and that the market should provide housing generally.

It is worth mentioning that, as the Member from Foyle said, housing association rents are, on the whole, cheaper than the Housing Executive's. The Housing Executive is more accountable. Whilst myself, and other Members, I am sure, have regular contact with the Housing Executive through raising concerns and challenging it, it is a better provider of public housing in general.

It is worth mentioning that, in 2017, the Housing Executive had 1,000 empty properties. Surely, more could be done to help people on the property waiting list by fixing up those properties and allocating them to those who need them.

In conclusion, we have heard comments about a new normal in regard to coronavirus, but I do not think that the provisions of the Bill reflect that or reflect the growing appetite of people to see stronger public housing and a stronger role for the Housing Executive in that. So, for those reasons, I will be opposing the Bill's Second Stage.

Photo of Deirdre Hargey Deirdre Hargey Sinn Féin 2:15 pm, 1st June 2020

I thank all the Members who contributed to the debate. On the face of it, I know, the Bill looks very technical, but at the heart of it is access to homes for those in our communities who need it most. It is only with the reclassification that we are able to deliver more social and affordable homes to our people in the coming years. All Members, I hope, will accept that we urgently need to enhance what we deliver, particularly in the context of the New Decade, New Approach commitments. The legislation, if passed, will facilitate the reversal of the classification of housing associations and see them once again classified to the private sector, ensuring that they can continue to be our partners in developing social homes for people. Associations will continue to have discretion over their borrowing. The Executive will not be constrained by having to provide cover for that borrowing, and much-needed Executive funds will not be required to support co-ownership.

I will just comment on some of the issues that were raised in the debate. I feel like I keep getting up in the Chamber and saying that accelerated passage is not the way that I want to do business, yet nearly everything I have brought has gone through by accelerated passage. It is just because of the nature of the issues that I have been dealing with that there has been the urgency with which I had to bring things forward, and that is particularly the case because of the pandemic, which started probably fewer than six weeks after I took up the post of Minister for Communities. I make no apologies for bringing it this time, because there is a financial consequence that means that there would be a consequence for the number of social houses that could be built and a consequence for co-ownership houses. I know that some Members touched on the fact that there was a delay on that in 2016, so why try to delay it until 2020-21? Why try to delay it for up to another year when we can move on it now and make those changes to ensure that that £21 million, which would otherwise be diverted, goes back into the social housing development programme?

I know that there has been a lot of talk about the right to buy —.

Photo of Deirdre Hargey Deirdre Hargey Sinn Féin

No, you are OK. You have had your say.

I know that there has been a lot of talk about ending the right to buy, and there have been concerns about that. The clause abolishing it is in ours as it is a compulsory scheme based in legislation. In short, it evidences the sort of controls that ONS based its decision on. There is a key difference here from what happens in the other three jurisdictions in that our scheme is set out in law, which is not the case elsewhere. There are particular reasons for the scheme here and what ONS was uniquely saying about the right-to-buy scheme here at this time.

That said, I want to bring forward — I said this in my opening speech — as soon as possible and in the coming period considerations looking at the right to buy for Housing Executive properties as well. As someone who grew up in a Housing Executive property and still lives in a working-class estate in the Market area in south Belfast, I see the impact of that right to buy, where over 50% of the housing in that community has been sold off. Ultimately, when those houses get sold, it seems like a good idea at the time for people to have ownership, but, when they are sold on, that creates a waiting list in that community and people are living in hostels for five or six years and cannot get homes. We need a wider plan. The reclassification will not fix everything, and I said that it was my intention to bring forward a wider plan that looks at housing going forward.

I have been in post since January, folks. We have been hit with the biggest pandemic that we have seen in our lifetime, so this will take a bit longer for those reasons. I am committed to bringing that forward as quickly as possible, looking not only at issues like affordable housing for people who want it and increasing the availability of social housing to ensure that those who need it most get access to it and other things like cooperative development housing, which would also use private-sector entity for borrowing — that is an important point — just like social enterprise.

I know that some touched on rights in housing, and I agree that it should be a priority in the Programme for Government. Those discussions are still ongoing, and, again, the COVID pandemic means that we are getting back into everyday business and to where we were in January. However, I will obviously make strong representations at the Executive, because I clearly see housing rights as human rights and human rights as housing rights. I am very clear on that. Obviously, the role of housing in building sustainable communities is something that I really value as well in terms of building the vibrancy of communities but at the same time ensuring that we have a housing system that provides for those who need it most and makes sure that there are protections for those who need them most as well.

There was some talk around clause 8 and the grant payments. Obviously, that is only for housing associations in respect of discount to a tenant in a social home. The terms and conditions for it are still being developed; they are not there yet. I will work with housing associations and others, because, even in the devising of this, we have been working with housing associations, the housing policy forum and others, and I will continue to do that. I know that Members have raised these issues specifically, and our officials will keep an eye on who raised them and will ensure that we update Members, as well as the Committee, as we go along.

In terms of regulation, these are technical changes. I know that they change things slightly, but some of the issues were around oversight and regulations that the Department has never had to invoke on housing associations up to this point. The key part is that the regulator will continue to have powers to make an intervention, and that engagement will be critical in the time ahead.

Members raised homelessness and said that this was only being done in the midst of a pandemic. I acted on street-based homelessness within six weeks of coming into office to ensure that people were not out on the street and that there was temporary accommodation for them. I want to build on that in the time ahead. That said, street-based homelessness does not reflect the even bigger homelessness issue of those who sofa-surf, are in overcrowded accommodation or have been in hostels for far too long, particularly in areas of highest and greatest need. North Belfast and Derry were mentioned; there are other areas as well. The issue of urban and rural is something that I am seriously considering, because the housing development programme has to be primarily targeted at those areas of greatest need as well. They have to see delivery. Someone waiting eight, nine and 10 years for a home is basically unacceptable, and we need to put interventions in place to ensure that that does not happen.

There has been a lot of talk about housing being a critical issue. It is a human rights issue, and I know that some have talked about civil rights. Obviously, we see on our screens the impact of America — the issue of National Asset Management Agency (NAMA) land and regeneration. As a Minister, I am from a working-class community, as I said. I grew up in a Housing Executive estate, and I am proud of my class identity and the community that I have come from. I am a community activist, and I come from parents who were civil rights activists. They helped, as early as the late ’50s, going into the ’60s, in the the initial civil rights campaigns. That was around the housing in west Belfast at that time and the surveys that were carried out. I do that now in the community that I live in. We have taken on NAMA developers. I have gone to court to challenge NAMA developers. I have protested on the streets about NAMA development and the impact that it has. I have been an activist on these issues as well, and, of course, I am attuned to all to them. Land — public land, particularly — has to be used for the greater public use and should not be sold off just for private development. I am in tune with all of the issues, and I have said before that I am keen to engage with any Member who has recommendations or suggestions, not just on this — I hope that people can understand the reasons why I have to bring this legislation — but on the wider housing development programme. We have to get it right. We have to set a direction of travel to ensure that we deal with the issues that have been raised around underinvestment, restructuring, the revitalisation of the Housing Executive, looking at the mixture of housing and tenures and ensuring that those who are in critical need have a roof over their head.

I appreciate all the questions, points of clarity and points of view that Members have raised. My officials are taking a report, and, where we need to, we will write separately to Members who raised specific issues that, maybe, I have not particularly answered in the summing up. I remind Members that the key elements of the Bill are the introduction of a notification process, replacing the current consent process; the more specific framing of the circumstances in which an inquiry may be launched; and the ending of the statutory house sales scheme for housing associations. My purpose in bringing forward the legislation is to ensure that housing associations can be returned to private sector classification and, with that, provide protection for social housing development and affordable housing programmes.

I thank Members for their engagement and support until now, and I thank the Committee for its deliberations. I commend the Bill to the Assembly for its approval.

Question put.

Some Members:


Photo of Christopher Stalford Christopher Stalford DUP

I will put the Question again, now that Mr Carroll is on the record.

Question put a second time and agreed to.


That the Second Stage of the Housing (Amendment) Bill [NIA 6/17-22] be agreed.

(Mr Deputy Speaker [Mr Beggs] in the Chair)