Housing (Amendment) Bill: Final Stage

Executive Committee Business – in the Northern Ireland Assembly at 8:15 pm on 30th June 2020.

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Photo of Carál Ní Chuilín Carál Ní Chuilín Sinn Féin 8:15 pm, 30th June 2020

I beg to move

That the Housing (Amendment) Bill [NIA Bill 06/17-22] do now pass.

I welcome the further opportunity to speak about the Bill and why it is important for the future of our social and affordable housing programmes. Before I speak to the Bill generally, I would like to address a couple of issues that were raised in previous debates.

Photo of Jim Wells Jim Wells DUP

I thank the Minister. I just want to outline the timetable of the debate for Members and the Minister. The Final Stage of the Housing (Amendment) Bill has been moved. The Business Committee has agreed that there should be no time limit for this debate and I will call the Minister to continue the debate on the Bill. As it is a debate on primary legislation, there is no time limit for speeches. So far, six Members have indicated that they wish to speak in the debate. Hopefully, it will not last too long. Minister.

Photo of Carál Ní Chuilín Carál Ní Chuilín Sinn Féin 8:30 pm, 30th June 2020

Thanks very much for that clarification: it was almost an invitation to Members to add their name to the list and talk for as long as they want. I assure Members that I want to cover only the issues that are pertinent to the Bill and to provide clarification on issues raised in the previous debate. It is important that people get that clarification.

As I was saying, Members raised a concern, as did I, about the very late publication of the report on the two consultations on reclassification. During the Consideration Stage debate, I said that I would establish what happened, and I have done so. I wrote to the Chair of the Committee for Communities asking that an explanation be provided, and I will share the response:

"Minister Hargey considered the report alongside the draft Bill and related materials. She approved the report for publication on 18 March. Officials were advised of this on 6 April, during the period when IT equipment was limited, and rapid decisions were being made on adjustments to allow remote working. At that point, the report should have been prepared for publication, but, due to an oversight, this was not done. That was discovered on 1 June, at which time the officials took action. The report was issued to the Committee on 4 June, and it was published on the Department's website and sent to all MLAs on 12 June. The officials in question have accepted full responsibility for the oversight. They have apologised to me and asked that their apology be extended to the Committee, and I apologise to the Assembly."

The second issue that I want to address is what appears to be a misunderstanding of the role of the Office for National Statistics (ONS). Some Members referred to ONS having rejected the amendments. I can confirm that that is not the role of ONS. The decision on what is or is not included in the Bill is one for the Minister, the Executive and, indeed, the Assembly. ONS will simply review the reclassification decision once the legislation receives Royal Assent.

When I spoke about the possibility of legal challenge, that was not about ONS. To be clear, it was about the risk that the Member for Foyle Mark Durkan had raised in his proposed amendments. I believe that the inclusion in the Bill of provisions to abolish the Housing Executive's sales scheme would cause a legislative competence problem. That is because taking away the right that Housing Executive tenants currently have to purchase their home has the potential to engage article 1 of protocol 1 to the European Convention on Human Rights (ECHR), the right to property. In a process driven by the pressing need for housing association reclassification, the abolition of the Housing Executive's sales scheme would interfere, without any clear reason, with that right to property. Any Assembly Bill provision that is incompatible with ECHR rights is not law, so the removal of the right to buy might be considered by a court not to have been effective.

The only supposed basis for abolishing the Housing Executive's sales scheme as part of this Bill was to prevent a challenge arising from the difference between the right to buy and those who rent from a housing association not being able to do so. However, no such challenge could be successful, because the reason for taking away the right to buy from housing association tenants simply does not exist in relation to Housing Executive tenants. Removing the right of housing association tenants is a clear and integral argument in achieving reclassification by ONS, and it requires the abolition of the housing associations' sales scheme.

A court is likely to consider that abolishing the Housing Executive's sales scheme through this Bill would unjustifiably interfere with its tenants. There are good grounds to consider the abolition of the right to buy of Housing Executive tenants, but that needs its own policy justification. It simply cannot exist in a Bill that addresses a specific problem: the reclassification of housing associations.

Every Bill, once it has passed Final Stage and before it proceeds to Royal Assent, is passed to the Attorney General for him to consider whether it is within the competence of the Assembly as defined under section 6 of the NI Act. Should the Attorney General consider that the competence of the Assembly is in question, then, before the Bill proceeds to Royal Assent, the attorney may refer the Bill to the UK Supreme Court for a determination. In our current circumstances, this outcome would present a significant and costly delay to the Bill.

If we bring forward proposals with a different and broader objective, as I and my predecessor are committed to do, as part of a different Bill and a process that was considering how to maximise the supply of social housing, the courts would be more likely to consider abolition of the Housing Executive sales scheme as justified in the public interest and, hence, more likely to fit within the competence of the Assembly.

We should address the inequity between Housing Executive and housing association tenants. That is an issue on which the Department has been very transparent in the four years developing this legislation. The Department's consultations on the Bill explored the point exhaustively. They gave particular consideration to the issue of the Housing Executive sales scheme for that very reason. That supported what, I believe, is a correct conclusion: achieve reclassification safely and securely in the first instance through this Bill, and then address the Housing Executive sales scheme afterwards. My predecessor Deirdre Hargey and I committed to do that with all urgency. When my Department brings forward proposals for that scheme, it will be considered properly, in its own right and not as an add-on to a Bill proceeding under accelerated passage.

I remind the House why we need this legislation, and why we have worked, at speed, to put it in place. ONS determined in 2016 that housing associations should be classified as public sector because they observed a level of control of housing associations by the Executive through my Department. That is why the sole focus of the Bill is to remove or amend those provisions in current housing legislation that provide for that control.

The Bill will replace current consent processes, for a number of functions carried out by housing associations, with a notifications process. It will more clearly frame the circumstances in which the housing regulator may launch an inquiry into the activities of a housing association, and provides that those must be based in failure, or suspected failure, to comply with legislation. The Bill removes the power of the Department to petition for the winding-up of an association, a power that was never used. Creditor bodies can still use this. Finally, the Bill proposes to end the statutory house sales schemes for housing associations and introduces a power to enable the Department to support a voluntary house sales scheme.

I also remind Members and, in particular, I want to reassure tenants, that the Bill will not see a decrease in the regulatory authority exercised by the housing regulator. It does not diminish the relationship between the tenant and the association, nor the tenant's ability to engage with the regulator.

The approach to the legislation has been based on the direction from the Executive in September 2016, and does only that which is necessary to achieve reversal of the ONS decision. The ONS's reclassification decision put at risk the financial arrangements. We have to allow a register of housing associations to provide homes for our most vulnerable and to operate the Affordable Homes programme, which provides a route into affordable home ownership for many.

Passing this legislation will protect those programmes and ensure that the social housing development programme, and the Co-ownership programme, can continue in the future.

Just last week, I announced a £10 million investment from my Department to enable the Co-ownership scheme to open up again to new customers, following a pause in applications since March, due to COVID-19. While I am glad to be able to support the Co-ownership scheme, it is worth remembering that that £10 million, in itself, is equivalent to the cost of 150 social homes. It is a far better outcome for the public purse, and for those people who are desperately in need of social housing, that this money comes via financial transaction capital (FTC), which it will be able to as a result of this Bill.

I am committed to do more to deliver for those who are in real need, and this Bill means that we are levering in all the financial resources we possibly can to make homes available to those in need.

The maintenance and, hopefully, expansion of those programmes will also help the construction industry. I think that all Members will agree that having a strong construction sector will help to support economic recovery as we move into the recovery phase of dealing with this horrible pandemic.

In the previous debate on the Bill, we discussed the revenue that has been generated by the house sales schemes in the past and what has been done with the money raised. Capital receipts from housing association sales continue to provide funding which is used to deliver the social housing development programme. It must be reinvested in the provision of new social housing within two years, though associations can also use some of the capital that been generated to cover fees, such as solicitors' costs and valuation fees. The Housing Executive's available records indicate that £104 million has been generated by housing association sales, of which £89 million has been reinvested in new builds.

The position is different for the Housing Executive. Receipts from its house sales scheme are returned to the Department each year for consideration in the context of funding in the wider Department for Communities budget. Receipts from Housing Executive house sales since 2008-09 have been in the region of £170 million. The level of receipts that the Housing Executive, through the Department's capital grant, can retain each year is determined by the Department, with the balance used to fund other departmental priorities. Any receipts that the Housing Executive may retain through capital grant are used by its landlord services to fund in part, along with its own rental income, improvements to its own stock. It is not used to finance new build programmes. As I have said previously, there is a huge need for investment in Housing Executive stock if we are to ensure that its homes are fit for the future. That is a much wider problem. I am sure that we will return to it at a future stage.

I want to acknowledge the many stakeholders who have been involved in the Bill. It is right that I offer my thanks for all their contributions, and also thank the Committee for Communities for its support in getting the Bill through the House by accelerated passage.

Finally, I want to thank those in the Department for Communities and indeed in the Assembly, and the various legal teams, who have worked on the Bill and enabled it to get to this stage. I hope that all parties can give the Bill their full support. I commend the Bill to the Assembly.

Photo of Kellie Armstrong Kellie Armstrong Alliance

It is not very often that I have the Dispatch Box in front of me. I wish our Chairperson well. She is unable to be here due to a health issue. She will have the Dispatch Box back the next time.

I want to thank the Minister very much for coming forward and getting the Bill to this stage. It is almost 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. During that period, we have relied on derogation after derogation from the Treasury to ensure that the impact of that technical issue is minimised. However, that derogation runs out in March 2021. I am, therefore, glad that we have reached the Final Stage of a Bill that provides the housing association sector with some certainty.

The Bill itself is relatively straightforward, but the road to Final Stage was not quite so straight. My Committee colleague Mark Durkan presented a number of amendments, which were considered very sympathetically by Members, but did not get the same level of support when it came to the vote. It is understandable that the omission of the Northern Ireland Housing Executive's house sales scheme should be questioned when the housing associations' right-to-buy scheme is included. However, again, in a narrowly scoped Bill, it is the housing associations' right-to-buy scheme that is of key importance.

The status of the Housing Executive or its house sales scheme are not matters of concern for ONS, as has been highlighted by the Minister. The commitment that has been given by the Minister to quickly bring forward proposals on the future of the Housing Executive's house sales scheme is accepted by the Committee. Indeed, that will likely form part of a much wider and detailed consideration of the reform or revitalisation of the Housing Executive. The Committee looks forward to engaging with the Minister on that issue in the autumn.

As the Minister has highlighted, during discussions on amendments, it was made clear that the Committee was not in receipt of the analysis of responses from a consultation that the Department had had on key issues relating to the Bill.

When Minister Hargey briefed the Committee on 13 May on the need for accelerated passage, I do not believe that it would have changed the Committee's view, but it was an oversight that should not have happened, and that has been accepted.

I am glad to inform the House that, as per Minister Ní Chuilín's comments given in the House, the Committee was briefed last week on this matter by a senior departmental official. The Committee accepted that the cause of that oversight was no more than human error and was reassured that the Department is reviewing its procedures to ensure that it does not happen again. I thank the Minister for taking the issue so seriously and getting it resolved quite quickly.

The urgent need to reclassify registered housing associations is clear. These housing associations are the cornerstone of our social housing development programme. To be classified as public bodies renders their ability to raise private funds to build homes an impossible task. There is a tangible impact on those organisations as a result of how they are classified by the ONS.

It is the case that the ONS decision has prevented the Executive accessing funding through financial transactions capital — a government loan scheme that was used to support the housing co-ownership scheme. Clearly, that significantly impacts the funding of the Northern Ireland Co-ownership Housing Association and reduces the opportunity for people to get a foot on the property ladder. Maintaining this funding is costing the Department £3 million per month. That is money that can be spent on a range of other priorities, and any further delays mean that other important issues are denied that funding. The Committee accepted the Department's position that the Bill had to be passed before the summer recess to reduce any further costs to the Department.

The Committee was informed that the ONS will review the Housing (Amendment) Bill once it has received Royal Assent, so the sooner that is achieved, the sooner ONS can reverse its decision. Registered housing associations will then have the confidence to plan their housing programmes and to access financial transactions capital, and that can be restored. At a time of uncertainty, the more certainty that the Assembly can give the better.

I will conclude where this process began, with the request for the Bill to proceed via accelerated passage. No Committee is ever entirely happy with accelerated passage, and the reasons to support it have to be important enough for the Committee to agree to set aside its statutory scrutiny role. In this case, the Committee agreed that the reasons were that important and the financial and wider societal issues warranted supporting the Minister's request. Today, we are glad to see the Bill reach its Final Stage. We look forward to it receiving Royal Assent and hearing, hopefully, soon after that, that the ONS has reversed its decision.

As an Alliance representative on the Committee, I thank the Minister for taking this forward so quickly. There are issues that we need to deal with with the Housing Executive, but given the fact that, today, we heard from the Finance Minister how much money is handed back because we cannot access the financial transactions capital, it is right and proper that we process this as quickly as possible.

Photo of Sinéad Ennis Sinéad Ennis Sinn Féin 8:45 pm, 30th June 2020

I am not going to rehash the many arguments in support of the Bill that have been made over the last number of weeks, but I reiterate my praise for Minister Hargey and Minister Ní Chuilín in their determination to achieve the reclassification of the housing associations. We know the knock-on detrimental effect of not achieving reclassification. It has been well articulated by Members across the Chamber in the last number of weeks, not least of all the effect that it would have on the ability to build much-needed social homes, which would see this drop by 50% in real terms. I know that is something that none of us in this Chamber could stand over.

It was useful for the Committee to have received clarity from departmental officials last week on the ONS reclassification and why the Housing Executive could not be included in the Bill. It was also very encouraging to hear officials reiterate Minister Hargey's commitment to bring forward proposals around the Housing Executive sales scheme. That would give the Committee proper time for scrutiny, which is what we were all asking for. I am glad to hear Minister Ní Chuilín reiterate her support for that course of action here today.

New Decade, New Approach brings a focus on building homes in areas where objective need has been identified. Sinn Féin believes that adequate housing is a human right, and we will continue to promote that across the island. The unacceptable level of homelessness, North and South, needs to be addressed, and we are certainly up for doing that. Sinn Féin believes that the building of social and affordable homes should be targeted in areas of highest need, and rural areas need to be included and should not be forgotten about in that respect.

As an MLA representing a largely rural constituency, I know that housing development in rural locations has missed its target over each of the past five years. The Housing Executive's rural and place shaping teams need to work with rural communities and their representatives to examine their housing needs and support housing associations in the delivery of new-build schemes to address social housing need in areas such as south Down.

The Bill is about maintaining the support and supply of new homes, which is necessary to help families and people to access housing and have the security and dignity of a home. The Assembly must ensure maximum delivery of social and affordable homes, which will undoubtedly be achieved by the passage of the Bill. Sinn Féin will support the Bill.

Photo of Mark Durkan Mark Durkan Social Democratic and Labour Party

I support the Bill. The Minister and other Members have outlined the necessity for the Bill and the undoubted benefits that it brings to enabling our housing associations to access more funding and build more much-needed homes as our housing waiting lists continue to spiral and more and more families face housing stress and homelessness. We must take every step within our power to address this shameful situation and afford our people the fundamental right of a roof over their head. Not only will the Bill allow us to build more social housing, but it will free up finance to support co-ownership, allowing some people an affordable housing option and a chance to get on the property ladder. I welcome the Minister's recent announcement in that regard.

While I support the Bill, and always have, I do regret the fact that my amendments at Consideration Stage were not supported. I have today listened to the Minister's explanation and I do accept it, although I still then question why the scope of the Bill was not wider in the first place. I am going to touch again on the rationale behind those amendments, not to try to argue for them again, but just to underline the urgency and importance of bringing that other piece of work that the Minister has promised to the Assembly.

Ending the mandatory right to buy in the Housing Executive as well as in the associations will stop us haemorrhaging over 400 homes a year from our social housing stock. For context, the answer to a written question that I received from the Minister this afternoon revealed that, in the past five years, we have built a paltry 5,270 new social homes. We have purchased just over 900 off the shelf and, through existing satisfactory purchase and rehabilitation, added around another 1,200 units, giving us a grand total of 7,411 additional social housing units in five years. In the same time, we have sold off over 2,000 units through the house sales schemes in the Housing Executive and the associations. This is madness. The Minister has given a commitment to bring forward a separate piece of work, which we heard about again from her today, to address the mess that has been made of the Housing Executive almost 10 years after a fundamental review of it, and I urge her to do so without delay. I welcome the ambition outlined by the Minister in a press release earlier today, and commit myself to working with her, and with anyone and everyone, to realise and surpass that ambition.

We as an Assembly must also support the Infrastructure Minister in her attempts to secure vital funding for Northern Ireland Water, because no drains means no cranes. If we do not have adequate waste and water infrastructure, out best-laid plans for an ambitious social housing development programme will almost certainly go awry. I commend Minister Ní Chuilín for how she has taken on the baton from her predecessor and almost got to the finish line — it is very much in sight — with this Bill. The Bill will satisfy the ONS requirements to ensure the reclassification of housing associations. It is a start. It is a foundation on which to build — and build and build. I support the Bill.

Photo of Jim Wells Jim Wells DUP

I said earlier that there was unlimited time available to Members, but I am glad to say that none of those who have taken part so far have seized upon that to make a very long contribution. We have just two Members left, Mr Andy Allen and Mr Gerry Carroll. Again, whilst I remind you that time is unlimited, I am sure that you will exercise restraint.

Photo of Andy Allen Andy Allen UUP

Mr Temporary Speaker, I assure you that I will exercise restraint and will not speak for too long. I am sure that Members across the Chamber will welcome that.

I thank the Minister for setting out to the House and providing various updates to it on the queries that were raised at Consideration Stage. Indeed, I thank the Minister for the haste in which the Department came forward to the Committee to address the oversight around the consultation report. I agree with the Deputy Chair and do not believe that it would have had any bearing on the decision process that we have undertaken in the House.

I welcome the passage of the Bill, as all Members across the House do. It is a very welcome development. It is a Bill that has been in the making for nearly four years. Housing associations will all, of course, also welcome the Bill and the much-required clarity and certainty that it will bring for them. I also welcome, as my Committee colleague across the way did, the press release from the Minister setting out her housing programme, which we received today. Indeed, it is referred to as an ambitious housing programme, and I am sure that many Members will agree with the Member across the way who said that, in previous years, housing programmes have been less than ambitious. It is widely recognised that we have not been building enough houses, year-on-year, to meet the demand.

There has been much talk in the House today in various other debates, which I will not stray into, about our Assembly staff, and rightly so. Our Assembly staff and, indeed, my own staff are invaluable to me. A significant area of importance, although it is not the only one, in my constituency office is housing. I have heard many Members speak on that area, and I have spoken to other Members across the House about the many representations and queries that they receive from constituents in relation to housing. Those are not just about repairs to Housing Executive and housing association properties but are predominantly about the lack of social housing.

We in this House really do need to be ambitious. We need to back our words up with actions, and we need to start delivering. I welcome the Minister's announcement of the £10 million investment in the co-ownership scheme, and that is another scheme to enable, help and support individuals into affordable housing. I am sure that the Minister will be looking at other ways to ensure that she can maximise the uptake of financial transactions capital. Indeed, my party leader has pointed out today that the Finance Minister has indicated that FTC funding may be available. I hope to see the Communities Minister lobbying the Finance Minister to get that funding and invest it into our housing stock. I promised to be short, so I will leave it there.

Photo of Jim Wells Jim Wells DUP

Last but most definitely not least, I call Mr Gerry Carroll.

Photo of Gerry Carroll Gerry Carroll People Before Profit Alliance

Mr Temporary Speaker, this may be one of the rare times that I am short. Members and you may be delighted to hear that. I will not speak at length. I have raised issues several times in debates during the various stages of the Bill.

I will quickly repeat my concerns and put them on record for the Final Stage. If passed, the Bill will restrict the powers of the Department in relation to the disposal of land and the merging of housing associations. The Bill will loosen controls, allow for deregulation and, in effect and despite comments to the contrary, will reprivatise housing associations. Going by previous debates, it is unlikely that any other Members or parties will support me on this, but I think that it is important that I and other smaller parties put on record their opposition to measures that they are opposed to. I put on record my opposition to the Bill and firmly state my concerns with it. I think that housing associations should remain as public bodies and, ultimately, be reintegrated into the Housing Executive.

Photo of Carál Ní Chuilín Carál Ní Chuilín Sinn Féin

I appreciate every contribution that has been made. This process, albeit under accelerated passage, has been very inclusive. Even the debates that we had about our differences were done mostly in a measured way, and I do share some of the concerns.

When Members who have spoken, and even those who have not, read Hansard, I hope they will accept that, since the last debate, I tried to get answers to some of the queries that were raised then. I also tried to address some of the concerns that Mark Durkan raised through his amendments. I agree that, to proceed, we need the Housing Executive's house sales scheme. The difficulty with this is that they needed accelerated passage to meet the deadline. Other than that, I assume that this would have been taken forward just like any other legislation. Indeed, the less accelerated passage we use the better because, as MLAs and people who are looking at legislation, it should be the last resort rather than the first option. That has been accepted.

Not to rehearse all of the comments already made, but just under 7,500 homes over five years is quite disgraceful. That is on all of our watches and is quite disgraceful, given that there are 40,000 people on the housing waiting list and at least 26,000 in housing stress. That is a responsibility that we all have to step up to. Gone are the days when I had difficulties — I admit — around co-ownership because I felt that there should have been more options; I still feel that there needs to be more options. However, I know, from my own family and constituents — and we all get housing queries from constituents — that some families are paying £685 a month in rent to the private rented sector and some are paying £328 a month for a co-ownership mortgage. We talk about poverty, for someone who is on family or working tax credit, trying to pay their rent and not getting a house for years in north Belfast, west Belfast, Derry or right across. We all have really big pressures.

We need to be far more ambitious. As I said today, for me, it is the floor rather than the ceiling. I want to look at ways in which we can deliver more social housing. I want to look at surplus land and work with colleagues in the Executive to ensure that the infrastructure is there. I also want to look at opportunities for people to buy into different options to try to get the housing waiting list reduced.

This Bill, in its Final Stage, will mean that we will meet the commitment that most of us signed up to in New Decade, New Approach, because we could not have enabled the Co-ownership scheme to thrive without the financial transactions capital that it needed. Certainly, the housing associations and, indeed, more so, the Department, would face penalties of £3 million a month if this Bill does not go through. So, once again, I thank all the officials and everyone who brought this Bill to this stage for their contributions, and I commend the Bill to the House.

Question put and agreed to. Resolved:

That the Housing (Amendment) Bill [NIA Bill 06/17-22] do now pass.