Housing (Amendment) Bill: Final Stage

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

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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.