Clause 21 - Exemption of a registered provider of social housing

Welfare Reform and Work Bill – in a Public Bill Committee at 3:30 pm on 15th October 2015.

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Amendments made: 150, in clause 21, page 20, line 45, at beginning insert ““at least”

This amendment and amendment 151 permit a private registered provider to whom a direction in the terms of clause 21(2)(b) is issued to make a reduction in rent, instead of keeping the rent the same.

151, in clause 21, page 20, line 45, for “the same as” substitute “no more than”.

152, in clause 21, page 21, line 2, at end insert “at least”.

This amendment permits a private registered provider to whom a direction in the terms of clause 21(2)(c) is issued to make a greater reduction in rent than the reduction specified in the direction.

153, in clause 21, page 21, line 3, at end insert—

“(d) a direction that section 19 is to have effect in relation to a private registered provider specified in the direction as if section 19(1) required the private registered provider to secure that the amount of rent payable by tenants of their social housing increased by no more than the percentage specified in the direction.”—(Guy Opperman.)

This amendment provides for directions that exempt a private registered provider from the rent reduction requirements in clause 19 but limit what increase in rent the provider may impose.

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

I beg to move amendment 154, in clause 21, page 21, line 5, at end insert “, and

(b) the social housing in relation to which it is to have effect.”

This amendment enables a direction to affect only some social housing of a private registered provider.

Photo of Albert Owen Albert Owen Labour, Ynys Môn

With this it will be convenient to discuss Government amendments 155, 156, 161 and 162.

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

We have recently been talking about exceptions and exemptions and it might be helpful if I clarify the position. We will set out the criteria for exceptions in the regulations. When we talk about exemptions, the financial viability conditions are in the Bill. We can also set out other conditions for an exemption in the regulations. I hope that that is helpful in drawing a distinction.

The amendments seek to introduce flexibility into the exemption process in relation to clause 19. Amendments 154 and 161 allow a direction to be made in relation to only some of the social housing that a private registered provider or a local authority have, ensuring that exemption can be targeted. Amendment 155 enables the regulator of social housing, the Homes and Communities Agency, to publish guidance on steps that a private registered provider should take before seeking an exemption. Amendments 156 and 162 give the Secretary of State power to prescribe conditions other than serious financial difficulties in which an exemption may be granted to a local authority.

Amendment 154, 155 and 161 recognise that exemption is a tool of last resort and, if needed, should be used in as targeted a way as possible. Amendments 156 and 162 provide for greater flexibility in the exemption regime.

Photo of Debbie Abrahams Debbie Abrahams Shadow Minister (Work and Pensions)

I am grateful to the Minister for his clarification. We are talking about the financial viability of supported housing providers and, more broadly, housing associations. The Government are considering the problems that they face, so has there been any assessment of the housing providers whose viability could be threatened as a result of the measures? Will one be undertaken? I am grateful for the detail on the amendment, but it seems that implementation is already anticipated. Should there not be a step before that?

Photo of Shailesh Vara Shailesh Vara The Parliamentary Under-Secretary of State for Justice, The Parliamentary Under-Secretary of State for Work and Pensions

We are not anticipating difficulty. We are trying to recognise what might happen in future, so we are making it absolutely clear that, although we propose a 1% reduction, where financial viability is threatened, there are measures in place to deal with it.

We must recognise that the regulator is there to help, assist and advise. Its job is to assist, but as a default mechanism we have those provisions. However, as far as I am aware, we do not anticipate anyone having difficulty.  I reiterate that we are confident that housing associations and local authorities are robust organisations that can deal with the 1% reduction. It must be considered in the wider context. Individuals and other organisations throughout the country are having to put up with difficulties. We are asking for a 1% reduction. I repeat the comments made by David Orr, chief executive of the National Housing Federation. I will not repeat the whole quote, as I gave it earlier, but simply two lines. He said that

“in truth, there is no sector anywhere that is not still capable of making further efficiency savings. That is as true in our sector as it is anywhere else.––[Official Report, Welfare Reform and Work Public Bill Committee, 15 September 2015; c. 91, Q144.]

Amendment 154 agreed to.

Amendments made: 155, in clause 21, page 21, line 11, at end insert—

“( ) The regulator may publish a document about the measures that the regulator considers could be taken by a private registered provider to comply with section 19 and to avoid jeopardising its financial viability.”

This amendment enables the Regulator of Social Housing to publish documents relating to the condition in clause 21(4).

Amendment 156, in clause 21, page 21, line 13, after “(9)” insert “or (9A)”.

This amendment and amendment 162 provide that the Secretary of State may issue a direction if an alternative condition is met, that is, a condition that the circumstances of the local authority must satisfy requirements prescribed in regulations by the Secretary of State.

Amendment 157, in clause 21, page 21, line 18, after “for” insert ““at least”.

This amendment and amendment 158 permit a local authority to which a direction in the terms of clause 21(7)(b) is issued to make a reduction in rent, instead of keeping the rent the same.

Amendment 158, in clause 21, page 21, line 19, for “the same as” substitute “no more than”.

Amendment 159, in clause 21, page 21, line 21, after “required” insert “at least”.

This amendment permits a local authority to which a direction in the terms of clause 21(7)(c) is issued to make a greater reduction in rent than the reduction specified in the direction.

Amendment 160, in clause 21, page 21, line 22, at end insert—

“(d) a direction that section19 is to have effect in relation to a local authority specified in the direction as if section19(1) required the authority to secure that the amount of rent payable by tenants of their social housing increased by no more than the percentage specified in the direction.”

This amendment provides for directions that exempt a local authority from the rent reduction requirements in clause 19 but limit what increase in rent the authority may impose.

Amendment 161, in clause 21, page 21, line 24, at end insert—

“, and

(b) the social housing in relation to which it is to have effect.”

This amendment enables a direction to affect only some social housing of a local authority.

Amendment 162, in clause 21, page 21, line 27, at end insert—

“(9A) The condition in this subsection is that the circumstances of the local authority satisfy requirements prescribed in regulations made by the Secretary of State.”

Amendment 179, in clause 21, page 21, line 31, leave out subsection (11).—(Guy Opperman.)

This amendment is consequential on amendment NC22.

Question put, That the clause, as amended, stand part of the Bill.

The Committee divided: Ayes 7, Noes 5.

Division number 50 Decision Time — Clause 21 - Exemption of a registered provider of social housing

Aye: 7 MPs

No: 5 MPs

Ayes: A-Z by last name

Nos: A-Z by last name

Question accordingly agreed to.

Clause 21, as amended, ordered to stand part of the Bill.