Good afternoon. I am Kate Henderson, chief executive of the National Housing Federation. We represent housing associations in England, which are not-for-profit providers of more than 2.5 million homes to around 6 million people. Our members reinvest all their surpluses back into building more affordable homes and supporting residents.
By way of introduction, housing associations vary in size. They also vary in the profile of the buildings that they own and manage and in terms of the residents and communities they exist to serve. So, while many of our members provide general needs rented accommodation for people on lower incomes, they also provide specialist and supported housing, and with that come safety requirements. Across the board, the safety of residents is our No. 1 priority. We are really grateful to be able to give evidence to the Committee.
Order. I am going to ask our technical people here if we can increase your volume. It is a little bit difficult to hear you. [Interruption.] The technical feedback is to ask you to stand nearer to the microphone, Martin. Is that possible?
Fantastic. David, could you introduce yourself, please? [Interruption.] We have no sound from David at the moment. [Interruption.] Are your headphones connected to your audio device? That is as much technical information as I can give. [Interruption.] We have lost David at this point. If you can hear me, David, can you make sure that your headphones are selected on the device you are trying to broadcast from? Hopefully, you will rejoin us shortly.
There are a number of questions we want to ask this panel. With four people on the panel, I am keen to ensure that we get cracking, as we only have until 3.30 pm for this session and then I will have to bring it to an end. If it is all right with colleagues, we will crack on, even though we are currently missing one of our witnesses. Mike Amesbury will kick off the questions and others can follow.
Q I have the same question for all the witnesses. What is welcome in the Bill? What is bad, with unintended consequences, let us say around affordable housing and ambitions to build that? What is missing from the Bill? What should be in it?
We absolutely welcome the introduction of a fit-for-purpose regulatory system on building safety. This Bill is a really important starting point in ensuring that we have a safety system that protects residents.
One thing that the Bill does not attempt to address is the funding for remediation. Within the Bill, there are some financial protections for leaseholders in terms of extended liabilities. That is welcome, in that it assumes that developers are liable for poor workmanship, but it does not necessarily solve the problem for leaseholders. That is because leaseholders may still be facing building safety costs. They would have to pay for legal advice to go through this process, with no guarantee of outcome. We would suggest, as we have suggested throughout, that the Government provide the upfront cost for all remediation work, and that that is then recouped down the line from those responsible. We think that is missing from the Bill.
In terms of the new Building Safety Regulator and its role, as the Bill comes through we would like to see detail on transition. There is going to be a huge amount of change. While we welcome the regulation coming in, it needs to be risk based, as does funding. At the moment, it is very welcome to have the building safety fund, but it is based on tenure and on access for leaseholders in buildings over a certain height. It is not based on risk. We would like to see this based on risk and, similarly, as the regulation comes in, for that to be based on risk, and for us to have transition arrangements in place, prioritising the highest risk buildings.
My third point, before I stop and let others come in, is about access. There are provisions in the Bill for access to properties. We know from our members that they engage with their residents in many different ways around building safety checks, communication and access. The majority of the time, where a check needs to take place, access is provided by the residents through this dialogue. But there are circumstances in which access is difficult to attain, perhaps because the resident has multiple vulnerabilities, is concerned and does not want to allow access, perhaps because they are refusing or perhaps because the building is leasehold and the resident is not there.
We absolutely believe that residents should have the right to privacy, a quiet life and quiet enjoyment of their property, but we want to see good provisions for right to access, and at the moment the way the Bill is structured, in terms of going through the courts, gives us some concern. At best, it could take two months, but at worst we know from members at the moment that securing access can take up to a year. We absolutely want to be fully compliant as this comes in, but right to access is an area that we would like the Bill to pay some further attention to.
The LGA also welcomes the Bill. We feel that it will strengthen the building safety system in England, particularly in relation to new buildings, but we have some concerns about the lack of focus on some buildings, particularly those converted under permitted development rights. However, overall we think the Bill is a step in the right direction.
On the scope of the Bill, it seems to us that it focuses very much on buildings over 18 metres, and we would also like to see a risk-based approach to buildings. It is quite possible that a building under 18 metres can be much higher risk than one that is over 18 metres. Therefore, we would much rather see a risk-based approach, which also included care homes and hospitals that fit into that risk profile. We also believe that the Bill does not do enough to protect leaseholders and social landlords from the costs that have resulted from developer failings.
We believe that the requirements around accountable persons need to be much clearer and that the Bill should end competition in building control, because otherwise we will end up with a two-tier system when it comes to safety.
In respect of what is welcome, we very much welcome the appointment of the HSE; we very much look forward to the gateway points; and, importantly, we welcome the way in which ownership has been introduced into the Bill. People will actually own responsibility for compliance, which we think will significantly change culture within the industry.
We feel that the unintended consequences of the Bill are that it will intensify competition in building control for buildings that sit outside the scope of the new regime. So, although there will be no competition for in-scope buildings, that will then intensify the competition for out-of-scope buildings.
We feel that what is missing in the Bill is that there should no longer be a position or a place for a duty-holder to be able to choose who regulates them. We think that the extension of duty-holder choice should extend across to all buildings and that people should no longer have the option to choose who regulates them through the building control process.
Of course. Naturally, I agree with all the points that Kate made. However, specifically to answer the question about what is missing from the Bill, there is a lot of detail missing; we know that that detail will come later in secondary legislation. And there has been a huge amount of work to prepare for the recommendations that Dame Judith Hackitt made, in the last three years, since she made them.
However, to continue progressing with the preparations, just those final bits of clarity would really give people the confidence they need to see that they are going in the right direction. We represent not-for-profit housing associations that are regulated on value-for-money standards; they need to be absolutely certain that what they are doing is the right thing. There is so far you can go, and we will keep going in that direction, but to get it over the line we need that detail as well.
Q This is a question for Martin Taylor; apologies if you have effectively covered this issue, Martin, but if you did, you did so very briefly. I asked a head of building control what his perspective was in terms of the way the system had gone in the last few years. He went back to the privatisation and choice-based system of building control, whereby building inspectors, including local authority building inspectors, had to compete on cost. Cost comes down if you have fewer visits on site, and he said that that was one of a number of causes of the failure that we have had in construction and buildings in recent years. Do you recognise that as an issue? Do you feel that the Bill addresses the competition to have less time on site for adequate inspection?
It is an excellent question. Yes, we have long maintained that there should not be competition in building control. In case members of the Committee are not aware, anyone who procures building work can choose who regulates them through the building control process. It could be a local authority building control team or a private sector approved inspector. As far as we are aware, that is the only regulatory function where you can actually choose who regulates you. It is a bit like marking your own homework at school. That means local authorities have to compete against the approved inspectors in respect of their big project. Those approved inspectors submit quotations of how much they think it will cost them to deliver that building control service. It goes without saying that anyone procuring building work will look to go with the lowest cost provider of that building control service.
Local authorities do not enjoy the facility of being able to offer a quotation. Their charge can only be based on what it costs them to deliver those services. Local authorities have to compete with the private sector, but they do not have a level playing field. We fundamentally disagree with that, but you could say we are bound to, because we represent local authorities rather than approved inspectors.
On the second part of your question about whether the Bill addresses this issue, it will very much address it, but only in respect of high-risk buildings. Local authorities will support the regulator in the delivery of building control services in respect of high-risk buildings. That will then intensify the competition for buildings that fall out of scope. The first intention of the Bill is that approved inspectors will not be able to support the regulator unless local authorities do not have the capacity, but that will intensify the competition for these lower-rise, smaller buildings and further intensify the problem. It will address it in respect of high-risk buildings, but not all risky buildings are over 18 meters—look at low-rise care homes and hospitals. I think I have answered your question. It will help, but only in respect of high-risk buildings.
Witnesses should not feel compelled to speak to every question. That was a relatively specific one. Unless anyone has anything else to add, I will move on to Daisy’s questions.
Q I have two quick questions. The first is about how you think remediation should be funded. Some of us believe that leaseholders should not have to pay for fire safety defects that are not of their making. I note that the National Housing Federation’s evidence stated that the Government should fund it up front and then recoup some of the costs. A second proposal suggests that where those responsible are still a going concern, they should pay for it, and only where companies are not a going concern should the Government pay for it. Would you support that model, or do you still think that it should be the first model, whereby the Government fund everything?
Turning to my second question, we have heard a lot from industry players today who talk about long-term change. I have noticed that although we recognise that long-term change is needed, that is very different from the sense of crisis and urgency that we hear from our constituents who are affected. I want to hear from any of you where you feel this is on that spectrum of emergency, urgency and long-term change.
We welcome the considerable funding in the building safety fund. That is a huge commitment from the Government, and recognition of the scale of this challenge. The cost of remediation will far exceed the £5 billion that has been put forward, but it is a welcome contribution. However, that money is available based not on the highest risk but on tenure. It is absolutely right that there be support for leaseholders—we do not think leaseholders should have to pay—but we also do not think social tenants should have to pay. There will be consequences to the fact that this funding is not available to social tenants and social landlords.
Our response to your first question is that we believe that the Government should provide the up-front costs for remediation based on a risk-based approach, with the highest-risk buildings remediated first, and then recoup them. No matter who has done the work, it is about how we expedite this based on risk. That is about prioritising safety and minimising the impact on leaseholders and social residents. The consequence of not having funding for social residents and landlords—this is non-negotiable; the work has to take place—is that money is diverted away from building much-needed affordable homes and investment in existing homes and communities.
This is absolutely a crisis. It is not a crisis of our making; it is a crisis that has been made over the last 30 years. It is a failure of regulation and of construction, development and workmanship. We are going at the fastest pace we possibly can to put it right, but there are huge uncertainties and complexities. One thing I have found incredibly useful is going out on site and seeing buildings that are going through this process with residents living there, and the time it takes to get that through. We absolutely think that this is a crisis, and that work needs to take place as quickly as possible, but the complexities of access to funding and establishing liabilities means that work is not taking place as quickly as it could. The building safety fund is hugely welcome. A number of our members have bids in with the building safety fund, and some have been successful—
Order. The Bill does not include the building safety fund, so could we perhaps not focus on that too much? I am trying to draw the parameters tightly. Is that all right?
That is absolutely fine. My broader point is that we are waiting for some Government timelines. Yes, there is a crisis, but the speed at which we can work is also dependent on access to some of that funding.
The Local Government Association has similar views. We are extremely concerned about the impact that this could have on leaseholders, so we very much take the view that the Government should pay the up-front remediation costs and seek to claim back as much as possible from those directly responsible. The failure to protect leaseholders will leave councils to pick up the pieces if householders subsequently become homeless, and then the responsibility falls on to local councils to fund rehoming them.
We also take the view that any remediation that applies to social housing providers should also apply to local authority tenants; otherwise, money may be diverted away from repairs and maintenance and towards other costs, and that would just store up a problem for the future.
The funding is obviously a really important point. The Government funding means that all the barriers to remediation can be overcome from a financial perspective. In support of that, you also need Government to co-ordinate the limited resources to carry out remediation works and prioritise the buildings that present the greatest risk. That is the best way to address risk across the board overall. We are not seeing that happening, and that is very much part of the same argument.
Q I want to touch on disabled people. You mentioned some of the tenures of the housing. BSI recently had to withdraw PAS 79-2 on personal emergency evacuation plans, because it did not cover disabled residents. We know that many disabled people perished in Grenfell. Will this Bill ensure that disabled people will be safe?
As far as I am aware, there is not anything in this Bill specifically about people with disabilities. The Fire Safety Act 2021, in making changes to the Regulatory Reform (Fire Safety) Order 2005, is the place where that would be appropriate from a legislative perspective. You probably know that the Government have recently consulted on a requirement for a personal emergency evacuation plan for anybody who might need one. Without a doubt it is key that people who have disabilities or mobility issues feel safe in their property.
We made the point in the consultation that we want a discussion about the questions that would arise if that were made a requirement. There might be questions specifically about a person’s plan. For example, I think the Government talked about times when it could be appropriate for somebody to gain support from friends or family, and that might be right, but not in all cases. Those are the questions we need to find an answer to, but the premise of ensuring that people with disabilities or mobility issues are safe in their homes is absolutely non-negotiable.
My question is a reflection on something Councillor RenardQ said about the implications for leaseholders who may be hit with a significant lessee charge or safety charge, but have only a small amount of time to pay it and then cannot pay. They will be evicted, or bankrupt and evicted; fall on their councils, who are already stretched; and end up homeless. Is there sufficient means of redress for leaseholders and residents, so that they can challenge elements of that charge, and is the provision requiring payment within 28 days reasonable? I would like some thoughts on that.
We welcome the emphasis from Government on ensuring the costs associated with building safety through the building safety charge are proportionate and kept as low as possible for residents. We are very committed to that. At this stage, it is quite hard to know what those costs are going to be without knowing the specific competencies of the building safety manager, the skills base and what that will cost.
On your question about protections for leaseholders, I must first say that as housing associations, we want to see all our residents sustain their homes, so we will do everything we can to support them with remediation costs—in pursuing funding from Government, pursuing developers or pursuing warranties. We will absolutely do that. On the building safety charge, the Bill suggests that it is separate from a service charge, and that you pay it within 28 days. Having looked at that, we think it places more vulnerabilities on leaseholders. With a service charge, there is case law, so you can hold your landlord to account, and that is an important point to address. If the building safety charge was transparently and openly included within the service charge, the leaseholder would have a right to redress through case law under service charges.
The other point here is that, if the building safety charge is within the service charge, it can be paid not within 28 days, but on a monthly basis. It would be estimated for the year ahead and then divided up by 12 months, as with service charges. You would then get to the point in the year when you compared budget with actuals and readjusted, and if that cost were to go up and your leaseholders were unable to pay it, you would work out an affordable repayment plan. Our recommendation is that there should not be 28 days. The charge should be included as a provision within the service charge, but in an open, accountable and transparent way, so that the leaseholder has not only a right to redress, but a more manageable payment plan.
Q My question rolls on from the last. The building safety charge is merely for leaseholders; I do not even know whether it depends on whether you are a leaseholder of a private developer, a housing association or even a local authority, and we are just talking about permanent residential housing. There are already many differences, and we already have the current difference in the building safety fund, which only applies for leasehold homes. Even housing associations cannot claim on it for their social rents, so they have to use funding for refurbishment or new build social rent housing to address those deficits. Do the panel members, particularly from the federation and the LGA, feel that if there was an indemnity scheme on freeholders, developers and builders, it would be more transparent and easier to claim, irrespective of who the user is or who the main building manager is, in terms of which sector?
I want to touch on accountable persons. As we discussed earlier with clause 84, accountable persons have to “take all reasonable steps” to ensure safety. I know this Q might sound like I am asking you to pick your shopping list, but what do “reasonable steps” look like? We have these debates all the time, and I know this is coming out in secondary legislation later. To dovetail into that, on the duty to co-operate, we know there are some quite complex ownership structures. In my patch, we have a situation whereby you will often have a tenant management co-operative, which is an arm’s length body of the council but is a separate organisation in its own right. In that scenario, how do you ensure there is not responsibility shunting? It seems that there is a risk there. In that scenario, how do we ultimately ensure that we have the accountability that the Bill, and the subsequent legislation, is trying to achieve?
I will address a couple of those. We believe the Bill has some shortcomings when it comes to the issue of accountable persons, and we feel that the Government need to be very clear about where that accountability sits. If there is an arm’s length management organisation, it needs to be clear in the guidance, so we need to have some regulatory guidance. We also think that the regulator needs to give accountable persons adequate time to implement the new system and provide the appropriate guidance. Of course, there is the need to ensure that there are enough accountable people with the right qualifications across the country, so thought needs to be given to whether there are enough skills and how long it will take to get them in place.
I think the key here will be the detail in the guidance that needs to come out for accountable persons. It is critical that people take accountability of the risk, which is what the Bill attempts to set out. One final thing I would add is that the risk in not just limited to fire, so it will be key that the guidance comes out. I know the guidance is being planned from the work that we are doing on the Joint Regulators Group.
Sure. The duty to co-operate is very welcome, but there is still the potential for some issues to arise. The example that we have just heard is not uncommon. We can have buildings that are owned by freeholders that are shell companies, and sometimes those companies then demise the internal parts of the building to a long-term leaseholder. They can also discharge their management duties to a managing agent. Sometimes the long-term leaseholder and the managing agent might be the same entity, but they might not be. In that scenario, we understand that the principal accountable person would still be the freeholder, even though they have appointed a managing agent and have a long leaseholder. Our members have told us that it can be really difficult to engage with the freeholder in this sort of set-up, especially when they need to do things such as assess external wall materials or identify what needs to be remediated. We would want some reassurance that the duty to co-operate has been really thought through for the most challenging of these buildings, in terms of absent freeholders.
A particular challenge is where the freeholder is overseas, potentially in the Isle of Man or Gibraltar. The entity might be outside UK jurisdiction, so I think we would like—we are seeking legal advice at the moment, which of course we will share with the Committee when we have it—an assurance from Government that we are working through the detail of this rather complicated situation. That is not just about us as social landlords; it is about the access that the new Building Safety Regulator can have to that freeholder, and it is about communication for residents. There is some really welcome content in the Bill on good communication with residents—we absolutely support that—but in that type of arrangement, how do we get the right information? If a housing association has a few properties in a wider block with an absent overseas freeholder, it is about making sure that we can reassure those residents and get them the information they require. It is those interrelationships that we still need to work through, and I am not sure that the duty to co-operate at this stage solves that, although we would like it to.
Q The Minister knows that the Government have introduced legislation to do with putting broadband into buildings where freeholders do not respond. The Government have introduced a presumptive duty, where you can put broadband into a building if the absent freeholder has ignored repeated requests. Might that principle enable that kind of work? Rather than having “take reasonable steps”, if you had a presumptive duty whereby you could have access if an absent freeholder ignored repeated requests, would that help?
That sounds like an interesting concept. We would want to have further discussion of it. It is an interesting comparison. Some of our members have raised the fact that the presumption of access for broadband could minimise the compartmentation that is there to contain a fire to a flat of origin, but the presumption for access in this scenario could be quite a helpful thing.
Q Dan Hewitt from ITN has been involved in a campaign—an exposé, really—on some of the standards across the sector. By your own admittance, they are not acceptable. Will this new building safety regime actually start to alter that landscape with the regulatory framework?
Thank you for highlighting the campaign, which is specifically around damp, mould and disrepair in homes. There have been some really unacceptable examples, which are being put right. It is absolutely incumbent on anyone, whether they are a social landlord or a private landlord, to ensure that residents have safe and secure homes.
On that and specifically on damp and mould—I know that is not what this Bill is about—context is important in terms of there being a consistent improvement in the quality of homes. Around 5% of housing association properties have some kind of damp or mould. It is higher in the private rented sector, but is still not good enough and we are working on it. Two per cent. is structural—that is a separate conversation about regeneration—and 3% is about things like condensation. Again, it is never the resident’s fault, but there is more we can do to support that.
In addition to the question of the physical buildings, that investigation perhaps raises the issue of how residents are treated and rights to redress, transparency and accountability. There is some welcome provision here about communication, with resident engagement as part of the Building Safety Bill, but the consumer regulation that will come through the Social Housing White Paper is the really important place for ensuring that we get the right regulatory framework. It is interlinked with this regulatory framework, but it will also come through the regulator of social housing with new consumer regulation. On that front, there is an absolute commitment from us about being open, accountable and transparent, and wanting to have a really strong and positive relationship with residents in the social housing sector.
Q Is there anything else to add on that issue? We have a couple of minutes at the end for anybody to raise any issues that you do not feel that we have covered so far. I can see that David has his hand up.
I have a quick comment on the last point. When it comes to building safety and other issues, local councils with responsibility for housing, housing stock and tenants have been very quick to respond to the needs of those tenants, as a general rule. Obviously, there may be some examples of where that has not been the case, but by and large local authorities have been very positive and proactive in responding to the building safety issues. I wanted to put that on the record.
Just one thing. We stand ready, as an organisation, to build the competency in building control. I know that there has been much discussion around competency across the wider industry. As an organisation we have established a competency foundation to build the competency of building control surveyors. We stand ready with a suite of qualifications and accredited learning, all ready to roll out to the industry. We just need to establish the burdens funding that we have applied for. Then we can assure you that we can deliver that competence across local authority building control.
Just a final point. Housing associations are absolutely committed to the safety of their residents. We think that it is really important that we move over to this new system as quickly as we can, but also diligently. Doing that on a risk basis is key, and we are really happy to work with the Government and the HSE to define what that looks like.
I echo what Victoria just said. We really welcome the legislation coming forward. It is really important that this legislation dovetails with the legislation in the Fire Safety Act. We have concerns about the capacity to implement, and we want to work on that transition with Government and the Building Safety Regulator, and to work with Government to ensure that this is about not just funding, but about co-ordination and ensuring that we prioritise highest-risk buildings first. I reassure the Committee that the safety of residents is our absolute top priority.