Baroness Scott of Bybrook:

Moved by Baroness Scott of Bybrook

10: After Clause 3, insert the following new Clause—“Power to charge fees(1) Section 117 of the Housing and Regeneration Act 2008 (fees) is amended as follows. (2) In subsection (1)(a), after “fee” insert “for dealing with an application”.(3) After subsection (1) insert—“(1A) The regulator may make dealing with an application for initial registration conditional upon the payment of the fee.”(4) In subsection (2) omit “initial or”.(5) After subsection (4) insert—“(4A) The amount of a fee payable under this section may be calculated by reference to costs incurred, or likely to be incurred, by the regulator in the performance of any of its functions, including costs unconnected with the fee-payer and costs unconnected with registration or regulation under this Part.”(6) In subsection (5)—(a) in paragraph (a), for “expenditure on” substitute “the costs incurred in”;(b) omit paragraph (b) (but not the “and” following it);(c) in paragraph (c), for “to which it relates” substitute “incurred, or likely to be incurred, in the performance of the regulator’s functions”.”Member's explanatory statementThis makes it clear that the regulator may charge fees for dealing with applications for registration (even if unsuccessful) and may require payment in advance. It also makes clear that fees may be set at a level to cover all of the costs of the regulator, including, for example, costs unrelated to the registration process.

Amendment 10 agreed.

Debate on whether Clause 4 should stand part of the Bill.

My Lords, I cannot help thinking that the government amendments seem to have had an easier time than the amendments from the rest of the Committee.

I want to oppose the proposition that Clause 4 should stand part of the Bill. This is a probing suggestion, following up a point I made at Second Reading about the potential overlap between the role of the Housing Ombudsman on the one hand and that of the Regulator of Social Housing on the other. I am all in favour of empowering social tenants and enabling them to drive up the quality of the housing in which they live and the quality of the management of the social housing stock. However, there is a risk of confusion as the roles of the ombudsman and the regulator begin to merge.

In response to my concerns, when winding up the Second Reading debate, the Minister said:

“I point out that there is a long track record of close working between the regulator and the ombudsman, and we are ensuring effective information sharing between them. The proposals in the Bill will reinforce and strengthen the co-operation that already exists. We are also delivering a communications campaign to tenants so that they know where to go and are well informed”.—[Official Report, 27/6/22; col. 469.]

The department then sent me a document, headed Regulator of Social Housing and Housing Ombudsman’s Roles and Responsibilities. It is some six pages long, indicating that there is clearly a need for a detailed explanation. This document complements a five-page memorandum of understanding, published two years ago.

There are two sentences in the recent document which set out what I thought the respective roles were. One says:

“The regulator does not intervene in individual complaints or mediate in disputes between tenants and landlords.”

This statement simply is not true. The Regulator of Social Housing can intervene in individual complaints. The social housing White Paper expects the Regulator of Social Housing to

“undertake specific, reactive investigations and/or inspections where appropriate. This could be when a serious potential compliance breach has been brought to its attention by tenants”.

The briefing notes that accompanied the Queen’s Speech reinforced this by referring to the powers of the regulator to arrange emergency repairs to a tenant’s home following a survey. By definition, the regulator can do this only if he has intervened in an individual complaint. The regulator also has the means to rectify these complaints himself, as is contained in Clause 24. It is clear from that that the regulator can move from the systemic down to the detailed.

The other sentence is about the ombudsman. The document says that his role is to resolve disputes between tenant and landlord. It would be fine if it stopped at that but, again, his role is far wider and begins to encroach on the role of the regulator. He can move up from the detailed to the systemic. The social housing White Paper says that his remit includes the powers to investigate potentially systemic issues arising through complaints. He has issued a code, setting out good practice for landlords; he can initiate investigations of his own if an individual case is indicative of wider failure, again trespassing on the role of the regulator; he can use insight and data to identify trends in complaint type; he can carry out thematic investigations into issues affecting the sector, producing regular spotlight reports; he can share expertise, insight, experience and learning to influence the sector to drive a positive complaint-handling structure, again overlapping with the role of the regulator. The objectives I have just mentioned are emphasised in the corporate plan for 2022 to 2025 and in Clause 31 of the Bill. It seems that there is a clear risk of confusion, duplication and overlap between these two bodies.

The Explanatory Notes to the Bill refer diplomatically to the overlap to which I have just referred:

“The regulator and the housing ombudsman both have a role in overseeing the performance of social housing landlords”.

Exactly. I note that the memorandum is to be revised—in the words of the document to which I referred earlier—

“to provide clarity following the passage of the Bill.”

I hope we can find some clearer demarcation of the roles which avoids mission creep by both, but also ensures that there is not a gap between the two. One could argue, as the memorandum effectively does, that these two individuals are grown-ups, can work amicably together and can sort out who does what—and I am sure they do. However, I still do not think it right to leave potential overlap and duplication to the good will of two individuals.

My second concern is for the tenants who now have two bodies they can turn to if their complaint to the social landlord is not resolved: the Housing Ombudsman and now the Regulator of Social Housing. The ombudsman can make awards and recommendations, but he cannot, for instance, enter premises to remedy specific failures. If I were a tenant—and particularly if there were a backlog of complaints to the Housing Ombudsman—I would probably head for the Regulator of Social Housing since he has more powers. Is he geared up to cope with this?

In its briefing for this debate, Shelter says it is vital that the regulatory roles of the ombudsman and the Regulator of Social Housing are clearly defined, that tenants and tenant groups understand how to complain and that any complaints process or system is easy to use, accessible and effective. That leads me back to what my noble friend Lord Greenhalgh said at Second Reading:

“We are also delivering a communications campaign to tenants so that they know where to go and are well informed”.—[Official Report, 27/6/22; col. 469.]

This is crucial. Can my noble friend the Minister say a little more about this, as the briefing from Shelter indicates that a tenant with a complaint about his or her social landlord may not know who to go to?

As I said, my opposition to the clause is probing, and I hope that my noble friend can assure me that these concerns will be taken on board.

I have also added my name to Amendment 29, which will be spoken to by the noble Lord, Lord Best, and which deals with the frequency of inspections. The social housing White Paper says that large providers should be inspected every four years, but there is no commitment to this in the Bill. I just want to make one point about this.

When I discussed the amendment with Shelter, before I added my name, I asked it to contact the National Housing Federation, as this obviously affects its members and, as we have heard, has financial implications for them. Shelter replied:

“We were able to meet with the NHF to discuss the amendments last week. They do not have a formal position on the amendments themselves. This is largely because they are a large membership body, and it would require posing the question to all their members.”

However, it did say that it had no real concerns about the amendments and is generally supportive of them, and agrees that more scrutiny and monitoring standards are needed. Its main priority is ensuring that its members are informed of what is in the Bill, to ensure that they are best prepared to implement the changes when they happen.

Its only potential issue was the inspections amendment applying to smaller social landlords. But with the amendment being a regulation-making power and not prescriptive, Shelter continued,

“we feel that it allows the Government/regulator flexibility to have different requirements on inspections for social landlords of different sizes.”

Basically, the National Housing Federation is broadly supportive of this amendment.

Against that background—and with, I am sure, the compelling oratory of the noble Lord, Lord Best—I hope that the Government will respond positively to Amendment 29. In the meantime, I beg to move that Clause 4 be not added to the Bill.

My Lords, I agree in part with what the noble Lord, Lord Young, says, but we need some degree of clarification. Therefore, I hope that the Government will be able to produce more complex and clear regulations as to the relationship between the two organisations.

It is slightly incongruous that my Amendment 11 is also in this group. It is a simple amendment, and I shall be brief for obvious reasons. It would add, in the designation in Clause 9 of the role of the designated health and safety officer, that mental health and well-being should be taken into account in terms of their duties. It is clear from many of our personal experiences and from the media coverage which the noble Baroness, Lady Sanderson of Welton, recently referred to, that failures to deal with problems in social housing both cause and aggravate mental health problems and cause anguish and distress among tenants and their families. For that reason, we need to write it in the Bill because, in terms of prioritisation on issues with which the designated health and safety officer will be faced, it is important that he or she takes into account the mental anguish and the consequential mental health problems of tenants who are, regrettably and deplorably, in these circumstances.

My Lords, I will speak to Amendment 29, in my name and the names of the noble Baronesses, Lady Hayman and Lady Thornhill, and of the noble Lord, Lord Young of Cookham, who has already spoken; I am grateful for his comments. The amendment obliges the Regulator of Social Housing to carry out regular, routine inspections of the registered providers of social housing.

The principal justification for regulation at present—with extensive regulation of governance and financial affairs—has been to protect the taxpayer, who has paid for a significant, although much diminished, proportion of the spending by these bodies. But, as the Bill recognises, the very valid justification for effective regulation today is to protect the consumer—the tenant, the resident. This aspect of regulation has been seriously neglected.

Even though most housing associations are charities, and all except the strange new breed of so-called for-profit registered providers exist for the public good rather than their shareholders’ returns, the interests of the consumer still require all these organisations to be subject to the watchful eye of an external, independent agency. Sadly, no organisation is immune to making mistakes or becoming complacent, insensitive, deaf to the voice of their consumers, customers, citizens. This can be an increased hazard for the housing associations that have grown dramatically over recent years, to which the noble Lord, Lord Whitty, made reference; several now own and manage over 100,000 homes, accommodating a population equivalent to that of a major city. This brings accusations of registered providers being out of touch with their residents, lacking local knowledge, and becoming remote and uncaring. Reporting by ITV and others, which has been alluded to already, has uncovered very poor performance in some of the largest housing associations.

Meanwhile, being a relatively small organisation, and supposedly with shorter lines of communication between provider and consumer, is not a guarantee of good practice. After all, in the most serious case of the Grenfell tragedy, the organisation—a tenant management organisation within the council—was relatively small and entirely locally based, but it failed its residents disastrously. An ombudsman service can play a vital role—as the Housing Ombudsman does—in responding to tenants’ complaints. However, this is no substitute for a regulator with the remit and powers to enforce proper standards and good practice in every social housing organisation.

So, given that effective regulation—particularly consumer- orientated regulation—is necessary and valuable, how can we ensure that the new regime introduced by the Bill actually succeeds in delivering decent standards, good management and maintenance services, and sensitive engagement with tenants and leaseholders? Amendment 29 seeks to address this.

Amendment 29 is intended to make sure that the regulator conducts regular, routine inspections to check that its consumer standards are being met. The amendment is earnestly sought by the Grenfell United campaigners, working alongside Shelter, to make a reality of the Bill’s intentions; indeed, this change to the Bill is the primary request of those who have been so appallingly affected by the previous inadequate regime. I met today with Edward Daffarn, the well-known Grenfell campaigner, and Tessa Barkham from the Grenfell Foundation. They made it clear that, after five long years of patient, painstaking, persistent campaigning, they are desperately hoping that the positive legacy of Grenfell will be a really robust system of effective regulation.

In this House we are well used to passing legislation to effect much-needed change, only to discover that the change we intended does not materialise. The problem is with the delivery. Our amendment aims to make sure that this fate does not befall the Bill. The amendment would hold the Government to their own commitment in last year’s social housing White Paper to introduce routine inspections for all but the smallest social landlords. At that time, the Government suggested inspections “every four years” for providers with “1,000 or more homes”. This amendment leaves it to the Secretary of State to determine the frequency of inspections for different organisations, for example of different sizes and proportionality, and to stipulate some minimum expectations for these. This allows for flexibility in responding to a changing environment. But the point is that the regulator would be obliged and made accountable to exercise the discipline of undertaking a regular inspection of each registered provider.

The Department for Levelling Up, Housing and Communities explains that the Government intend there to be—to quote its June press statement—“Ofsted-style inspections”. This amendment puts that intention into the Bill. It revives arrangements I well remember experiencing when the regulator was the Housing Corporation and my housing association was paid periodic “monitoring visits”, which certainly kept us on our toes.

This amendment gets to the heart of how real change in the current regulatory system can be effected. Without this clear obligation on the regulator to carry out regular, routine inspections to ensure that consumer standards are met, the Bill may simply join the many Acts of Parliament that have the best of intentions but never actually make a difference. With this amendment, the Bill would achieve the outcome which the Grenfell campaigners are rightly seeking. It would take on board the Government’s own commitment to this approach and would greatly increase the chances of the Bill achieving its central purpose of providing real consumer protection.

My Lords, I will first of all speak to Amendment 29 in the name of the noble Lord, Lord Best. My noble friend Lady Thornhill was going to speak but unfortunately has had to leave; she is not feeling too well.

I will just say that it has been eloquently expressed why it is very important that this amendment is included in the substance of the Bill. It gets our wholehearted support and there is no need for me to say any more.

I will also speak to Clause 4 stand part. I added my name to that of the noble Lord, Lord Young of Cookham, after he raised the selfsame issue at Second Reading. It seemed that this was an area of confusion that we need to clarify before the Bill is passed.

The noble Lord, Lord Young of Cookham, explained that the extension of the powers of the regulator will almost certainly lead to confusion about the power of the Housing Ombudsman. They both have responsibility for seeing that social housing landlords treat their tenants fairly, and the regulator has considerable new powers to ensure safe and secure housing, including the power to obtain a warrant to enter a property if a landlord fails to comply, as set out in Clause 24. The regulator has been given huge powers of enforcement. What can the ombudsman do? Similarly in housing as elsewhere, the tenant turns to the ombudsman if there is an unresolved issue, but it does not have those extensive powers, as the noble Lord explained in some detail. It cannot make any practical intervention. All the ombudsman can do is write a report, make recommendations and possibly award compensation, if that is appropriate—that is it.

It is not clear to me, and I do not think it is clear in the Bill, at what stage the tenant should appeal to the ombudsman. Is it as a last resort, where the regulator’s efforts have not provided a full solution—in which case, how will a complaint to the ombudsman help to resolve it? Is it envisaged that the ombudsman is the final arbiter where the regulator has not succeeded? If not, then whom? The section on appeals in the Bill is totally focused on an appeals system for registered providers; there is nothing in it about appeals for tenants. If the ombudsman is the final arbiter for tenants then more needs to be done to clarify the roles, responsibilities and powers of the ombudsman.

I am totally with the noble Lord, Lord Young of Cookham, in what he has said. There is confusion. I am looking at it from the side of the tenant. If there is an unresolved complaint—be it about rent, repairs or whatever the issue—where does the tenant go? They go first to their landlord and, if it is not resolved, they go to the regulator, because it will be a practical issue. The regulator has huge powers, so it ought to be resolvable, but if not, do they go to the ombudsman? What can the ombudsman do? From the tenants’ point of view, this is not as clearly worded as it should be.

I hope the Minister will be able to say that she will go back to the department to sort out how each of these roles will work so that there is no confusion from the tenants’ point of view, which is where I am looking at it from. I support the objection to Clause 4 standing part and look forward to what the Minister will say.

My Lords, my Amendment 33 is in this group. It would mean that the Secretary of State must bring forward an affirmative SI to make provisions for monitoring the compliance of social housing with the Homes (Fitness for Human Habitation) Act. I think we can all agree that there is not a lot of point in having a standard if it is not complied with. I hope that, by recognising that, the Minister will consider accepting my very simple amendment.

I have also added my name to Amendment 29, so ably introduced by the noble Lord, Lord Best. As he said, it would impose a duty on the social housing regulator to carry out regular inspections of all registered providers to ensure compliance with the regulatory standards. This is incredibly important, which is why I was very pleased to add my name to his amendment. He introduced it in such a way that we are all very clear why it is needed and would be an important improvement to the Bill, if accepted.

As it currently stands, reactive investigations are an important aspect of the system, but, unfortunately, they often come too late and sometimes they are too heavily reliant on other parts of the system revealing issues. We know that self-reporting by landlords can mask the scale or severity of problems and that action is sometimes not taken until it is too late. We need properly designed routine inspections that can be done at short notice so that we can uncover issues in a more timely manner and, most importantly, act as a deterrent to poor service and ensure that good practice is an everyday responsibility for landlords and their staff.

As we have heard from the noble Lord, Lord Best, when the Government introduced the social housing White Paper, they promised routine, Ofsted-style inspections. In this way, we would deliver a truly proactive system of regulation of social housing. As the noble Lord said, if we are genuinely to deliver what the Government seem to want with the Bill, we must ensure that good standards, right across the board, are delivered within the system. Having such inspections would help to achieve that, which is why we fully support his amendment.

I move to Amendment 11, in the name of my noble friend Lord Whitty, which we also strongly support. His amendment to recognise the impact of unsafe or overcrowded conditions on mental health and well-being is incredibly important. A lot is talked about the impact of poor housing standards on physical health; not enough is talked about their impact on mental health, so we strongly support his amendment.

Finally, I come to the opposition to Clause 4 standing part from the noble Lord, Lord Young, who, as always, introduced it very clearly and effectively. He was absolutely right when he said in his introduction that we need clarification of the roles of and relationship between the regulator and the Housing Ombudsman. He talked about the overlapping of their responsibilities and the importance of avoiding confusion and duplication. If this is to be truly effective, everyone must know their role and each role must be effectively delivered. I shall be interested to hear the Minister’s response and to see whether the Bill could be amended by the Government to try to bring clarification so that we do not get confusion once this becomes law.

I finish by saying that we have had a number of excellent discussions today on the Bill and I look forward to working with the Minister to positively move forward the issues we have raised today.

My Lords, I thank my noble friend Lord Young, the noble Baroness, Lady Hayman, and the noble Lords, Lord Whitty and Lord Best, for tabling these amendments, which all relate to changes to the proposed proactive consumer regulation regime. I shall start with the opposition to Clause 4 standing part, raised by my noble friend Lord Young of Cookham. The noble Baroness, Lady Pinnock, and my noble friend Lord Young asked questions on the blurred lines and lack of understanding as to who does what. I shall try to explain.

The noble Baroness, Lady Pinnock, asked who a tenant goes to if they have a complaint. They should go first to their landlord. In the event that the complaint cannot be resolved between the tenant and the landlord, the matter can be escalated to the Housing Ombudsman, who can investigate individual complaints from tenants. Under the principle of co-regulation, it is the responsibility of landlords to deal with, and be accountable for, complaints about their service. The regulator’s Tenant Involvement and Empowerment Standard requires that they have clear and effective mechanisms for responding to tenants’ complaints. If the complaint cannot be resolved between tenant and landlord then, as I said, the matter can be escalated to the Housing Ombudsman, but if there is evidence of systemic failure by the landlord to comply with the Tenant Involvement and Empowerment Standard, the Housing Ombudsman can refer the matter to the regulator. I will say a bit more about this in a minute, because there is confusion, and more clarity is required to take this forward.

Effective information sharing between the Housing Ombudsman and the Regulator of Social Housing is crucial to holding landlords to account and ensuring that complaints are dealt with fairly and effectively. To deliver this, we are seeking to legislate to strengthen the relationship between the Housing Ombudsman and the regulator. A key element of this is to put a requirement for a memorandum of understanding between the two bodies into statute. The current memorandum requires close co-operation and the sharing of relevant information and data, including evidence of potential systemic issues. This will be updated to reflect the new regulatory system of proactive consumer regulation. There is a strong track record of collaboration, and a strengthened memorandum of understanding, backed by statute, will enhance this relationship.

There is still much more to do to ensure that residents know where to seek support. We understand that. We delivered campaigns in 2021 and 2022 to ensure that residents understood how to make a complaint and how to seek redress. These campaigns reached 2.2 million and 5.7 million people respectively, and successfully raised awareness of, and confidence in, the complaints process. I assure noble Lords that the Government will build on this work and the foundations of this clause to ensure that these organisations work cohesively and are accessible to tenants.

However, I have also listened to the issues that noble Lords have raised. There is an issue about clarity of responsibilities, and a further issue to push forward far more communications with tenants, in order for them to understand the processes that we are putting in place. They are stronger processes and they are good processes, but tenants need to understand how to access them. I will take these things back to the department.

Amendment 11, tabled by the noble Lord, Lord Whitty, seeks to make provisions specifying that mental health and well-being falls within the remit of the health and safety lead role. This legislation will require registered providers to designate a lead to monitor the provider’s compliance with health and safety requirements in relation to their role as landlords providing accommodation to tenants. The lead will also be required to advise the responsible body on how the provider should address any potential risks and failures.

Mental health is already part of the lead’s remit where the landlord is responsible for meeting a statutory health and safety requirement relating to it. Those requirements include, for example, meeting the decent homes standard. This requires that a property must be free from serious category 1 hazards, as classified by the Housing Health and Safety Rating System (England) Regulations 2005. One hazard group is psychological hazards, which includes hazards relating to space and crowding, security, light and noise. The role of the health and safety lead will be visible and accessible to tenants, so that they know who is responsible for health and safety and have the assurance that it is taken seriously.

Amendment 29, in the name of the noble Lord, Lord Best, relates to inspections. The regulator is accountable to Ministers and Parliament for delivering effective regulation under its statutory objectives. The regulator has committed to delivering regular consumer inspections as part of the proactive regime to monitor and drive compliance with consumer standards. This was set out in the social housing White Paper, and this Bill provides the regulator with the power to deliver on that commitment. The regulator is currently developing its approach and will engage with the sector in the design of the regime. We should not pre-empt this by setting requirements in legislation.

The regulator has consistently followed policy objectives set by the Government. We do not believe that there is any risk of it not doing so regarding inspections. The regulator carries out many regulatory activities of significant importance without requirements in legislation. For example, the regulator already conducts regular inspections of the financial stability and governance of large private registered providers under the existing economic regulation regime. While the Government set the regulator’s objectives, they do not set duties for the regulator on how it ensures that providers meet the standards or mandate the regulator to carry out specific duties. This gives the regulator operational independence to regulate effectively and the flexibility to respond to changes in the operating environment. We should not compromise this. Adding a duty for inspections would create an imbalance and be a significant departure from the current approach. Consequently, we believe that it is for the regulator to design and implement inspections.

Amendment 33, tabled by the noble Baroness, Lady Hayman, relates to the Homes (Fitness for Human Habitation) Act 2018. As part of the revised consumer regime, the regulator will introduce a set of tenant satisfaction measures which landlords will be required to report on. These will provide tenants and the regulator with information on landlord performance, including in relation to the decency of stock and repairs, to allow them to hold landlords to account. As I set out earlier, the decent homes standard requires that a property must be free from serious category 1 hazards, as classified in the Housing Health and Safety Rating System (England) Regulations 2005. Homes are also required to be in a reasonable state of repair, have reasonably modern facilities and services, and provide a reasonable degree of thermal comfort. All registered providers are required to meet this standard. I reassure the noble Lord that these requirements mean that there is no need to introduce a separate reporting mechanism, which could create duplication and unnecessary complexity.

Following these reassurances, I ask noble Lords not to press their amendments.

My Lords, I am grateful to all noble Lords who took part in this debate. As this is the last debate, can I say that my noble friend the Minister deserves commendation for how she picked up this Bill at relatively short notice, has dealt sympathetically with a whole range of issues, and has undertaken to go back to the department with some of our concerns? I am a great fan of my noble friend Lord Greenhalgh, but her style is certainly somewhat different and more user-friendly.

The noble Lord, Lord Best, made the case for Amendment 29. He made two points: that this was the primary request of the Grenfell survivors; and that this was simply holding the Government to their own commitments. We both listened to what my noble friend the Minister said about the importance of not pre-empting anything, that there is no risk of the regulator not doing what was necessary and that it was important that it had operational independence. However, looking at the body language of the noble Lord, Lord Best, during the Minister’s response, it struck me that this might be an issue that he wanted to return to on Report.

Finally, turning to my own objection to Clause 4 standing part of the Bill, I was grateful for what my noble friend the Minister said. She went through the process, whereby a tenant should complain in the first instance to the landlord, and in the second instance to the Housing Ombudsman, and that is quite right. My concern and, I think, the concern of the noble Baroness, Lady Pinnock, was that the tenant might skip the Housing Ombudsman stage and go straight to the regulator, because of the increased powers that it has. Listening to the noble Baroness, I wondered whether the tenant could take the regulator to the ombudsman if the tenant was not satisfied with what the regulator had done.

Again, I am grateful for what my noble friend said in response to our debate. I quote her when she said, “More clarity is required”. I think she said that after the memorandum of understanding has been revised in the light of this Bill, it will then be made statutory. She also said that there is more to be done to inform tenants about how to seek redress, and there are remaining issues about clarity and communication that she will take back to the department. Against those assurances, I have no hesitation at all in withdrawing my objection to Clause 4 standing part and I am more than happy to see it added to the Bill.

Clause 4 agreed.

Clauses 5 to 8 agreed.

Clause 9: Appointment of health and safety lead by registered provider

Amendment 11 not moved.

Clause 9 agreed.

Clause 10: Electrical safety standards

Amendment 12 not moved.

Clause 10 agreed.

Clauses 11 and 12 agreed.

Schedule 1: Limited liability partnerships