Enter Sir Bob, a man ahead of his time

The Housing and Regeneration Bill completed its House of Commons stages on 31 March and went to the Lords — in a significantly different form to the Bill introduced last November.  It is even longer and incorporates literally hundreds of government amendments.

Why the changes?  Like many other bills, this one was drafted in a hurry and it shows.  There was a real need for tidying up weaknesses or gaps in the original.  In addition, a number of serious policy concerns were highlighted at Second Reading and in the subsequent Evidence Sessions held by the Public Bill Committee in December.  These prompted detailed debates during Committee scrutiny and led to a series of important government amendments at Report Stage.

The Bill is the largest and most important legislation affecting housing and regeneration policy for many years.  Its main purpose is to underpin delivery of the government’s ambitious housing policy objectives spelt out in the green paper published in July 2007, including:

• an expanded housebuilding programme with the target of three million more homes to be built by 2020

• a substantial uplift in the number of social and affordable homes

• more effective partnerships between local authorities, housing associations and the private sector to create sustainable and mixed-tenure communities

• higher design and environmental standards so that all new housing should be zero carbon by 2016.

To help achieve these objectives, the Bill establishes two new agencies:

1. The Homes and Communities Agency will be the main delivery vehicle for the government’s housing and regeneration programmes.  The agency will combine the funding role of the Housing Corporation, with the land assembly and regeneration roles of English Partnerships.  

Additionally it will take on some roles currently discharged by the Department for Communities and Local Government, notably the Decent  Homes Programme for improving older substandard housing, and the Academy for Sustainable Development.  This will help the agency play a key role in promoting high standards of design and environmental performance.

The original proposal was for the new agency to come into existence in April 2009, but there is now a good prospect that it will be operational by late 2008.  This acceleration of the timetable reflects the energetic approach of Sir Bob Kerslake who has already been appointed as chief executive for the new agency.

2. The second new agency, Oftenant, will regulate the providers of social housing.  It will take over the former Housing Corporation role as regulator of housing associations, but will in due course also act as regulator for public sector housing providers including local authorities and ALMOs (Arms Length Management Organisations).  This gives effect to the recommendation of the Cave Review that there should be a single ‘domain’ regulator for social housing.

From the moment the Bill was published in November 2007, fears have been expressed that the regulatory regime as defined in the Bill could fail to meet Cave’s prescription of a ‘light touch’ regulator which would not impose undue bureaucratic burdens or red tape.  There was also a potential risk to the independence of housing associations and their classification as not public sector bodies.  This is absolutely crucial to their ability to raise finance privately without this counting against public expenditure.  Some £35bn of private finance has been raised in this way over the past two decades.  Were the classification to change, the whole government social housing programme would have been holed below the water line.

So the importance of the amendments incorporated as report stage cannot be over-emphasised.  The most important ones were designed to ensure that the regulatory regime is not over-prescriptive, does not inhibit the ability of housing associations to manage their objectives, and does not unintentionally create such a degree of ministerial control over their operation as to threaten their classification as independent bodies outside the public sector.

At the same time the regulatory regime has to set high standards and incentivise social housing providers to provide high quality value for money services, responsive to the needs of their tenants.  

It also has to allow intervention where necessary to tackle failure so that tenant security and public investment is not put at risk by the collapse of any individual organisation and that the confidence of lenders, vital to the sector’s ability to raise private finance, is not jeopardized.

The Bill as amended steers a sensible course between these potentially conflicting pressures, with a clear emphasis on ‘light touch’ regulation as envisaged by Cave, but with tough intervention powers if required in individual cases.  

Of course, the real test will only come when Oftenant is up and running, and a great deal will depend on the calibre and approach of the key personnel appointed to run the new regulatory body.  However, the legislative framework now looks much sounder than it did six months ago.

Nick Raynsford is MP for Greenwich and Woolwich.