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The order proposes changes to the way local housing authorities in England and Wales can delegate their housing management work under Section 27 of the Housing Act 1985 which it replaces. The changes are aimed at giving authorities more flexibility about the way in which they can let contracts for housing management. It also brings the section more into line with current legislation in clarifying the liabilities between the parties in these circumstances.
Currently, as landlords, local housing authorities are obliged to provide housing management services to their tenants. Section 27 of the Housing Act 1985 enables them, with the Secretary of State's approval, to delegate these functions to others by virtue of a management agreement agreed between both parties. However, Section 27 is framed in such a way as to prevent the "other party" from further sub-contracting the work.
This may not sound a significant restriction on local housing authorities and it may help if I explain the context of the proposed order. This particular piece of legislation was amended in the days of compulsory competitive tendering when single, short-term contracts were the order of the day. Ideas have moved on since then and we now expect authorities to be more imaginative about how they achieve value for money and how they provide best value to their tenants and residents. Consequently they need to be able to enter into arrangements with providers where those providers can perhaps offer better value by sub-contracting some or all of those services.
For instance, a housing association may be able to provide good quality housing management services to an authority, but to do so it needs to call on specialist suppliers such as those for sheltered housing or warden services. Under the current legislation, the authority would not be able to enter into such a contract which proposed sub-contracting the work. The changes proposed by the order enable management agreements to include clauses that enable the contractor further to sub-contract the work with the approval of the Secretary of State. In considering the proposed changes, it was recognised that there may be problems for a contractor should it want to replace a sub-contractor as a matter of urgency. That is likely to be particularly true where there must be compliance with the statutory and ODPM requirements to consult with tenants on such changes and seek the Secretary of State's approval. Consequently, the order allows for a moratorium period for a maximum of six months to be provided, during which the Secretary of State's approval is not required.
One further point to note is that the current Section 27 refers to the relationship between the contractor and the authority as that of "agent". In considering the changes to Section 27, it was felt that the term "agent" did not adequately reflect the liabilities between the parties, and the opportunity was taken to address that.
The Office of the Deputy Prime Minister consulted widely on that proposal. The majority of respondents82 per centsupported it. The Select Committee on Delegated Powers and Regulatory Reform concluded that the proposal was a suitable subject for a regulatory reform order and was satisfied that it should be submitted to the House for affirmative resolution. I thank members of that committee for the time that they spent scrutinising the proposal and recommending it to the House.
The Regulatory Reform Committee in another place also felt that the proposal was appropriate to the regulatory reform procedure. It recommended that clauses replacing the term "agent" should be redrafted for greater clarity. That we have done, and we feel that the result is much clearer and more easily understood. The committee agreed and unanimously approved the order. I commend the order to the House. I beg to move.
Baroness Hanham: My Lords, I thank the Minister. Even I would recognise that 82 per cent in favour was a majority. Once again, the order is almost non-controversial. Perhaps at some stage I should declare my interest as a member of a local authority, and as leader of one of the first councils to turn the tenants' management organisation into one cross-borough organisation. I am in some sympathy with what is proposed in the order, which is the further possibility of delegation of housing management to other organisations, and more flexibility with that.
The Minister probably mentioned a couple of the points that I am making, so I am sorry if I am going to labour them a bit. If he did not say so before, will he say whether PFI contracts will be part of the housing management delegation? Will it be possible for them to be PFI, or will there simply be a direct delegation down to another organisation, such as a housing association or another tenants' group? Indeed, presumably a private company could be brought in by the housing department to take over the management.
The Minister made a point about tenants and the restriction on sub-contracting. It seems extremely important that the tenants are involved if there is any question of a contract being sub-contracted. The suggestion was that the Secretary of State would be able to delay such a proposal for six months. However, it is very necessary that tenants know exactly who their management is and under what basis they are managed.
Will the share of liabilities between sub-management, management and the authoritythree parties are involvedhave to be properly delineated in law, so that tenants understand exactly the situation and relationship between one body and another?
Baroness Maddock: My Lords, I do not think that the issue is particularly controversial. We on these Benches would be in favour of local government having more discretion about its decisions. Like the noble Baroness, I was very interested to know how the order fits in with PFI. We have so many different branches and ways of organising things these days that sometimes I become a little concerned about how they fit in with each other.
That said, if the Government were in favour of giving local government the power of general competence, we would not have to go through so many complicated orders and so much legislation. We have made that point many times. I also understand that there were certain recommendations, to which the Minister referred, from the House of Commons Regulatory Reform Committee and from the House of Lords Select Committee on Delegated Powers and Regulatory Reform. I am pleased to say that the Government took notice and changed the order accordingly.
Lord Evans of Temple Guiting: My Lords, may I first say a few words about PFI, which is obviously an important issue. The Commons Select Committee's report showed that it was slightly concerned about the government policy of using PFI for council housing and wished for a wider debate on the matter. It rightly felt that it was not appropriate to use the regulatory reform order to do that. However, the report makes it clear that the committee looked to the Government to instigate such a debate, and it is our intention to make arrangements for that.
Tenants will be consulted, and the Secretary of State will want confirmation of that in order to give approval. The noble Baroness, Lady Hanham, asked how liabilities were delineated. The local authority remains ultimately responsible under the order, except in two circumstanceswhere it is defined in the contract otherwise, or where there is criminal liability.
The noble Lord said: My Lords, I beg to move the order standing in my name on the Order Paper. It is the fourth order from the Office of the Deputy Prime Minister to be brought forward under the Regulatory Reform Act 2001.
The Deputy Prime Minister made it clear in his recent Sustainable Communities action plan that co-ordinated long-term action was needed on a range of fronts if we were to address the complex housing problems that we face. Tackling the problems of shortages of affordable housing means making best use of the existing stock as well as providing additional housing. One of the mechanisms for doing that is the cash incentive scheme. Under that scheme, grants are paid to existing council tenants to help them buy a house of their own, thereby freeing up housing for a household in need. That can provide considerably better value for money than new build.
The reform order will remove the current requirement for housing authorities in England to obtain consent from the Secretary of State to run a scheme. The change, which is a simple and non-contentious onefamous last wordswill lead to a small reduction in administration for authorities and allow them to tailor schemes to suit local needs and make them more attractive to tenants. We expect that to provide a helpful boost to the scale of activity under the schemes.
The Office of the Deputy Prime Minister consulted all local authorities, tenants' groups and other bodies with an interest. The proposal received overwhelming support from the consultees who responded. The Select Committee on Delegated Powers and Regulatory Reform concluded that the proposal to allow English local authorities to run cash incentive schemes without the Secretary of State's consent was appropriate within the meaning of the Regulatory Reform Act 2001. It also considered that the order, as it now stands, is in a form satisfactory to be submitted to the House for affirmative resolution. I thank members of that committee for the time they spent scrutinising the proposal and for recommending the proposal to the House.
The Regulatory Reform Committee in another place considered that the proposal would remove a burden imposed on local housing authorities. The committee was satisfied that the proposal would not prevent any person from continuing to exercise any right or freedom that he or she might reasonably expect to continue to exercise. It was also satisfied that the proposal took appropriate account of the likely costs and benefits which might result from its implementation. The order was approved unanimously by the committee in another place. I now commend it to the House.
Moved, That the draft regulatory reform order laid before the House on 11th March be approved [15th Report from the Regulatory Reform Committee].(Lord Evans of Temple Guiting.)
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