My Lords, I support this amendment. I will keep my comments short because my noble friend Lord Best covered very well the key issues. I shall make a small number of points. First, this housing supports people who are most at risk and most in need; that is, domestic abuse refuges, homeless hostels and shelters for frail, older people. Secondly, some housing associations have made a very serious investment and commitment to this form of housing. If we do not accept these properties, the effect would be to penalise those who have taken the bold steps to make this sort of provision.
The noble Lord, Lord McKenzie, referred to Riverside, with which I have also met. Its calculation is that the rent reduction will result in an overall loss of income from Riverside-supported housing schemes of £2.3 million per annum. Crucially, by 2019-20, nine schemes will be pushed into becoming loss-making schemes. A housing association that has done the right thing and has invested in crucially needed, supported housing will face significant losses in its operation of that housing.
Thirdly, an already fragile set of services will become more so. In that context, it is almost certain that housing associations burned on this occasion will not invest in the future. We will put at risk a crucially needed new supply of housing to meet these needs. Something that was previously marginal will become unviable and we will therefore see the consequences of this down the track.
Like my noble friend Lord Best, I cannot believe that this was an intended consequence of the Government in their rent reduction policy. This amendment addresses the issue head on and seeks to put it beyond doubt for those housing associations which have already invested in this type of accommodation or which plan to invest in it.