My Lords, this has been a very interesting debate so far. In the interests of time, I will just speak to the two amendments I have in this group, and then I will be very interested to hear the Minister’s response to the broader debate and issues that have been raised, that were clearly also debated in Committee.
Amendment 231 is about a registered social landlord not being able to
“use the income from rents or service charges to rectify defects relating to external wall systems or compartmentations where those defects result from the construction of the property or the installation of the external wall systems.”
The amendment would prevent local authorities using rental income or service charges to pay to remediate dangerous cladding or other fire safety defects. The aim is to give social housing tenants the same protection as leaseholders. While we support the Government’s efforts to protect leaseholders from the cost of remediation, the arrangements currently being considered by Ministers will mean that the cost of remediating social housing blocks falls on housing associations and council housing revenue accounts.
In the case of council housing, the main sources of income within the HRA are from tenants, in the form of rent and service charges. If the cost of fixing council
housing falls on the HRA, then either rents, service charges, or potentially both, will need to increase, or maintenance improvement of social housing as well as new social housing delivery will need to be cut back. That is our concern. We clearly support the protection of leaseholders, but the protection of home owners who will eventually make a profit from the sale of their property, cannot and must not come at the expense of social housing tenants. Our proposal would prevent that outcome and instead require the Government to protect tenants such as leaseholders by requiring the industry to pay, with the taxpayer as a fallback provider of funds in recognition of any failings that created this crisis in the first place.
We discussed my Amendment 22 in Committee. It states:
“The regulations must exempt any relevant application made by or on behalf of a registered social landlord for the provision of social housing as defined under section 68 of the Housing and Regeneration Act 2008.”
The purpose behind this is to make social housing providers exempt from the additional financial burden of the Government’s proposed levy in order to prevent council tenants effectively subsidising the failures of private developers. Clause 57 of the Building Safety Bill gives the Secretary of State powers to impose a new building safety levy in England. This will contribute to government costs for remediating historical building safety defects and will apply to developers making application to the building safety regulator for building control approval. This is the new gateway 2 system, which will be introduced in building regulations.
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The levy is also going to be imposed on councils, which are already facing additional financial pressures because of the last two years of the pandemic. Our concern is that as a result of this levy being imposed on councils, council tenants will effectively be subsidising the failures of private developers and paying the cost of remediating both private housing and council housing. If the levy is imposed on councils, it will increase the cost of building or refurbishing social housing, or it will increase rents. Yet the benefits of the funds will not be available to the tenants who would otherwise have benefited from lower rents or improved housing. We are asking the Minister if he will recognise the impact of the levy on social housing supply and not pit the objective of providing for those in housing need against the objective of making buildings safe, when we believe both those objectives need to be delivered by this Bill.
We know that the sector already faces huge cost pressures, not least because of the general maintenance costs associated with our ageing social housing stock. If social landlords have limited access to government funding, they will have to divert their own strained resources for maintenance and new build supply into building safety remediation, thus undermining the sector. It does concern us that if this is not taken into account, there will be a negative impact on those in housing need and particularly on the quality of housing for some of the poorest people in our country, for whom we know social housing needs a lot of improvement. This is very important to us; we believe
it is a knock-on effect that must be avoided. I will listen very carefully to what the Minister has to say, but if we do not have a reply that we feel is substantive, we will be looking to divide the House on this matter.