The Regulation of Registered Social Landlords (Wales) Bill - The Latest Developments
In October 2017 the Welsh Government introduced The Regulation of Registered Social Landlords (Wales) Bill to the National Assembly for Wales. As regular visitors to TPAS Cymru’s website may recall the Bill was introduced in an attempt to reverse the ONS’s decision to reclassify housing associations in Wales as part of the public sector, the previous year. The ONS had reached this decision based on the extent of the controls exercised by Welsh Government over housing associations. It was argued that it was necessary to reverse this decision for a number of reasons, perhaps most significantly because it would be difficult for housing associations to borrow money from the private sector to build more social housing. The Bill was therefore introduced to reduce these government controls and to reverse the ONS’s decision.
The Bill has now entered stage 3 (the penultimate stage) of the National Assembly’s legislative process. Welsh Government Ministers and Assembly Members have now been given a period to table amendments to the Bill ahead of an Assembly Plenary session on the 24th of April. Whilst the overall principles that underpin the Bill have been broadly welcomed by politicians and the social housing sector in Wales, the Welsh Government has tabled an amendment for consideration at the Plenary session. TPAS Cymru believes this amendment would improve the Bill, giving tenants greater protection.
The amendment tabled by Welsh Government concerns section 4 of the Bill. Section 4 of the Bill removes the requirement for housing associations to get the consent of the Welsh Government before amalgamating with another housing association or making other structural changes. If the Bill is enacted, housing associations will therefore only have to notify the Welsh Government if such changes take place. Whilst some concerns have been raised that such a change would reduce the Welsh Government’s ability to control housing associations, the potentially significant negative consequences of failing to reverse the ONS’s decision makes this change necessary.
Wales is not alone in having to enact legislation to reverse the ONS’s decision to reclassify housing associations, with the governments in England and Scotland having already taken action or being in the process of enacting legislation to deal with this issue. Both nations have also decided that reducing their respective governments’ control over amalgamations and other structural changes is necessary. The Scottish Government, however, had taken a slightly different approach to the Welsh and English Governments. In Scotland, the Housing (Amendment) (Scotland) Bill contains a provision that would require housing associations to consult with their tenants in the event of an amalgamation taking place, or if their association sought to make further structural changes. When the Welsh Bill was first introduced, no such provisions were in place.
This difference in approach drew the attention of the National Assembly’s External Affairs and Additional Legislation Committee. The Committee questioned why the Welsh Government had not sought to place similar requirements for consultation on the face of the act. In its own evidence to the Committee, TPAS Cymru stated that it would be supportive of any changes that were made to the Bill that would move the position in Wales more in line with Scotland, as long as it did not risk the ONS’s deciding against moving Welsh housing association back into the private sector. Having considered all the evidence before it, the Committee recommended that the Bill should be amended to “strengthen the role of tenants on RSL Boards which set out a formal process for tenant participation before certain constitutional changes and/or mergers are made.”
Having initially questioned the need to bring forward such amendments, the Welsh Government have now decided to do so. If the amendment, tabled by Welsh Government is accepted, then housing associations in Wales will have to provide the Welsh Ministers with a statement about the consultation carried out before they made such changes. This requirement will not be absolute. For example, the requirement to consult will not be present in cases where a housing association is in significant financial difficulty.
In addition to the Welsh Government’s amendments, a series of amendments have also been tabled by the Conservative Assembly Member, David Melding. Melding’s amendments, if accepted, would see changes made to a number of sections to the Bill, including section 4. His proposed amendments to section 4, would also see a requirement placed on housing associations to consult with their tenants before they merged with another association or made constitutional change. The amendments tabled by Melding with regards to section 4 arguably go further than the Welsh Government’s tabled amendments, placing further explicit requirements on social landlords to engage with their tenants in such circumstance. It remains to be see which approach will be favoured by the National Assembly.
Regardless of the approach adopted, TPAS Cymru believes that these amendments have served to highlight the importance of tenant participation in Wales. We will continue to seek to work with landlords, tenants and interested stakeholders to help develop participation activities within social housing, as the sector faces the challenges and opportunities facing the sector in this ever changing environment.