Meeting of the Parliament

Meeting date: Thursday, May 31, 2018

Official Report 879KB pdf

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Housing (Amendment) (Scotland) Bill: Stage 3

Before the stage 3 debate on the Housing (Amendment) (Scotland) Bill begins, I am required under standing orders to decide whether any provision of the bill relates to a protected subject matter—that is, whether it will modify the electoral system and franchise for Scottish Parliament elections. I have decided that no provision of the bill relates to a protected subject matter, and that therefore it does not require a supermajority for it to be passed at stage 3.

The Deputy Presiding Officer will take the chair.

We have no time in hand, so I must be extremely strict about speaking times. [Interruption.] I cannot find my glasses, so the clerk is telling me who the first speaker will be.

The next item of business is a debate on motion S5M-12483, in the name of Kevin Stewart, on the Housing (Amendment) (Scotland) Bill, at stage 3.

I call Kevin Stewart to speak to and move the motion, and I will try to find my glasses.

15:54  

Presiding Officer, I am happy to lend you my glasses, if that will help. Oh—I see that you have found yours. That is fine.

I am delighted to have the opportunity to open the stage 3 debate on the Housing (Amendment) (Scotland) Bill. I thank the convener and the members of the Local Government and Communities Committee for their careful scrutiny of the bill. The cross-party support that the bill continues to receive is very welcome.

I have made it clear all along that the bill is a short but essential measure, and that it is necessary because of the decision by the Office for National Statistics to classify registered social landlords as public sector bodies in the national accounts. The bill will amend a number of the powers that the Scottish Housing Regulator can exercise over RSLs, while also providing for ministers to limit local authorities’ powers over housing associations.

If the classification decision by the ONS was left unchanged, the Scottish Government would face significant financial consequences, with all new net borrowing by RSLs—which would previously have counted as private borrowing—being counted against the Scottish Government’s borrowing limits, which would in effect add £1.5 billion to our £3 billion housing investment programme.

There was clear agreement in the chamber during the stage 1 debate that should we take no action to ensure that RSLs were reclassified back to the private sector, we would be putting at risk the Government’s commitment to deliver 50,000 new affordable homes. That is a risk that we simply cannot take.

As well as its having support in the chamber, I am delighted that stakeholders have also recognised the need for the bill and that they support its general principles. We continue to work in partnership with key organisations including the Scottish Federation of Housing Associations, the Glasgow and West of Scotland Forum of Housing Associations and UK Finance, which have greatly assisted us in developing a focused bill that addresses the matter at hand.

The Deputy Presiding Officer may recall that during the stage 1 debate I confirmed that the Scottish Government would lodge an amendment that would provide for the regulation-making powers in sections 8 and 9 of the bill to expire three years after the bill receives royal assent. By way of background, section 8 of the bill gives ministers the power to make further modifications to the functions of the SHR, beyond those that the bill makes. I have been clear that we would exercise the power in section 8 only if, after the bill has been enacted, the ONS were to conclude formally that the changes to the Scottish Housing Regulator’s functions are not enough to enable it to reclassify RSLs back to the private sector.

Section 9 is different in that we know that we will need to use the power that it confers before the ONS can review the classification of RSLs. That power will enable ministers to make regulations that limit or remove the influence that local authorities might exert over RSLs through any ability that they might have to appoint officers or to exercise certain voting rights. We expect, subject to Parliament passing the bill for royal assent, that section 9 regulations will be laid before Parliament in early September.

Although such regulation-making powers are a sensible precaution, we took on board the concerns of stakeholders, the Delegated Powers and Law Reform Committee and the Local Government and Communities Committee, which expressed concerns about the open-ended nature of the provisions. I am therefore delighted that the Local Government and Communities Committee agreed unanimously on 9 May to a sunset clause amendment.

That brings us to today’s important debate. I thank Parliament once again for the opportunity to speak about the Housing (Amendment) (Scotland) Bill and the crucial role that it will play in ensuring that we can deliver our ambitious affordable housing programme. I look forward to hearing the views of other members on this important issue.

It gives me great pleasure to move,

That the Parliament agrees that the Housing (Amendment) (Scotland) Bill be passed.

I call Graham Simpson to open for the Conservatives. You have five minutes, please.

15:59  

I certainly do not intend to speak for five minutes. It is important, if not—dare I say it—vital to the social housing sector that this technical and uncontroversial bill be passed. If the bill were not to be passed, that would make it extremely difficult for housing associations to play their part in meeting the Government’s affordable homes target.

Housing associations were classed as private bodies for accounting purposes until the Office for National Statistics decided to change their status to public bodies. The effect of the change was that any borrowing that they made would count against the Scottish Government’s borrowing limits, which would, in turn, mean that the Government might have had to limit what RSLs could borrow, which would not be good. In order to get over that hurdle, we need to reclassify RSLs as private sector bodies. Consequently, it is necessary to loosen the SHR’s powers over them. Therefore, the effect of the bill will be to allow housing associations to enjoy more freedoms, and to enable them to deliver more.

The bill narrows the powers of the regulator to appoint a manager to a housing association, and to remove, suspend and appoint officers. It also removes the need for the regulator’s consent for disposal of land and housing assets by an RSL, and the need for the regulator’s consent for changes to the constitution of an RSL and for the voluntary winding-up, dissolution and restructuring of an RSL, while protecting tenants’ rights to be consulted about certain changes. It also provides Scottish ministers with regulation-making powers to limit the influence that a local authority has over an RSL.

As the minister has said, there was, at stage 2, only one amendment, which added a three-year sunset clause to ministers’ regulation-making powers under sections 8 and 9. The change was a response to concerns that the Local Government and Communities Committee, the Delegated Powers and Law Reform Committee and bodies including UK Finance had raised about the open-ended nature of the powers.

My short speech shows how uncontroversial the proceedings have been. The sector wants and needs the legislation; Parliament wants it, too. We should proceed without any fuss.

I am well under my allotted five minutes, and I intend to sit down.

Nobody is pressing you to stand for any longer than is necessary, Mr Simpson.

16:02  

We have moved to stage 3 without any amendments being lodged at this stage. The fact that this will be a short and agreeable debate shows just how uncontroversial and sensible the bill is. Labour will vote for the bill at decision time in order to protect the provision of affordable and social housing.

I take the opportunity to thank the parliamentary clerks, the professionals across the registered social landlords sector and the SFHA, in particular, for helping to ensure that the bill has progressed so smoothly. Thanks are also due to the Minister for Local Government and Housing, the Local Government and Communities Committee, and my colleagues Elaine Smith, Monica Lennon and Alex Rowley, who have worked on the bill these past few months.

On paper, we are changing how housing associations are regarded for the purposes of national accounts. Although at first glance the effect of the bill is fairly minor, it is clear to me that the issue under debate—ownership of housing and how the system is structured to protect social and public housing—needs thoughtful consideration.

By legislating to protect the future of social and co-operative housing, we are again working to support Scotland’s efforts to tackle poverty by building 50,000 more affordable homes.

In the stage 1 debate, my colleague Elaine Smith remarked that she is

“not naturally drawn to reclassifying a body from the public ... to the private sector.—[Official Report, 29 March 2018; c 102.]

I think that most of us would take that position, although we accept that we must legislate in order to protect the Scottish budget and the ability of RSLs to build desperately needed new homes.

It is because of Brexit and universal credit that RSLs face new challenges to secure debt and to building the 50,000 affordable homes, so adding the risk of not acting would simply be the wrong thing to do.

The bill will change not only the status of the RSLs, but the powers of the regulator. In particular, it will allow it to intervene in struggling RSLs and to access information.

In March, Andy Wightman rightly spoke about the need to involve tenants better in RSLs. If an RSL is being run well—with tenants and not for them—we should have nothing to fear. However, there is more work to do to ensure that tenants, the regulator and local representatives can speak up and get the information that they need to challenge management or intervene.

Given that we have begun a thoughtful debate about ownership, perhaps we need to think more fully about how tenant participation can be improved and how housing associations will report. Although lenders will require clear accountability from RSLs, it is welcome that the SFHA has committed to maintaining current standards, and that the Government has committed to moving towards freedom of information.

The bill has allowed some space for more debate about the housing sector: long may that continue. For today, I encourage members to support the bill so that RSLs can get on with playing their part in building the 50,000 homes, which is vital if we are to tackle poverty and solve Scotland’s housing crisis.

16:05  

I thank the minister and my colleagues on the Local Government and Communities Committee who have been scrutinising the bill. It is fair to say that it has not been the most challenging bill to scrutinise but, nevertheless, we have done our job well. It is the first piece of legislation that the committee has dealt with. The second one—the Planning (Scotland) Bill—will present somewhat different challenges.

The bill is technical. At stage 1, I said that I agreed entirely with the minister’s remarks in his opening speech and, today, for the second time, I can say that I agree entirely with his opening remarks. I also agree with Graham Simpson’s remarks. We will vote for the bill at decision time, but I will not rehearse the reasons why; instead, I will use the next couple of minutes to reflect further on what we need to do to secure the human right to an affordable warm home, to which everyone is entitled.

As I observed at stage 1, the collective provision of housing has a long history. Here in Edinburgh, for example, the Edinburgh Co-operative Building Company was established in 1861 and was made up of workers from many different trades, including stonemasons, joiners, plasterers and plumbers. The poor state of housing in the old town and soaring prices in the new town meant that Edinburgh artisans were in desperate need of good-quality affordable housing. The company set about building its first colonies at Glenogle park in Stockbridge, and the 11 terraces were completed between 1861 and 1872. Indeed, I think that some members of the Parliament and certainly some House of Commons members live there. The colonies offered an alternative to traditional tenement accommodation and were intended to be flats that felt like houses, with each family having its own front door and garden.

Does Mr Wightman agree that it is good to see the likes of the Port of Leith Housing Association develop new colony housing in the Leith Fort area?

Yes. I have visited that development and it is very impressive. That underscores the need to have much more public-led development of affordable housing to a high standard and with good design.

The co-operative nature of the Edinburgh Co-operative Building Company was reflected in its motif of a beehive and in the fact that workers could buy shares in the company, the dividends of which could be put towards purchasing a house. Over the past 150 years, there have been many other examples of co-operation. Housing associations have played an important role in the housing story since the recognition of registered housing associations in the Housing (Scotland) Act 1974. In a debate such as this, it is important to acknowledge the good work of housing associations and particularly rural social landlords such as Lochaber Housing Association and Waverley Housing, which is in the Scottish Borders, as well as the many urban organisations.

Although today we affirm the value and validity of housing associations as private organisations, we should be mindful of the need to broaden out the debate on how to provide affordable homes, reflecting in part on the history of the co-operative movement in housing. We need to resurrect the co-operative principles of the past, refreshed for the modern era by making legislative, policy and fiscal changes to promote them as well as other models such as co-housing. As Mark Griffin pointed out, we need full democratic involvement of tenants in housing associations and council housing. Importantly, we need radical reform in the private sector. For example, in Sweden, the Swedish Union of Tenants collectively bargains with landlords across the whole of Sweden over the rents of 1.4 million tenants. That is the gold standard for tenant participation and rent regulation to which we should aspire in this country.

Those are the kind of next steps that we need. I look forward to engaging with members in the debate on that over the next couple of years. In the meantime, I agree with the general principles of the Housing (Amendment) (Scotland) Bill, and Greens will vote for it at decision time.

16:10  

It was a privilege to be the convener of the Local Government and Communities Committee as the bill was making its way through the committee stages. I thank my fellow committee members and everyone who gave evidence to the committee, including Mr Stewart, for their constructive and collegiate approach to this rather technical bill.

The bill must be passed. If it is not passed, as we heard, the Office for National Statistics will reclassify RSLs, which could take the Scottish Government’s borrowing past the maximum permitted limit of £3 billion to £4.5 billion, which would be illegal, given the constraints of the devolution settlement. Cuts would be required elsewhere and there would be an impact on our target of building 50,000 affordable homes, among other things. That is just a fact.

It is also a fact that the bill must limit the Scottish Housing Regulator’s powers to intervene and limit local authorities’ influence over registered social landlords.

I am glad that there is now a sunset clause in the bill. We will not know whether the bill will do what it says on the tin until it has been passed and the ONS makes its decision, so the Scottish Government will need the power to act after the bill has been passed, to ensure that we have got the approach right. I am delighted that the presence of the sunset clause ensures that the new powers are not open ended.

Just as important, I am delighted that UK Finance supports the bill. Despite the Scottish Government’s significant investment in social housing across the country, housing associations and registered social landlords still have to borrow money in the commercial sector to make up the shortfall so that they can invest in housing development. It is therefore vital that UK Finance should have confidence in the system.

We should have confidence in our registered social landlords. The bill will give them additional freedoms—it will give them the freedom to flourish. I will talk about ways in which they are flourishing already, but first let me say that, as a constituency member of the Scottish Parliament, I know that when I hear a tenant’s opinion of their social landlord it is often because the tenant has an issue as a result of their interaction with the landlord. Members therefore sometimes get a slightly jaundiced view of social landlords.

In my constituency, however, the wider role of registered social landlords is a significant success story, and when the bill is enacted RSLs will be able to take an even wider role. When I use the phrase “freedom to flourish”, I am thinking about NG Homes, in the north of my constituency, which invests in the pitstops project, in partnership with School of Hard Knocks. The project brings together people who are very far from the employment market and gives them teamwork activities—rugby is the common thread—to get them closer to employment, and it has had huge success. I am thinking about the sports co-ordinators that RSLs appoint.

The Scottish Government does not have to intervene in the activities of registered social landlords, because they are doing pretty well already. That is the experience in my constituency. RSLs know their communities best, and the bill will give them the power to do more.

Queens Cross Housing Association, in my constituency, has a community chest fund, which it uses to alleviate poverty, not just for tenants but for residents more widely in the local community.

I could go on at length about the variety of benefits that registered social landlords provide to communities, but I will not do so, Presiding Officer—oh, I see that you are indicating that there is some time in hand. Let me tell members some more, then.

Registered social landlords should be empowered to do more to regenerate our communities. In Royston, for example, Copperworks Housing Association, Spire View Housing Association, Blochairn Housing Association and Glasgow Housing Association are producing a local place plan—although such plans will not be on a statutory footing until the Planning (Scotland) Bill has been passed—about regeneration in their communities, because they know their communities best. Cadder Housing Association is doing something similar, through its emerging Cadder vision.

I have talked about the good work that housing associations are doing, and I will leave it at that. We have nothing to fear from the bill, because registered social landlords are already doing a fantastic job, throughout my constituency and throughout Scotland. The bill is a technical bill, which will enable RSLs to get on with the job and ensure that we can continue to invest in our communities and social housing stock the length and breadth of Scotland.

16:15  

It is difficult to know what else can be said about the bill, given the consensus in the chamber. I thank the minister and the Local Government and Communities Committee for the work that they have done on the bill.

As Kevin Stewart said, although the bill is technical, it is absolutely necessary. If we were to lose £1.5 billion of the £3 billion of much-needed investment in Scotland, that would create a major difficulty. We all agree that, as Shelter has set out many times, there is a housing crisis in Scotland that we need to tackle, and I know that the minister is absolutely committed to working with local government to make that happen. This morning, I read Shelter’s “Review of Strategic Investment Plans for Affordable Housing”, which it published in February, and it suggests that we are on track with building the much-needed houses.

As housing associations have built new houses over the past decade, they have included houses for people with specific needs. That is certainly the case in Fife, where my experience is from. They have been good at building specific housing for older people and people with disabilities. As we know, the housing crisis is not just about the lack of housing, although that is the key factor. It is also the case that demographics are changing in our country.

I totally agree that we have to get the housing right for people’s needs in various areas. When I was in Cupar in Fife recently, I was pleased to see that Kingdom Housing Association is building a new development with larger housing that has more bedrooms for larger families, and wheelchair-accessible housing. I want to see such schemes across Scotland. I have made it quite clear that, in terms of subsidy, there will be flexibility in that regard for specialist housing and the larger homes that are required.

Absolutely.

As Mark Griffin said, although the bill is technical, it has allowed housing to be debated again. There was a time in politics when housing was up there among the key issues on the agenda. Indeed, at one point, the issue was so influential that it could bring down the Government of the day, but sadly it has slipped back. We need to get it back up there.

The specific-needs housing that is built also has a knock-on effect, and in that regard we need to look at the types of housing that are being built within the 35,000 houses for social rent. I do not know whether other members have experienced this, but while doing street surgeries I have talked to people who live in large houses that they have brought their families up in and who want to move to smaller houses, but who find that the only thing that the council has to offer is flats. If people have had a house with a back and a front door and they have brought up their family there, why would they move in their later years to a flat somewhere and a different way of living?

The more that we build housing specifically for older people and people with disabilities, the more we create a chain reaction that frees up houses for families, and in that way we will get more out of the housing stock.

I welcome the bill, because it would have been devastating to lose the investment. We have got it, and we should move forward and continue to build on the consensus in this Parliament that we should, and we will, tackle Scotland’s housing crisis.

That is the end of the open debate. I call Mark Griffin to close for Labour.

16:19  

I am pleased that today’s debate has given confirmation—if any were needed—that the Housing (Amendment) (Scotland) Bill will be passed and that social and co-operative housing will be protected. We have spoken again about the importance of, and ownership of, housing, and I am pleased that we have had that discussion.

Earlier, I spoke about our ambition to hit Scotland’s affordable housing target of delivering 50,000 homes by the next election. Although Scottish Labour would want to go further than that, the important thing is that we create the conditions in which to deliver that number.

The technicalities of the bill might be boring, but the legislation secures the Scottish budget and the investment that we can make in affordable housing while ensuring that RSLs can borrow effectively. The protection of the Scottish budget also ensures that local authorities can secure grants and deliver social housing. In the Central Scotland region, North Lanarkshire Council has set out its plans not only to deliver, by 2027, 5,000 new homes that will provide warm, safe roofs over the heads of Scotland’s poorest families, but to do so affordably. That is why we must set the right conditions for delivering them. As with housing associations and co-operatives, the proceeds can go back into the system—not to landlords or buy-to-let lenders—and workers in North Lanarkshire and across the country will benefit from the boost to jobs.

It has been a busy week for housing. The Parliament has begun its debate on the Planning (Scotland) Bill and the Government has been lobbied to put ambitious finishing touches to the proposed warm homes bill. I dare say that the minister has more vigorous legislative challenges ahead that are key to delivering those housing targets. Nevertheless, as much as any other piece of legislation, this bill is vital to securing much-needed homes, and I am glad that we have set out our agreement to protect part of our housing sector today.

I call Kevin Stewart to wind up the debate. If you could keep going until 4.30, minister, I would be most obliged.

16:21  

Graham Simpson has obviously not taken his opportunity to wind up today. I did not expect to have eight minutes, Presiding Officer, but I am sure that I can keep going. I am not sure that I will wax lyrical, but I will keep going until 4.30.

I am grateful to members right across the chamber for their helpful and constructive contributions to the debate, and I thank everyone who has been involved with the bill. Although, in some regards, it has been easy for us, as parliamentarians, to scrutinise the bill, I ask members to spare a thought for my officials who have had to deal with this piece of legislation, which is more complex than many people might think. Although it is highly technical, it has required a lot of work, and I thank my officials for their efforts in that regard. I also really appreciate members’ cross-party support. It might be easier for me to get a piece of legislation passed at stage 3 on this occasion than it will be in the future, but—hey—maybe we will have consensus on things to come, too.

As all members will know, the Government has a clear and defining reason for making housing a priority: the provision of good-quality, warm and affordable homes is vital to creating a fairer Scotland, securing economic growth and supporting and creating jobs right across our country. At the heart of that vision sits our commitment to deliver at least 50,000 affordable homes over the course of this session of Parliament, with 35,000 of those being for social rent.

A couple of weeks ago, the First Minister confirmed that the Scottish Government’s target is to build—I stress the word “build”—50,000 affordable homes. Is that the minister’s understanding, and will the report against that target cover how many homes have actually been built?

I want to deliver more than 50,000 affordable homes, but I can do so only with the co-operation of local authorities and housing associations. One of the things for which I have been known is flexibility on local authorities meeting needs in their areas. Some of them will buy housing off the shelf or will buy back in order to allow people to move, and I am not going to remove that flexibility.

Our £3 billion investment will deliver many more than 50,000 affordable homes, and more homes will be built right across the country, including the housing for people with varying needs that Mr Rowley mentioned, such as for disabled people and for those needing larger homes. I rely on local authorities and housing associations to make good use of their knowledge of housing need and demand assessments and of local housing strategies to deliver for all the people of Scotland. I am pleased that we had the opportunity to debate that issue last night, during Joan McAlpine’s members’ business debate, and that these debates are becoming more consensual.

During the previous parliamentary session, we delivered more than 33,000 affordable homes, which was 10 per cent above the target of 30,000. The Government intends to build on that great achievement with the co-operation of stakeholders, and we are making good progress towards our target, as Mr Rowley pointed out. The Shelter report shows that we are on track, so it is not only me and the Government who are saying that; stakeholders are also saying it. However, we cannot be—and I will never be—complacent in that regard.

Recent statistics show that the number of approvals for new housing association homes is up by 33 per cent on the previous year, laying the foundations for a pipeline of proposals that are capable of delivering the remainder of the 50,000 homes by 2020-21.

At a local level, there are good examples of progress on increasing the pace of delivery. Those include the use of public sector land to deliver more than 200 affordable homes at the Craiginches site in Aberdeen, charitable bond donations delivering homes for social rent and the expansion of housing association activity into new geographic areas, such as in Cunninghame Housing Association moving from its traditional Ayrshire area to Dumfries and Galloway. Some housing associations have joined with others to provide agency support for partners that have limited or no development experience, which has allowed more partners that can provide affordable housing to enter the programme and which provides efficient ways of working together to increase the availability of affordable housing. Housing associations and councils have also partnered with developers, and the housing infrastructure fund has been used to unlock housing development in many parts of the country.

All of that is, of course, a testament to the hard work and determination that has been shown by the sector—in particular, by housing associations, whose role is pivotal to the achievement of our challenging target. Their role is not just about providing good-quality housing and services for tenants or building energy-efficient homes; it is about creating jobs, supporting vulnerable people and acting as anchors for some of the most deprived communities in Scotland.

The minister will remember attending with me an event with the Building Research Establishment at Ravenscraig, at which we were shown innovative specialist buildings for people with disabilities and dementia. Will he expand on those initiatives?

That was a very good visit, which showed what can be done to make a house dementia friendly. We must use what we learn from the BRE and other places, so that those technologies and knowledge go into homes. In that way, we can keep people at home and independent for longer—I am sure that all members across the chamber want to see that.

Although the bill is technical, it makes important changes that will enable us to continue to work towards our ambitious housing targets. After hearing today’s speeches, I am hopeful that the Parliament will pass the bill unanimously come decision time, and I hope that our next debate on housing is as consensual as this one has been.