This Bill proposes only the changes necessary to address the Government controls identified by ONS to allow the classification decision to be reviewed, whilst maintaining robust and effective regulation of RSLs. Since the reclassification of RSLs in Wales in September 2016, all political parties have agreed that we need to act to enable ONS to review the classification, and this is also being supported by stakeholders and the committees. The scrutiny of the Bill during Stage 1 committees has resulted in 19 recommendations. I will write to the Chair of each committee responding to the recommendations in due course, but I am pleased to outline my initial thoughts today.

I welcome the recommendation of the External Affairs and Additional Legislation Committee that this National Assembly support the general principles of the Bill. I accept the recommendation that the Welsh Government should seek clarification from the ONS on the position of councillors who are appointed to RSL boards in other capacities. I'll provide an update to the committee as soon as one is available, but the ONS has again confirmed that the Bill, if enacted as drafted, would allow them to reclassify the sector.

Tenants' rights and interests have rightly been central to the scrutiny process, and I would emphasise that tenants are at the heart of regulation and this Bill does not change that. Expectations on tenant consultation and the need for boards to take account of tenants' views are clearly set out in the regulatory framework and guidance. Following passage of the Bill, this guidance will be updated and issued as statutory guidance. Failure to follow statutory guidance could be reflected in the regulatory judgment and regulatory enforcement action considered. The regulatory expectations regarding consultation are explicit, as are the potential regulatory consequences if boards do not take their responsibilities to tenants seriously. I'm therefore not persuaded that there is a need to introduce any further measures on tenant consultation in this Bill, but will ensure that revised guidance reflects the importance of these issues.

The committee also recommends the Welsh Government brings forward an amendment to clarify that regulation powers in section 19 of the Bill are only to make consequential amendments. I accept this recommendation and we will develop an amendment with a view to indicating this more clearly.

The final recommendation from this committee is for the National Assembly, but if the Assembly decides to conduct post-legislative scrutiny of the Bill, the Welsh Government will, of course, wish to assist. Underlying this recommendation is the need to safeguard social housing assets and tenants' rights. These are key principles of regulation and I assure you that robust regulatory oversight will continue.

The recommendations from the Finance Committee relate to the implementation of the Bill and monitoring of the financial performance of RSLs as a result of diversification. I'm minded to accept these recommendations. My officials will be setting out the strategy to monitor financial performance and risk as a result of diversification in the forthcoming publication of the sector risk overview. I'm convinced sufficient resources are allocated for communicating the Bill and its purpose, but these matters are already under constant review. 

The Constitutional and Legislative Affairs Committee has recommended that I explain the reasons for introducing a Bill that amends existing UK legislation rather than one that is consolidated and free-standing. Whether to undertake consolidation will always need to be considered on a Bill-by-Bill basis, taking into account available resources and other factors such as time pressures. The committee asked whether we could have started working on this project in October 2015, when ONS decided that English housing associations should be reclassified. RSLs in Wales are governed by different legislation from those in England, and it was only after ONS published its review of RSLs in September 2016 that we could establish with ONS exactly what legislative changes were needed. 

The committee also suggests that we might have obtained a longer window for consultation, relying on the Treasury's assurance that they could extend their temporary disapplication of accounting controls beyond March 2018, providing we had made sufficient progress with our legislation. Consolidation would've slowed that progress considerably and it would have been inappropriate to gamble on the Treasury being prepared to grant an extension for this longer process. However, the Welsh Government continues to actively consider taking forward the consolidation of devolved Welsh law. I am minded to bring forward a Government amendment at Stage 2 to clarify the procedure for removing local authority appointees from RSL boards. And I look forward to continuing to debate the Bill, and I hope that this Assembly will support its general principles.