Item 9 on our agenda is a debate on the general principles of the Regulation of Registered Social Landlords (Wales) Bill, and I call on the Minister for Housing and Regeneration to move the motion—Rebecca Evans.

Motion NDM6655 Rebecca Evans

To propose that the National Assembly for Wales in accordance with Standing Order 26.11:

Agrees to the general principles of the Regulation of Registered Social Landlords (Wales) Bill.

Motion moved.

Thank you, Deputy Presiding Officer. I'd like to begin by thanking the Chairs and members of the External Affairs and Additional Legislation Committee, the Constitutional and Legislative Affairs Committee and the Finance Committee for their detailed scrutiny of the Bill throughout Stage 1. I'd also like to thank the stakeholders who provided written and oral evidence.

The Regulation of Registered Social Landlords (Wales) Bill introduces changes to legislation required following the Office for National Statistics's reclassification of RSLs as public non-financial corporations in September 2016. When Carl Sargeant introduced the Bill last October, he made it clear that there is a real need to reverse the reclassification of RSLs in order to safeguard the supply of good-quality, secure affordable homes in Wales. In taking Wales forward, the Welsh Government committed to work in partnership to deliver an extra 20,000 affordable homes in this term. RSLs have committed to deliver at least 12,500 of those homes and, in order to do this, they will need to borrow around £1 billion from the private sector to augment Welsh Government funding.

The decision to reclassify RSLs as public non-financial corporations effectively brings RSL private borrowing into the public accounts, meaning we would need either to increase Welsh Government spend on social housing by around £1 billion this Assembly term, with serious effects on our existing spending commitments, or accept that the programme would be reduced by around 5,000 homes, as RSLs would not be able to borrow to invest. 

The Llywydd took the Chair.

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.

I call on the Chair of the External Affairs and Additional Legislation Committee, David Rees.

Diolch, Llywydd. I am pleased to contribute to today's debate on the general principles of the Regulation of Registered Social Landlords (Wales) Bill on behalf of the External Affairs and Additional Legislation Committee. Before turning to the substantive issue at hand, I want to place on record my thanks to the sub-committee that was established for its work in gathering evidence as part of the Stage 1 process. In particular, I want to thank Eluned Morgan for chairing the early phase of the sub-committee's work before her appointment to the Welsh Government, to David Melding for representing the Welsh Conservatives during the evidence-gathering process and his thoughtful consideration of that evidence, and put on record the contribution of Steffan Lewis to the work.

Llywydd, the need for this legislation is clear; we don't challenge what the Minister has just said. It's imperative that we reverse the ONS reclassification decision and ensure that registered social landlords are considered private sector bodies for accounting purposes. Furthermore, we recognise the risks to an RSL's capacity to borrow money if reclassification does not take place. However, we are clear in our report that whilst this Bill is properly considered to be in the public interest, it should be considered as a move towards deregulation of the sector—we cannot ignore that fact—and one that will require diligent risk management and effective monitoring by the Welsh Government.

To inform our committee's recommendations and conclusions, we heard from key stakeholders involved in the sector and conducted a public consultation, and our report makes a total of six of the 19 recommendations that the Minister identified. We're very grateful to all those who contributed to our work.

Our first recommendation was a fairly simple one, and that's recommending the acceptance of the general principles of the Bill, because a failure to pass this legislation would mean, according to the Welsh Governments figures, over 5,000 fewer affordable homes during this Assembly term, and that's unacceptable.

Recommendation 2 looked at the issue of local authority influence on RSL boards, and we did hear conflicting messages from the ONS and from the Government as to the status of local councillors who sat as independent members of the board. I'm very pleased to hear the Minister say that she will accept this and clarify the situation in order to ensure that individuals who are there as individuals are not actually placed there as and considered to be representing local authorities.

During our work, we found that the regulatory framework would become even more important in terms of policing RSLs, if and when the legislative changes made by this Bill come into force. Whilst we welcome the review of the regulatory framework and the associated performance standards, we do recommend that the Bill is amended to ensure that the failure to comply with the regulatory framework is explicitly recognised on the face of the Bill as a failure to comply with a requirement under an enactment. I appreciate the Minister has stated that she thinks a regulation approach is best suited to this, but I want to stress that it would add weight if there was a duty to comply with those regulations.

Our fourth recommendation concerns the role of tenants on RSL boards. Whilst we recognise that the Bill is intended to be an absolute minimum of change to satisfy the issues relating to the ONS reclassification, we do believe that there is something of a missed opportunity to strengthen the role of tenants in the governance arrangements of registered social landlords. As a result, we do call upon the Welsh Government to actually do something about it and bring forward amendments to address this. Take the opportunity that this presents you with and strengthen the role of tenants before certain constitutional changes and mergers may be considered.

Turning to the regulation-making powers under section 18 of the Bill, we heard from stakeholders that there were concerns about the breadth of those powers. In oral evidence, the Minister recognised those concerns, but stressed that the powers in the Bill could only be used for consequential amendments. We took the view, in our recommendation 5, that the Welsh Government should clarify that the regulation-making powers in section 18 are to make consequential amendments only, and we welcome the acceptance of this recommendation by the Minister, as she just stated.

Our final and sixth recommendation actually, as the Minister pointed out, is not to the Welsh Government, but to this Assembly. Very often, we debate a Bill on policy, but today we are debating a Bill that has been introduced as a consequence of a decision by the ONS. We therefore need to look at the implications of that Bill upon policy and its delivery. Given the changes that are being brought about by this Bill, we feel we should be guarding against unforeseen and unintended consequences. Therefore, we've recommended that a committee of this Assembly undertakes post-legislative scrutiny of this Bill, should it become an Act. This is not something new, we've done it before with other Bills, and we think the post-legislative scrutiny should look at whether tenants' rights are being properly safeguarded, and should also ensure that land and assets are not being disposed of by RSLs in a way unanticipated by the Welsh Government, in other words, that the concerns we have raised do not come to life. We therefore ask the Welsh Assembly to actually take on that aspect.

Llywydd, to conclude, we believe the National Assembly should support this Bill, but those concerns that we have identified in our report, we believe, need to be addressed. I've heard the Minister's opening remarks, I also hope she has heard our concerns and our desires, not just through our report but through discussion this afternoon, so that the Welsh Government rethinks its position on some of those points and comes forward with amendments to strengthen the Bill, to strengthen the rights of tenants and give them a voice that we think they should have.

I call on the Chair of the Constitutional and Legislative Affairs Committee, Mick Antoniw.

Diolch, Llywydd. We reported on this Bill on 2 February and made 10 recommendations to the Minister. As part of our usual consideration, we looked at the balance between what is on the face of the Bill and what is left to be dealt with through subordinate legislation, and we were satisfied with the balance that had been struck. Specifically, the committee wished to commend the approach taken by Welsh Government in addressing the issue of local government control. It has been a long-standing view of this committee that for a law to be effective, the public must know what is expected of them, and the approach taken to address this issue through primary legislation rather than by regulations provides a welcome level of transparency. We hope the Minister and her colleagues will take a similar approach to future legislation.

So, now turning to the committee's specific observations on the Bill: sections 6 and 8 of the Bill amend the grounds upon which Welsh Ministers can appoint officers or a manager of an RSL to ensure compliance with a requirement imposed by, or under, an enactment. As currently drafted, it is possible that an RSL could be running adequately with an appointed officer or manager still in position. We therefore recommend that the Bill is amended to impose a time limit on any appointments made when the relevant requirement is complied with to the satisfaction of the Welsh Ministers. 

Schedule 2 to the Bill sets out the minor and consequential amendments that will need to be made to other legislation as the consequence of other provisions set out in this Bill. We welcome the Minister's commitment to reviewing all the provisions in the Bill related to the Abolition of the Right to Buy and Associated Rights (Wales) Act 2018 to ensure consistency with this legislation. We would expect the Minister to undertake this review at the earliest opportunity. For clarity purposes, we also recommend that Schedule 2 to the Bill is amended so that the precise definition of 'notify' is inserted into section 63 of the Housing Act 1996.

In relation to the powers in the Bill to make subordinate legislation, we looked closely at sections 5 and 14. These sections provide the Welsh Ministers with the power to issue directions to RSLs regarding the technical and practical aspects of any notifications issued by the RSLs to the Welsh Ministers in relation to constitutional and structural changes and certain disposals of land. As failure to comply would result in possible enforcement or penalty notice, we recommend that any such direction should be laid before the National Assembly within 14 days of it being given. Given the importance of these directions, and to aid transparency, we believe that this should also be accompanied by a written statement to explain the purpose of the directions.

The Minister will be aware that this committee takes a particular interest in Henry VIII powers, and we monitor the use of these provisions carefully. We therefore welcome section 18(4) of the Bill, which provides that where regulations amend primary legislation, they will be made subject to the affirmative procedure.

Also in relation to section 18, if the regulations, as stated by the Minister in her evidence to us, are to deal solely with consequential powers, we consider that the wording of section 18(1) of the Bill should be amended to provide only for what is needed. Recommendations 8 and 9 of our report seek to address this concern and ensure that the powers provided by the provisions in section 18 lapse once confirmation is received by the ONS that RSLs are reclassified as private non-financial corporations.

In considering Schedule 1 to the Bill, which introduces a new section 7C into the Housing Act 1996 to deal with local authority board membership, we do not see why an RSL must wait two months before removing an appointee from its board once it has been notified which appointees are to be removed. We consider this may cause unnecessary delay and uncertainty; we therefore recommend that the Minister amends section 7C(3) of Schedule 1 to be inserted into the Housing Act 1996 to address this issue.

We were particularly concerned with section 13 of the Bill, which repeals section 81 of the Housing Act 1988, which applies to England and Wales. To the best of our knowledge, section 81 of the Housing Act 1988 still contains references to England. Our report makes two recommendations to the Minister in order to clarify that section 13 of the Bill falls within legislative competence, by clearly stating that section 81 of the Housing Act 1988 is only repealed in relation to Wales.

In closing, there are a few comments I would like to make in respect of consolidating legislation in this area. We note the time constraints for producing this legislation and the clear need to satisfy the ONS. However, our assumption is that the Welsh Government had knowledge of the relevant issue to be addressed in 2015. Given the UK Government, acting for England, became aware of this issue at that time, this is highlighted in the Welsh Government's own consultation paper on the regulatory reform of registered social landlords. We have also noted the possibility of a potential extension of the derogation from HM Treasury, as referred to in evidence to the External Affairs and Additional Legislation Committee's sub-committee. I therefore invite the Minister to fully explain the reasons for introducing a Bill that amends existing UK legislation, rather than one that is consolidated and free-standing.

You will recall, Presiding Officer, that Carl Sargeant and I often clashed on the right to buy—and, it has to be said, on some other housing matters as well—but on this, we were in agreement. And can I welcome his son, Jack, to the Chamber this afternoon? Your father was held in great affection and respect on this side. He was a truly worthy and powerful opponent. I suppose I ought to offer you a slight apology, because my five hours on the phones—. They were Tory central office phones, Llywydd, before you think you have to send me to the standards committee. Anyway, my five hours on the phones urging people to vote for your opponent met with limited success, although I did find out that the Labour voters in Alyn and Deeside are amongst the most polite people in the electorate I've ever had the honour to converse with.

Despite the fact that I think this Bill will get unanimous support in the Assembly, both at this stage and at future stages, there were some areas, I think, when the committee looked at it, that caused some concern and require some further work or tweaking. I won't repeat the able presentation that the Chair of the committee, David Rees, has just made, but I do hope the Minister is going to listen to what is said in this debate and reflect on some of the reservations you've made in response to the report. Obviously, we welcome where you've indicated you're going to implement recommendations.

As the explanatory memorandum to this Bill states, the purpose of this legislation is, and I quote,

'to implement regulatory reforms removing central and local government controls allowing the ONS to review the classification of RSLs, which are currently determined to be public sector organisations for accounting purposes.'

Whilst it's unarguably in the public interest, given that judgment by the ONS, that we do meet the concerns, we should all recognise that this Bill is a significant act of deregulation within the sector and, consequently, as we identified in the sub-committee, it will require diligent risk management and effective monitoring, so that the interests of lenders and tenants, in particular, are properly protected. I very much welcome what David said about post-legislative scrutiny, and I hope that that will find support in the Commission as well. It may be important for us to take a second look at how this, should it become an Act, has been applied in practice.

I do think we need to state quite frankly that the National Assembly is the legislature here, and the ONS—. Obviously, their views are critical, but I'm slightly nervous when the Welsh Government says, 'Ah, the Bill, as currently presented, has already been passed by the ONS as fit for purpose', and 'Touch it at your peril' is, I think, the subliminal message. I've been quite disappointed, actually, with the committee's exchanges with ONS when we have indicated areas where we thought the Bill could be strengthened and asked whether they would give an opinion on some of these matters and they are reluctant to do so. But I do think they need to reflect on their procedures, and any other bodies in the future that interact with legislatures may bear this in mind, because we do have to take our law making very seriously, and we are the lawmaker in Wales.

That said, the issues that ONS raise are, basically, ones of international accountancy practice, and we cannot just ignore them, and I think that is the overriding judgment. But I do think that we should look at what they've done in England and in Scotland and compare the measures there to what we're proposing. And, in particular, I do favour the stronger voice for tenants that will be embedded in the Scottish legislation.

I don't think we need to say, as they do in Scotland, that it would be necessary for tenants to give their agreement to certain constitutional changes, but I do think it should be on the face of the Bill that tenants should be consulted. It's one thing for the Minister to say, 'Yes, well, we're going to deal with all that in regulations', but, Llywydd, what is more powerful than putting a statement like that on the face of our legislation and getting the vote in this Assembly to do it? It is the gold standard and I do urge the Minister to reflect on that. We have some, I think, room for manoeuvre, and it is our duty to try to improve and strengthen the Bill and, as I said, in particular, in reference to tenants.

I think David made the point about the regulatory framework very ably, and that is certainly something I shall be seeking to amend, if necessary, if the Government does not bring forward amendments of its own to ensure that failure under the framework is regarded as a failure of requirement under enactment. I think that is very, very assuring.

I do urge the Minister to be as flexible as possible. I think we got somewhere this afternoon with her response. It is reassuring that you're looking at the framework, and that is going to be brought up to date. And, of course, it will be working with this Bill to provide a proper regulatory framework, but I still think that there are some things in the interaction that need to be examined very, very carefully.

That said, I see I'm well out of time. I will be—

Well spotted.

I am likely to be making some amendments, basically reflecting what both committees have said, and I'm a member also of CLAC, but in no way will we—well, on this side of the house—put ourselves in a position where we're not able to make the necessary adjustments. Because any restriction on the borrowing capacity of housing associations would deliver a real blow to the targets we currently have for increasing affordable housing. So, we will work very constructively to ensure this Bill is a success, and I urge everyone to accept it at this stage as a principle we should support. Thank you.

Plaid Cymru supports this motion today, as we do accept that there are pragmatic reasons as well as sound budgetary reasons for this legislation. The categorisation of housing associations as public corporations means that they will be treated like public bodies in terms of their accounts, and that, of course, has major implications as borrowing of the housing associations will be counted against the financial ceiling of the Welsh Government. And, in turn, that could have a detrimental impact on the ability of the sector to build houses at the very time when there is a great shortage of social housing, creating a real crisis in many parts of Wales. But—and there is a 'but', and a relatively important 'but' this afternoon—I do have some concerns that deregulation, and this is what we’re talking about, deregulation, could lead to some unanticipated outcomes and outcomes that could militate against some of the core principles of housing associations as they currently stand. It’s important to bear in mind that housing associations are not a private sector vehicle for generating profits, but a structure to provide services for our most vulnerable people.

We have heard today from both the committees—well, we’ve heard from one of the committees and we’ll hear from the other later on—who have had an opportunity to scrutinise the general principles before us today. But my question is that I wonder whether that scrutiny has been too narrow and limited in its scope, bearing in mind that they covered constitutional and financial issues mainly. Now, I believe that we need to take a broader view in order to assuage some of the concerns that I have. I would like to see the Equality, Local Government and Communities Committee having an opportunity to scrutinise this issue—not the Bill itself, but to scrutinise what these changes in the light of deregulation could mean for the future of the social housing sector in Wales.

There are some questions that we need to seek solutions or answers to. Would deregulation mean a change of strategic priorities for housing associations? Would it mean a greater emphasis on generating profits, and would that mean, for example, that rural areas would lose out? Because we all know that it is cheaper to build large estates in urban areas than it is to build clusters of homes in rural areas, but that sort of development is much needed in our rural areas. Are we going to see less building in rural areas, consequently leading to depopulation and the decline of the Welsh language?

We’ve spoken here about another concern already, which is the loss of accountability and democracy. We talked about the tenant’s voice, but the voice of councillors can be clearly heard in management boards at the moment. Now, with the reduction in the percentage, then those voices, the voices of councillors and tenants, may be diluted and, in turn, lead to less accountability, and that brings us back to this idea that management boards could change strategic direction, contrary to what we’re trying to achieve in this area.

We must bear in mind that the housing stock has been transferred from the hands of local authorities to housing associations in many areas of Wales. One could argue that that move has led to a decline in accountability already. There is concern that the next step that this Bill will lead to could lead to the loss of even greater accountability and to that change of strategic direction that I’ve mentioned, which could militate against the whole purpose of housing associations.

So, I do feel that we must move very carefully from this point, securing amendments that will secure the democratic voice, but also safeguard the core purpose of housing associations: for me, building the right kind of homes for the people who need them—yes, that—but also building them in those places where they are required, not where the market drives those developments. So, we need to be very aware of the risks of deregulation and consider what steps need to be taken to resolve some of the concerns that I’ve raised today. I would suggest that the Equality, Local Government and Communities Committee could make a contribution to that discussion. Thank you.

Thanks to the Minister for bringing forward today's debate on the Regulation of Registered Social Landlords (Wales) Bill. We agree with the need to reclassify RSLs, and we therefore support today's motion. We do need to do this because we need to protect the provision of affordable housing. Wales is simply not building enough homes. We know that the Welsh Government has set a target of building 20,000 affordable new homes in this Assembly term, with 12,500 of them to be built by RSLs. However, there is also research, notably by the late Dr Alan Holmans, which suggests that Wales could need as many as 12,000 new homes each year. This is largely due to an expected increase in the number of single-person households. So, we are facing problems to come in meeting demand for housing, and particularly affordable housing.

When we debated previous legislation from the Welsh Government, which was the abolition of the right to buy, we talked about that in the UKIP group and came to our own conclusion that we thought it was a bit of a sticking plaster, because of the relatively small numbers of social properties that were ending up in the private sector as a result of the right to buy. But if that Bill was a sticking plaster then this Bill is perhaps more of a tourniquet, because the risk to funding for affordable social housing is very grave. If we don’t act, there would be serious funding consequences, as has been outlined by previous contributors today, and the delivery of new homes in the sorts of numbers that Wales needs would simply not be possible.

We will, of course, look forward to scrutiny of the Bill at committee stage and, as others have stated, it’s important that the Welsh Government works closely with the ONS to ensure that the technical details really do support the aims of the legislation, which is to ensure that housing association debt is taken off the public sector borrowing figures.

I note that, following the passage of equivalent regulations in England, the ONS has now completed an assessment of the housing association sector there, and the result has been that the situation has been reversed, with registered providers of social housing in England reclassified as private market producers. And, of course, that is—. That could be moving towards providing greater stability to the housing market, which is what we want to achieve here in Wales.

The Bill does possibly allow the Welsh Government to act if it feels that a housing association is not acting in compliance with the law—this is dealing with the issue of deregulation, which many have mentioned. But I think that it’s important that tenants continue to have a say in how a housing association is run. Of course, many have raised the issue of the tenant's voice today, and David Melding has made a strong case for it to be included on the face of the Bill, which we would certainly consider, and we may well end up supporting any amendment that he might bring forward to that end if the Welsh Government don’t take his advice, but the Welsh Government doing that would be the best course, perhaps.

The changes will be of particular importance to tenants who may be affected by stock transfers from local authorities to RSLs. I’m hopeful that we could explore this through committee scrutiny, but it would be interesting if the Minister could add anything to that today.

We’re also interested in the way in which housing associations will continue to be funded in future and we still, of course, need to find new and innovative finance models to continue to provide the flow of affordable housing.

So, in conclusion, Llywydd, we in UKIP do support the general principles of the Bill. We feel that this is the right course of action, although we must bear in mind that this in itself will not solve the looming housing shortage. We look forward to continuing to hear what the Government has to say about this and to, perhaps, scrutinising if it comes to the local government committee, or in any other relevant committee, their future plans to deliver the housing that Wales so desperately needs. Diolch yn fawr iawn.

I call on the Minister for Housing and Regeneration to reply to the debate.

Thank you. I'd very much like to thank all Members who have participated in the debate today, and, as I said at the start of my contribution, in terms of the scrutiny of the Bill thus far, I think that engagement has been very, very constructive indeed. I think it's useful, perhaps, if I just set out some thoughts on what this Bill isn't about. There is nothing in this Bill that would, for example, take away from the core aims of RSLs in terms of their job of providing affordable, good quality housing for the people who need it most. In fact, they are very much committed to that agenda and recently published a plan looking forward as far as 2035 in terms of setting out how they will continue to go about doing that, but doing it in a way that moves towards a zero-carbon agenda, that seeks to maintain as much of the value of the investment here in Wales, and which also focuses on that provision of quality and always driving up quality.

There's nothing in the Bill, also, that diminishes the robustness of the regulatory regime that we have in Wales, and it doesn't affect any of the fundamental commitments, either, that were made to tenants at the point of transfer. So, the large-scale voluntary transfer RSLs, for example, will still have to deliver on and maintain the Welsh quality housing standard. So, there are many kinds of issues that have been looked at through the passage of the Bill to this point, but there are some fundamentals that don't change as a result of this Bill, which, as we've discussed, is quite limited in its scope and purpose.

David Melding—

Will you take an intervention?

Yes, absolutely.

Although you say it's not in the Bill, what about the unintended consequences that I raised, not necessarily in the legislation itself, but the knock-on effects?

Through the judgments and the standards that our registered social landlords have to adhere to in Wales, they're very clear on their purpose in terms of maintaining a strong focus on provision of social housing for the people who need it most—quality social housing. Also, through our framework of regulation, we have the opportunity to explore to what extent RSLs are investing their efforts and their resources in business that we would consider not to be core business. Those would be discussions that we would be having at a very early stage with RSLs, should they come to a level that was of concern to us.

I would also say that David Melding is quite right in the sense that the discussions that we've also had with the Office for National Statistics in terms of them not being prepared to enter into a running commentary kind of dialogue with us in terms of the ideas and concerns and so on that have been brought forward—. However, that doesn't include that issue of the clarity on the role, or the status, I should say, of local authority councillors on the board, which we are still seeking to come to some clarity on with the ONS, and, as soon as we have that clarity, we will be sharing it with the committees.

I do want to turn to the issue of tenants, and tenants' rights and tenants' engagement and voice, because this is something that has clearly been of concern to committee members, both in the debate today and to others throughout the passage of the Bill to this point. I think it's worth reflecting on the evidence given during the scrutiny process by the chair of Community Housing Cymru, who said,

'I think the real damage to tenants, to be quite honest, would be if we don't get this Bill through to enable us to be reclassified', and I know that CHC today has e-mailed all Assembly Members with an in-depth briefing, noting the concerns that the committee does have in relation to the role of tenants in certain constitutional changes and agreeing that tenants have a vital role to play in scrutinising the landlords. As independent businesses, housing associations have a variety of ways in which they involve tenants in scrutiny and governance processes, they tell us, and are continually working to improve in this area. But CHC today have been really clear that they believe that improvements in this area do not require amendments to the legislation, and can be achieved through the co-development of statutory guidance between Welsh Government, the housing association sector and tenant bodies that ensures tenants are included in decisions or constitutional changes. That's very much the way in which I would—[Interruption.]

I'm not sure who was standing first. I think it was Mark first.

It's for you to decide, I think, who—

It was Mark first.

Thank you. My 12 years as a voluntary, unpaid housing association board member taught me that a well-run association, a non-profit association, can be the most effective vehicle for delivering social housing and tenant empowerment. Do you recognise what we learnt—that top-down tenant engagement, top-down consultation, was ineffective, whereas getting down, bottom-up, engaging with tenants, getting to know tenants, listening to tenants was the way to actually drive effective engagement to ensure that tenants' views were heard and acted upon?

I completely agree that full and genuine engagement with tenants at the earliest point possible is really vital, and this is one of the reasons that I am pleased that the regulatory board for Wales has decided to commission a review of tenant engagement in Wales, and that will aim then to set out a vision for tenant involvement for the future seeking to understand what tenants are looking for from their RSLs in terms of involvement and engagement. This review, I understand, is likely to start in April, and I know that the regulatory board for Wales would very much welcome the engagement and involvement of Assembly Members in that process. I know that Assembly Members will have views based on their local experiences in terms of the quality and the timeliness of tenant engagement, and I'm sure that your views, along with others, would be very welcome in that process.

Thank you for giving way. As well as the scrutiny process for the Bill, the Public Accounts Committee has held a long inquiry into housing associations in Wales. On this point, we found that in exchange for the extra freedom that they were getting through this measure comes a responsibility on the housing associations themselves to proactively encourage scrutiny from their tenants. So, can she assure us that, as the statutory guidelines are developed, that that onus is put on housing associations to raise the bar?

I'll certainly look at that issue in terms of how we can encourage, through guidance, which will become statutory, the importance of ensuring that tenants are skilled and equipped and confident to be challenging board members. I'm very keen that, in all circumstances, board members understand that their role is very much there as a role of challenging and scrutiny, and they should always be enabled to have those skills in order to undertake that kind of role in a robust and thorough manner. 

I'd also add that one of the performance standards that RSLs have to adhere to specifically compels them to demonstrate effective and appropriate tenant involvement and high-quality and improving services for tenants. TPAS Cymru, through hearing the tenants' voice in the regulation of housing associations in Wales, does gather views and concerns from tenants across Wales on behalf of the Welsh Government, and the information that TPAS then provides Welsh Government does give us a kind of sense check in terms of what RSLs are telling us about how they involve tenants and take their views into account.

TPAS Cymru, when giving evidence, said,

'I think one of the risks here is about the need to make sure that tenants are involved and that their voices are heard throughout the process in terms of how organisations are operating, and that's one of the new regulatory standards. Tenants are now expected to be part of the structural planning of a housing association.' 

They think that that is very much something to be welcomed, as I do. So, undoubtedly, there will be points of detail that we will need to consider in more depth as we move to Stage 2 of the process, but today I would ask Members to approve the motion.

The proposal is to agree the motion. Does any Member object? The motion is therefore agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.