Mr. Damian Allen:

I thank the Chairman and members for the opportunity to discuss with them today the proposed housing (regulation of approved housing bodies) Bill. Before outlining the main provisions of the Bill, I will provide some brief background and context to the proposed legislation.

Approved housing bodies, AHBs, are not-for-profit housing organisations formed for the purpose of relieving housing need and the provision and management of housing. AHBs consist mainly of voluntary or co-operative organisations registered under the Companies Acts, societies registered under the Industrial and Provident Societies Acts and-or trusts incorporated under the Charities Acts. At present, there are 536 approved housing bodies and the sector is largely reliant on a mix of fragmented regulation under various legal instruments, including the Companies Act, the Charities Act and the Industrial and Provident Societies Acts. The sector has grown over the past 20 years but largely in a low-risk environment where the State has provided high level capital funding at 95% or 100%.

More recently, the sector has had to rely less on such grants and more on current funding, that is to say, borrowing, to develop social housing.

Approved housing bodies, AHBs, have a key role in the delivery of social housing, as recognised and set out in Social Housing Strategy 2020. In this context, the need for regulation becomes more pressing to underpin stability in the sector, to better protect tenants and to provide reassurance to potential investors. At present a system of voluntary regulation is in place. A voluntary code, Building for the Future, was published in July 2013. In February 2014 an interim regulation committee was established as an independent committee working within the Housing Agency. A dedicated regulation office is established in the agency as well and I understand the committee heard from representatives of the regulation office last week. The regulation committee includes experts on housing, finance, regulation and law. Encouragingly, the number of AHBs that have now signed up to the voluntary code - some 210 at the last count - represents approximately 82% of all housing stock held by such bodies.

All the relevant people in AHBs who sign up to the code are expected to submit a signed charter of commitments and make themselves available for interview, if necessary, and for assessment. In July 2015, the Housing Agency published the financial standard and assessment framework, a further development of the voluntary code, as well as its first annual report.

In the programme for Government, a commitment was given to facilitate larger housing associations to access private sector funding for social housing. More recently, Construction 2020 and Social Housing Strategy 2020, to which I referred earlier, affirmed the central role in which approved housing bodies have been placed for the provision of social housing. The strategy includes a specific commitment to establish a statute-based regulator for the sector. This was first signalled in the voluntary code.

The interests of the tenant are very much to the fore in the development of regulation as well. This priority is explicit in the regulator's oversight role of the performance of AHBs in respect of landlord functions but it is also implicit in the regulator's focus on financial feasibility and the good governance of AHBs. These functions underpin stability and security for all parties concerned. Against this background, the Government approved the general scheme of the Bill in September. The purpose of the proposed legislation is to: safeguard public and private investment in AHBs and the associated assets developed; provide the necessary legal arrangements for the oversight of AHBs in respect of their governance, financial feasibility and performance as landlords; protect the interest of tenants and other stakeholders through the regulation of AHBs in their provision of housing-related services; and give assurance to investors that the AHB sector is well governed in Ireland.

I will conclude with an overview of the main provisions. The first is the creation of an independent regulator. The regulator will be responsible for establishing and maintaining a register of AHBs and for granting or refusing approval to applicant bodies for approved status. The regulator will also set, monitor and assess standards. The regulator will set and publish standards and then assess the AHBs against those standards in respect of their performance generally.

The Bill will provide for a suite of enabling powers to allow the regulator to make inquiries in respect of AHBs, carry out investigations, if necessary, issue guidance and make assessments regarding the performance of approved housing bodies. The Bill also gives certain intervention powers that will allow the regulator to intervene in many different ways according to the risk identified. The Bill also provides for AHBs to adhere to certain obligations under the regulatory framework, including, for example, the submission of information to the regulator and notification to the regulator of any change to articles of association or memoranda.

The Bill is complex. It includes many provisions that will require careful legal scrutiny in the course of drafting. As the drafting of the Bill proceeds, I expect the proposals to be refined. The Minister will of course consider any views of the committee arising from its consideration of the Bill.