Eoin Ó Broin (Dublin Mid West, Sinn Fein) | Oireachtas source

Sinn Féin supports the principle of regulation for the social housing sector in total. We have long argued for a regulator for social housing. While this is a technical Bill, it is a very important one with a lot of significant detail. The principles on which such regulation needs to be based are important. They need to be robust so that there is a strong regulatory regime and they need to be fair to all of the participants in that regime, including landlords, tenants and the taxpayer. Crucially, this regulation is about assisting the AHB sector to grow, thrive and to do what it is meant to do. It is important legislation and like many similar Bills, given its technical nature, it will probably not be subject to the level of scrutiny it deserves in light of what it has the potential to do if we get it right.

I want to put on record our concern that once again the local authority sector is being exempted from these regulations. I have argued for a long time that it makes no sense to have two different types of social housing provider. Both the providers and the tenants are subject to completely different regulatory regimes. In fact, because of the significant advances represented by the Residential Tenancies Acts, the RTB, and now some of the provisions of this Bill, the situation for AHB landlords and their tenants is far better than in for the local authority sector, particularly for tenants, where regulation, protection, accountability and transparency are concerned. We know why that is. If local authority tenants were given access to the RTB tomorrow, the queue of tenants looking for substantial improvements to the poor quality of their accommodation caused by lack of investment in the stock would be simply unsustainable for Government. However, at some point we have to have a conversation about ensuring that all social landlords and all social housing tenants are captured under one Bill.

We have a slight technical difficulty with the current Joint Committee on Housing, Planning and Local Government because the heads of this Bill were introduced during the previous Dáil. None of the members of the current committee, therefore, was present for the pre-legislative scrutiny of the Bill. That is nobody's fault, but it is unfortunately the way things have gone. Given the importance of the legislation, it is important for the committee members to hear from AHBs, the County and City Management Association and the interim regulator. We on the committee are exploring ways to facilitate a presentation by these stakeholders without delaying the Bill. We are not looking to delay it, but in private session later this week I will argue that we should find a mechanism to allow the committee to be brought up to speed with what our predecessors in the previous Dáil had the advantage of doing.

It is also important to remember that the context is very different from 2015. We have a completely different housing policy and regardless of one's support or criticism of that, it is a completely different policy context. The funding context is also different. Crucially, the reclassification of AHBs so that their funding is on the Government's balance sheet is a fundamental change to the configuration, the work and the regulation. One of the fundamental concerns of both EUROSTAT and the Central Statistics Office, CSO, is the level of Government control of the sector, concerning not just financing but also governance and policy. Although pre-legislative scrutiny happened in 2015, there is a value to updating that in the current context. It is relevant to the sections of the Bill I will address shortly.

That is specifically the case with reclassification. Officials from the Departments of Housing, Planning and Local Government and Finance will appear before the committee on Thursday to discuss this. There is a genuine concern, which is directly relevant to the provisions of this Bill and whether they are worthy of support. Many of us have the impression that there is not enough urgency in the Government's response to that issue and its efforts to get the AHB sector back off-balance sheet in a way that maintains the voluntary not-for-profit ethos.

This is not some technical concern. The additional fiscal space that any Government would have if that sector was brought back off-balance sheet is in the order of several hundred million euro. The total current and capital expenditure on AHBs may be in the region of €600 million. When the fiscal rules are applied, it could be €100 million, €200 million or €250 million. Given that the Government has only €700 million of fiscal space for additional spending next year, an extra €200 million would be significant for any Government. We need to examine that

Central to the relevance of reclassification to this Bill is the issue of control and independence. Is the Government increasing its power and control over the sector or creating truly independent mechanisms to ensure good quality regulation in the interest of all?

The comments I am going to make are friendly. They are made in the context of wanting to support this Bill. I have some observations on some sections that I would like Mr. Paul Lemass and his team to consider. Some questions need to be addressed and may even require amendments, preferably from the Government on Report Stage if it is willing to work with us. I am keen to hear both the Minister of State's response and any subsequent response from the officials.

I will go through the sections and the key issues of concern. The first is the appointment of the regulator itself, which is provided for in the Schedule. The idea that the regulator and a board of five to eleven people would simply be appointed by the Minister is a mistake. Irrespective of whether the board's membership is determined by competence or some representative function, using the public appointments process would be a much better way of doing it. The Minister's approval would still be needed. It makes no sense that the chief executive would be appointed through the public appointments process but the board itself would not. I urge the Minister of State to look at that.

There is also the issue of whether the board should be competency-based or representative. My preference is for it to be competency-based. That would mean we would need some people on the board with intimate knowledge of the AHB sector, who preferably would not be currently working in the sector but would know its mechanics and its details. That should be considered.

I am genuinely concerned by the definitions of standards and the outline of strategy contained in sections 38 and 21. The Bill gives the board the power to develop the strategy and standards but it ultimately comes back to the Minister for approval. It is almost like the argument we had over the planning regulator; ultimately the key decisions have to be referred back to the Minister for his or her consent. That is a bad way to establish independent regulators. I am also concerned that it may fall foul of the CSO and EUROSTAT when it comes to the redesignation. That has to be looked at very clearly.

I refer to the provisions on standards in section 38. In some respects this does to the heart of the regulator. These are the key rules to which the regulator will be trying to ensure the AHB sector adheres. When there are investigations or interventions, as we will discuss shortly, in many cases they will arise from the regulator's view that a body may not be compliant with them. The standards deal with governance, financial management and property management, which is fine. There are no queries or quibbles with this. However, the section also refers to tenancy management. Later in the section, nominations and allocations are mentioned. Those are not governance or financial management issues. They are issues of policy, which is ultimately set by the Department and the local government sector. I was very surprised to see those within the standards and functions of the regulator. There is an issue in respect of how this will relate to the policymaking function of the Department and the implementation and current regulatory function of the local authorities or the RTB. I urge the Minister of State and his team to examine that.

On a slightly less significant point, the idea of a strategy, as referred to in section 21, is probably a little too grandiose. This is an operational plan for how to implement the work. The term "strategy" makes it sound like a much bigger organisation with a policy vision and a mission, and that is not my view of what a regulator should do. That is the responsibility of the Minister and his Department in the first instance, as well as the Oireachtas.

Section 11 concerns fees. The Minister of State will know that I took the Government's side against pretty much everybody else in the Opposition on levying fees on the AHB sector at reduced rates for registration of tenancies with the RTB. I did that because approved housing bodies will access the RTB for services such as mediation and adjudication and it is right and proper for them to make a contribution towards those. I am not against the charging of fees where it is appropriate.

I do not see the rationale for charging fees under this legislation. The Charities Regulator, for example, does not charge fees because it does not provide charities with the service RTB, provides for landlords and tenants in mediation or adjudication. It is also not clear how the fees will be set. They may be set so low as to make a minimal contribution to the financing of the regulator. In that case, why bother? The other possibility is that the fees will be set so high, in an effort to recover costs, that they could be prohibitively excessive. The approved housing body sector already has significant cash flow issues on development projects, as the Department knows well. In that context, this section should simply be removed. That is not my position because I do not want AHBs to have to pay. I just do not see for what the Minster is asking them to pay. This is a function of the Government, not the AHBs.

I make the same point about section 46 which deals with inspectors. Would it not be better if the Public Appointments Service was involved in this process? If I understand the section correctly, the regulator can simply appoint the inspectors. As we have a good Public Appointments Service, let us use it. There could be a shortlisting of candidates and the regulator could then make the final decisions. If we want to make sure inspectors have the greatest possible experience and competence, a more rigorous process is needed.

Section 47 is very important. We need good quality, robust investigations. That is the core of any strong regulatory regime. We have to strike a balance between the powers given and due process. However, the balance in a couple of areas might be tipping towards strong powers to the detriment of due process. The Minister should look at this issue. Some of the language used is also vague. For example, there is mention of "if the regulator considers it necessary", "considers it appropriate" and "for the purposes of the performance of its functions". These are either vague or have low thresholds for what could be significant interventions. Having looked briefly at other regulatory regimes, a regulator should need to have a reasonable suspicion that something is not being done right in order to intervene. There should be a suspicion that something is not being done about standards. Not adhering to or not implementing standards should clearly be grounds for action. The Minister needs to look at that issue again.

One of the areas with the greatest weaknesses is the transfer of stocks which is covered in section 54. I understand this well. There may a case to have an AHB, perhaps a smaller body, overseeing a small number of units, with older trustees who are no longer in a position to be involved. There might be a maintenance or standards issue. I accept that an application to the High Court is the right way to deal with that issue. However, who decides where the stock is going to go? All the Bill states is that it will be up to the regulator. Who will cover the costs if, for example, the buildings are in poor condition and there is no sinking fund? The regulator might want them to go to another approved housing body or a local authority. Will the approved housing body or local authority accept the transfer if they are not being compensated for having to deal with the associated issues? When we were regulating the credit union sector, there was a comparable issue about credit unions in difficulty. That legislation included a resolution process. There was a clear mechanism whereby a transparent process would be put in place in a case where an entity failed or was perceived to be failing. It would also have a fund available to ensure stock could be transferred where an approved housing body was no longer able to do its job properly or was not doing its job properly. In the case of credit unions, mergers can be negotiated and a fund is available.

There is also an issue with private property rights. The mortgages might almost be paid on some of the stock. We are not talking about approved housing bodies such as Clúid or Clanmil but about small, local approved housing bodies that were sometimes set up in the 1960s. If those bodies now own properties outright, is the Minister guaranteeing that the Attorney General has stated there are no constitutional issues? I am referring to a High Court order for the transfer to another entity of what is now private property, on which the State no longer has a charge. I am not objecting to stock being transferred, if there is a reason for it. However, if we are going to insert this type of mechanism, it has to be really watertight and able to fulfil its function.

Co-operation with other operators, as dealt with in section 24, is very sensible. I do not understand, however, why Tusla and the Property Services Regulatory Authority are not listed. They seem to be two of the most obvious bodies to include. I know that the section states "and other regulators", but given that some of the other obvious bodies are named such as the Residential Tenancies Board, these two should be included also. That is particularly the case because there is going to be potential for a regulatory conflict. I mentioned my concerns about having tenancy management included in the standards. Strictly speaking, tenancy management is something with which the RTB deals for tenants who state tenancy management is not being carried out properly by a landlord. Who should have responsibility for what in such cases? A little thought is needed on how co-operation is mediated and who decides the outcome if there is a conflict over whose piece of regulatory turf encompasses an incident and how it is to be dealt with.

I will mention some small issues before I conclude. They are more for discussion on Committee Stage. I refer to notifiable events which are included in a later part of the Bill. It is a sensible inclusion. Every order from the RTB pertaining to an AHB is to be a notifiable event. That will be a major bureaucratic difficulty for the approved housing body. Somebody will also be needed in the regulator's office to do nothing other than read RTB determinations from AHBs when it might not necessarily need to be the case. I would have thought, in fact, that in the section dealing with co-operation with other regulators a mechanism would be found to agree to a protocol for such cases. If the RTB finds that approved housing body "X" has a repeated history of not maintaining its stock properly, it could red flag it and consider whether it might be a regulatory or a financial management issue and if it might be time for notification to be given to the regulator of the approved housing bodies. There could be a more effective way that would save time for the approved housing body and the regulator and also have more utility.

It is the same point in the case of the appeals panel. The Minister should look at involving the Public Appointments Service. These appeals are important and significant. They are often technical issues which involve financial management, property management or appropriate governance. For all of the reasons I outlined previously, the public appointments process is the right one.

On the publication of interim reports, I am all for transparency and full publication. If I understand the section correctly, however, the Minister is talking about publishing interim reports before the approved housing body will have had an opportunity to read and respond to them. That seems to involve a lack of due process. I am not arguing against publication, but the approved housing bodies should have the right to read and respond to reports. That would ordinarily be the case in other circumstances.

I will conclude by restating our sympathetic approach to the Bill. We want to see good quality, robust regulation of the sector. Notwithstanding the significant work Mr. Paul Lemass and his team have put into the Bill, we need to see some Government or Opposition amendments accepted on Committee and Report Stages. The key issue is what is the Government's vision for the approved housing body sector? How does this legislation assist us in delivering on that vision? How will the capacity of the sector be assisted to meet these standards, particularly in the case of those bodies which are smaller and more local?

I have some key questions for the Minister. He might respond in making his concluding remarks or perhaps at the housing committee. In his view and that of the Department, what will be the impact of the Bill on the attempt to get the AHBs off the Government's balance sheet in the context of reclassification? Have the CSO and the Department of Finance been consulted? They are key bodies and their views are of major importance. I understand a regulatory impact assessment was made back in 2014 or 2015 before I was a Member of the Oireachtas. Has an updated regulatory impact assessment been made at a previous stage? If not, is it something that could be done, even after the passage of the Bill? There is a fair lead-in time in the enactment of the legislation. It could be very helpful in making sure it is implemented properly.

Why is the regulator not being given more independence? Why is every key decision being referred back to the Minister for consent? The Government should set policy. That is the job of the Government and the Oireachtas. The job of a regulator is to make sure the agents of the State tasked with implementing Government policy do what the law states they are meant to do. The regulator should not need to come back as often to the Government or the Minister. The regulator's role should be to ensure the policies and decisions made in this House are implemented.

My final point concerns a conversation about applying the same rights, entitlements, regulations and transparency and accountability to local authorities and their tenants as we do to the approved housing body sector. I knew that it would not be included in the Bill. I would like to hear from the Government if it is on the horizon, being discussed or something to which we can return at a later stage? I ask because if we want a strong, robust social housing sector that will meet the needs of the 20% to 25% of the population who should be in it, everybody providing that accommodation and living in it should be subject to the same rules and regulations and have the same rights and protections. It is a missed opportunity that there has not been a move in that direction in the Bill. If the Minister wishes to move in that direction in the future, we will work co-operatively with him.

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