UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 186

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

WELSH AFFAIRS COMMITTEE

PROPOSED NATIONAL ASSEMBLY FOR WALES (LEGISLATIVE COMPETENCE) (HOUSING AND LOCAL GOVERNMENT) ORDER 2010

Tuesday 15 December 2009

MS JOCELYN DAVIES AM, MR NEIL BUFFIN and MR CERI BREEZE

Evidence heard in Public Questions 1 - 51

USE OF THE TRANSCRIPT

Oral Evidence

Taken before the Welsh Affairs Committee

on Tuesday 15 December 2009

Members present

Dr Hywel Francis, in the Chair

Mr David Jones

Hywel Williams

Mark Williams

________________

Witnesses: Ms Jocelyn Davies AM, Deputy Minister for Housing, Mr Neil Buffin, Senior Lawyer, and Mr Ceri Breeze, Head of Housing, Welsh Assembly Government, gave evidence.

Q1 Chairman: Good afternoon. Welcome to the Welsh Affairs Committee to deal with this Legislative Competence Order (Housing and Local Government) Order 2010. Minister, could you introduce yourself and your colleagues, please?

Ms Davies: I am Jocelyn Davies, the Deputy Minister with responsibility for housing and regeneration. This is Neil Buffin and this is Ceri Breeze.

Q2 Chairman: Thank you for that. The acoustics in this room are not good, so do not be afraid to raise your voice; we will not be offended. I understand you would like to make a very brief statement, and we would welcome that.

Ms Davies: Thank you very much. I have prepared some introductory remarks and I would like to begin by thanking you very much for this opportunity to appear before you with this latest Legislative Competence Order on housing. Chairman, you will recall the last time I came Members commented on the content of the Explanatory Memorandum, and I was grateful for that, your report certainly challenged whether it made a convincing case for the Order. That was very helpful. You will have noticed that as a result the current Explanatory Memorandum now lays out the legislative framework we operate within and the policy work that has been carried out in this area since 2007. Housing has become a priority for the Welsh Assembly Government. We have a very challenging target of 6,500 more affordable homes over the term of the Government. This has become even more challenging since the downturn in the economy. We have made significantly more resources available as an anti-recession measure. I am sure Members will be interested that in 2008 the Essex Review of Affordable Housing reported with 43 recommendations and strongly supported the view that we change the approach to housing by adopting a co-production method of policy development and delivery. We have done that and are working with the housing sector in Wales as equal partners to implement those recommendations and in developing the new housing strategy, the Supporting People strategy and our homelessness plan. We have also commissioned external independent experts to review the housing revenue accounts system, to review rents and the Supporting People programme. Members will recall that I did say when we had the policy more well-developed we might well return with a broader bid for powers and this Legislative Competence Order is built on that body of policy work and would enable the Welsh Assembly Government to propose strategic legislation in line with our policy direction and, of course, responds to the challenges for social housing and meeting the needs of vulnerable people. I present the Order to you, thank you for this opportunity again. I am very happy to take questions.

Q3 Chairman: Thank you for that statement. We are particularly grateful for the very positive comments you made about our role last year. Our role was not universally recognised then but we certainly appreciate your warm words today acknowledging that work. You may well have answered this question, but could I begin by referring to your statement in the National Assembly recently when you presented the proposed Order and described it as an "ambitious housing LCO". Could you explain to us why you think it is ambitious? Is it because of the scope of the powers it devolves or is it intended to pave the way to an ambitious strategy for housing in a specifically Welsh context, or is it both?

Ms Davies: Members will know that we have our new housing strategy, and I gave you some background just now about the way that we developed that housing strategy in partnership with the housing world in Wales that delivers on these issues for us. I mentioned the Essex Review and the 43 recommendations that it made. One of the important things it says is that you need to get the right sort of houses in the right places, and that is what we intend to do. Our national strategy envisages better services, an appropriate regulation of housing associations, reducing the ecological footprint, strengthening communities and, most importantly, delivering together. You will see from the range of things that we have included, the Matters that we have included, all these things are interrelated, linked together, so it is the delivery of our new strategies and in relation to the homelessness plan and the Supporting People strategy that is the most important. It is ambitious because we have taken a different direction in Wales and with this new approach that we have developed through the Essex Review we have immense goodwill in the housing world in Wales and our partners want to deliver for us.

Q4 Mr Jones: Good afternoon, Ms Davies. Before I ask the question I was about to ask, can you confirm for the record that the Welsh Assembly Government is not now pursuing the earlier Housing LCO?

Ms Davies: Yes, that is correct.

Q5 Mr Jones: That is completely abandoned?

Ms Davies: Yes.

Q6 Mr Jones: That was not clear to us before this afternoon.

Ms Davies: I am sorry.

Q7 Mr Jones: What do you think are the most important differences in the outcomes which need to be achieved in housing policy between that in Wales and in England?

Ms Davies: I do not follow closely the policy in England, I have got to be perfectly honest with you there. Very often people will say that in rural areas in Wales house prices are extremely high and wages are very low, but there are issues in relation to urban Wales as well where there is a great deal of unemployment, a reliance on the social rented sector and, of course, low wages. We have all round challenges, I think, and the stock that we have is quite old, it can be in very poor condition in some places, and there is an awful lot more stock in private ownership than perhaps you would see elsewhere. There has been a tradition of owner-occupation and the stock is not all that well maintained. We do have differences, but I would not say I avidly follow the housing policy in England. We have a different way of developing policy in Wales. We work very closely with local government and have developed with them their strategic housing role over the last two and a half years and I have a very good relationship with the WLGA. I suppose finance is different. Rents are lower in the social rented sector in Wales, so finance can be more difficult. There are a number of things that you could easily find that are different.

Q8 Mr Jones: To what extent does the present legislative framework inhibit you from achieving those policy objectives?

Ms Davies: If we could take some examples in the Matters, would that help? In relation to Matters 11.2 and 11.3, these are about social housing providers and social housing bodies. Very soon after becoming Minister, the Community Housing Cymru, which is the umbrella organisation for housing associations in Wales, persuaded me to undertake the Essex Review. The regulatory regime in Wales was somewhat out of date, much more out of date than it was in the rest of the UK, I have to say, and it became quite obvious to us once we saw the Essex report that there were very few early intervention powers, for example, if there was a problem with a housing association. We are the regulator. The Welsh Assembly Government is the regulator for housing associations. It became obvious to us that to complete the powers and for us to have an appropriate regulatory regime it was important that we included this. Of course, in the current situation lenders are particularly concerned about lowering their risks, so what they want to do is to make sure that the regulatory regime under which associations are operating lowers their risks as much possible. In relation to 11.4, which is tenure law, it is something that tenants organisations and tenants raise. It is the fact that there are unexplained and difficult to justify differences between the tenancies that you have if you are in a housing association property than if you are in a council property. That has become evident during debates around stock transfer where tenants worry that they may be losing rights if they transfer over to a housing association. Matter 11.5, of course, is those matters about disposals by social landlords, that is the right to buy/right to acquire, preserved right to buy. That covers all the voluntary and statutory disposals. This is, in fact, very similar to the previous Order that you saw. In 11.6, which is housing related support, largely in Wales we rely on the Supporting People programme. Some of that work is delivered via the local authority and some is directly commissioned by the Welsh Assembly Government, which I imagine is unique across the UK. Even though we can attach grant conditions to the money, and it is about £140 million a year, so it is a large sum of money that goes to outside organisations in order for vulnerable people to remain independent at home, I can only attach conditions to the grant, there is no ability for the Assembly to legislate in that area. In relation to 11.7, and this is the sites for gypsies and travellers, this would come under the Social Justice Minister but has been included in this Order. We have developed our own gypsy and traveller's strategy and we do provide financial incentives to local authorities to encourage them to provide sites, but there is no way we could compel. I put this on the record before, and I am sure the Minister would not mind me repeating this, I do hope that the Assembly would never, ever have to have legislation in this area, but it is important that it is possible as a last resort to do so.

Q9 Mr Jones: Compel to the extent of compelling local authorities to make provision for gypsies and travellers?

Ms Davies: If there is a properly assessed and clearly identified need. In relation to homelessness, currently I do have some specific powers in relation to homelessness but that is constrained by the current primary legislation which was largely created with the aim of dealing with people once they had become homeless. In Wales we have developed a homelessness strategy which focuses on prevention, so the executive functions that I have were actually created for a different purpose than our policy direction, and of course the case law that follows it, and we have no ability whatsoever to legislate in the area of homelessness. Local authorities often stress that they would like more flexibility in the way that they discharge their duties but I can do absolutely nothing about that.

Chairman: Could you pause at that point for a minute. Mr Jones, do you want to ask a question?

Q10 Mr Jones: That was very helpful, Chairman. In fact, before the session commenced the Committee were discussing the wide-ranging nature of this proposal. I think it would be helpful to the Committee if your office could let us have a note of each individual item of existing national legislation, most of it statute law I would guess, not all of it, that would be impacted or potentially impacted by this proposal. I think that would be very helpful to the Committee if you could do that.

Ms Davies: The last Matter was council tax.

Q11 Chairman: Would you be able to provide us with that note?

Ms Davies: Yes, I assume so. The one last Matter is council tax. The Welsh Assembly Government does have some powers in relation to local government finance. This is something that local authorities have called for in relation to dwellings that are not the main residence of an individual and very recently we had a debate in the Assembly, an opposition debate, and this was the thrust of that debate. We were not able at that time to say this was included in the Order because it had not been published, but certainly there is support across parties in relation to allowing more flexibility to local authorities.

Q12 Mr Jones: Would that extend to holiday homes?

Ms Davies: Any home that is not the main residence. If it is a business premises and it is a holiday let that would be part of a business.

Q13 Mr Jones: To that extent it would be different because it would be affected by uniform business rates.

Ms Davies: That is right.

Q14 Mr Jones: As you know, some holiday homes which are let are not let out for a full 12 months and, therefore, do attract council tax rather than business rates, so it would affect those particular homes.

Ms Davies: If it is not the main residence of an individual.

Q15 Mark Williams: The Assembly Government will not be publishing the final housing strategy until the new year, it is still open to consultation. I am slightly loath to ask this question because, like you, I am very keen that we should advance these things very speedily, but would it not have been better to consider this proposal in the light of the final outcome of that document?

Ms Davies: We will be pushing it in the new year. If you see the draft of the housing strategy, it is not a terribly long document but in that draft we are committed to reviewing the homelessness legislation, for example, and there is a commitment in relation to tenure law and new approaches to intermediate housing. I do not think that the strategy once it is finally published is going to be all that different from the draft strategy that you see because we have developed the draft strategy with our housing partners in Wales. Ceri, did you want to add something?

Mr Breeze: The strategy was published earlier this year and the consultation is closed. We have had very supportive comments on it and are now taking the opportunity to update the strategy and bring together a number of separate strategies so, instead of having a separate Supporting People strategy and strategy for older people, those will be integrated into the national strategy. The policy direction has not changed, the LCO reflects the direction we are going in that strategy.

Q16 Mark Williams: You touched on the purpose of the LCO in your earlier comments, and it is on a different scale from those we have seen before. Again, some of us very much welcome that. To what extent does this LCO arise from the Assembly Government's view that it would be constitutionally appropriate and in line with the devolution settlement to devolve complete legislative competence over housing, rather than the pressing need? I suspect both principle and need in this case go very much hand-in-hand.

Ms Davies: Yes, they do. It is appropriate that the National Assembly can legislate in the area of housing. I think most Assembly Members are a bit surprised by the fact that there are no legislative powers for them in relation to housing and generally is delivered by executive functions, although I have to say they are piecemeal, as I was explaining earlier, so you are constrained by the primary legislation. If there is legislation that is proposed either by the Government or a committee or backbencher, that is probably more appropriate than just being able to agree or disagree with what the Government are suggesting. Certainly in relation to the regulatory framework, having no early intervention and enforcement powers can be a considerable barrier should there be problems in a housing association and, as I mentioned earlier, we do need to give lenders much more comfort than perhaps they tolerated in the past. I suppose I would say that it is both in a way, that there is a principle attached to it but we can justify all the Matters that we have included in this.

Q17 Mark Williams: Given the breadth of those areas, at any point in time did you consider a series of different LCOs drawing down the powers in particular areas as the need became clearer? Was it always the intention that it should be one composite document?

Ms Davies: Of course we have had two and a half years of policy work and all of these things are so interrelated. If you talk about homelessness legislation or are doing reform of tenure law, that might impact on one of the other powers. I would not say that we will have a series of measures, it could be that we will have a housing measure.

Mr Buffin: For example, if you change tenure you may need to change provisions relating to allocation which would be picked up in 11.2. Sometimes it can be very difficult to be too specific within these Matters and these areas because of the interrelated nature of them.

Ms Davies: The two themes are in relation to social housing and vulnerable people. Those are the themes that relate those Matters. There are things that we deal with that we have executive functions in relation to that we have not included in this. Mr Williams, I am sure you would not mind me saying you write to me regularly and sometimes raise things with me, and park homes is something Members often raise, the private rented sector sometimes. There are a number of things that, even though we may have some functions in relation to we have not included in this because our priority was the social rented sector and protection of vulnerable people.

Q18 Mark Williams: Again, I think you touched on this earlier. What specific legislation is needed to implement the six guiding principles as laid down in the Explanatory Memorandum? Those six are very clear. Perhaps fundamental to that, given the urgency of some of the issues, can one anticipate the Assembly Government introducing legislation under all eight Matters of the LCO before the end of the Assembly term? There is quite a big challenge there, is there not?

Ms Davies: I have to say I have learned my lesson and we are not counting our measures until our Orders have hatched. I have not got a secret piece of legislation that has been worked up and worked up and is ready to go. You will know from the last time I was here that we do have a One Wales commitment to draw down the powers to suspend the right to buy and some work was done in relation to consulting on the principles of that and what that might look like. There is not a secret Bill somewhere that would contain everything and if I had to choose I am not sure which one of these areas would be the most important for me. Certainly I would like to be in a position whereby I could bring legislation before the end of this Assembly term. I appreciate that I am not in a position to say that is going to be possible.

Q19 Hywel Williams: Good afternoon, Minister. Housing was very largely devolved when the Assembly was set up and you have extensive powers already. What areas of competence are being extended to the Assembly by this Order which exceed the powers you already have as ministers?

Ms Davies: Of course, as I was explaining, we have some powers as the regulator in relation to housing associations but not all the powers that are laid out here. There are no intervention powers, no enforcement powers. As we go through, I do not think we have got any powers to change tenure law but we could probably tinker around with it a little bit perhaps. We certainly would not have the ability to create one sole social housing tenancy so there is no difference between a housing association tenancy and a council tenancy, and that is certainly something the tenants organisations would welcome. As I was explaining in relation to homelessness, there may be specific things that I could change but I certainly could not do anything in relation to the discharge of duty. The current legislation, because it was intended to deal with people who had become victims of homelessness, there tends to be this idea of having to prove that the local authority has a duty to you, that you were not intentionally homeless, and then if there is a duty to you it has to be discharged in a certain way. Even though we have used those powers to the best of our ability, that is not helpful when you want to intervene much earlier than when homelessness happens. We have certainly done a lot in terms of attaching conditions to grant but there is only so far you can go with that. Even though we have got powers in a number of these areas, it is not a coherent bundle of powers that allows you to develop policy in the way that you would hope because it is piecemeal.

Q20 Hywel Williams: Further to that point, would it be fair to describe this Order as bringing the Assembly's powers in line with the executive powers that you already have as ministers?

Ms Davies: We are not drawing them exactly to the current ones.

Q21 Hywel Williams: You are standing back and looking at it?

Ms Davies: Yes. That would not give us whole competence over homelessness, as I was explaining, because the powers that we have are piecemeal but within that area. Members of the Assembly are quite surprised that there are not any legislative powers currently for the National Assembly to legislate in relation to housing and some of the things that I can do as a Minister in housing I do not even need to refer to the Assembly for a vote of any nature. Sometimes there is subordinate legislation and when we adopted the model standards for park homes that was brought to the floor of the Chamber, but some things you can do without reference to the Assembly as a whole.

Q22 Hywel Williams: That leads on to my next question. Since the Assembly was established further executive powers have been devolved to you as ministers, looking at the Housing and Regeneration Act, but why were legislative powers not passed on at the same time?

Ms Davies: At the time we had not had the Essex Review because that was not commissioned until October 2007 and, of course, most of the Housing and Regeneration Bill was an England-only Bill because it was setting up the agency for the regulation of housing associations. At the time the previous Legislative Competence Order was being worked up in relation to the right to buy, although there were some provisions in relation to right to buy in the Housing and Regeneration Bill and we did get executive functions in relation to those, it was not broad enough in order for us to deliver the policy intention of a temporary suspension of the right to buy where a local authority made an application to do so. It was very narrow. We did have the conversation about the Housing and Regeneration Bill but it was not considered an appropriate place for us because the provisions were not wide enough.

Q23 Hywel Williams: Just standing back looking across the whole piece, do you think there is enough time being allowed for the scrutiny of this proposal, which is broader than what was proposed previously?

Ms Davies: I know that the Assembly Business Committee has set a timetable for the Assembly scrutiny committee, the legislative committee, and the Committee Chair has told me that she and the Committee would like to be able to meet that timetable. That Committee has never reported late. I am hoping that the Assembly Committee can report within the timetable, but we do not have control over the way that the Committee operates other than through the Standing Orders.

Q24 Chairman: Could you remind me of the timetable of all this. The Essex Review was commissioned in October 2007 and reported in June 2008.

Ms Davies: That is right, yes.

Q25 Chairman: When did you draft the first housing LCO?

Ms Davies: The first housing Legislative Competence Order began to be drafted prior to me becoming minister. You will recall there was a minority government that was elected. I think Rhodri Morgan became First Minister in June of 2007 in a minority government and work began on it then. It was announced then before I was minister.

Q26 Chairman: Were things out of synch? If you wanted to start afresh I suppose this is the housing LCO you would have preferred rather than the one you had to deal with last year?

Ms Davies: I suppose because work had started on that because that one was based on manifesto commitments and this one is based on two and a half years of policy work in government, it is entirely different. We have had the Essex Review and we needed a new housing strategy, a new homelessness plan, and our new approach to policy development has led us to this. I could not have come here two and a half years ago with this because the policy work simply would not have been there.

Q27 Chairman: In other words, your answer, without putting words into your mouth, is more care and consideration has been put into this one compared with the last one.

Ms Davies: Yes.

Mr Breeze: The Essex report that was published launched a considerable body of work to look in-depth at all of these areas and after that report that was the start of much work. The original focus was right to buy. Even if in the Regeneration Act we had taken limited powers, we would probably still be in a position now of coming back for more competence powers purely because of the body of policy work that has been done since identifying the specific needs in Wales.

Ms Davies: If you looked at the debate that was held in the Assembly when I introduced this new Order, it was universally welcomed right across the Chamber. It has had universal support.

Q28 Mr Jones: If we turn to proposed Matter 11.5 which relates to disposals, social housing and so on, right to buy, what policy changes have taken place which have resulted in this particular draft since the last occasion you came before the Select Committee on the previous LCO?

Ms Davies: There is still the One Wales commitment to draw down the powers for the temporary suspension of the right to buy in areas of high housing pressure. There has been some policy work done in development through the Essex work streams because we did not respond to the Essex recommendations in the traditional way by just issuing a response or consulting on the report, we set up work streams and it was not the Welsh Assembly Government that led all the work streams, we invited WLGA and others, housing associations and others, to lead the work streams. One of the things they have been looking at is intermediate products, intermediate rental products and other low cost home ownership models. The way that this is drawn would allow us to legislate if it was needed in areas to maybe introduce a brand new product, I suppose.

Q29 Mr Jones: The policy as it stands is simply to suspend the right to buy?

Ms Davies: Yes.

Q30 Mr Jones: There is no other policy at the moment in relation to the right to buy other than suspension in cases of housing pressure?

Ms Davies: Temporary suspension in areas of high housing pressure on application by the local authority.

Q31 Mr Jones: So there is no policy to abolish the right to buy?

Ms Davies: No, none.

Q32 Mr Jones: I am sure you will recall on the last occasion that this proved the most problematic aspect of the previous proposed LCO and that resulted in the proposal that the Secretary of State for Wales effectively should have the right of veto in case of the Assembly deciding it wanted to abolish the right to buy. The policy framework or policy background, it seems to me, does not appear to have changed. In those circumstances, would you have any objection to the same solution being arrived at, that is that the Secretary of State again would have to give his or her consent to the abolition of the right to buy in Wales?

Ms Davies: The Order as it stood amended required agreement between the Secretary of State and Welsh ministers.

Q33 Mr Jones: It was effectively a veto, was it not?

Ms Davies: The abolition of the right to buy could not have been forced on a minority government because you would have required the agreement of Welsh ministers. I do not think it was just a veto for the Secretary of State, it required the agreement of the Secretary of State and the Welsh Government.

Q34 Mr Jones: But there would have to be agreement by both parties.

Ms Davies: There would have to be agreement by the Welsh Government and the Secretary of State.

Q35 Mr Jones: Correct.

Ms Davies: That did not find favour because of its, shall we say, constitutional novelty, and I can see why. Of course, it did lead to the Order not proceeding. The policy certainly has not changed. There is absolutely no intention to abolish the right to buy. The Welsh Assembly Government is supportive of home ownership aspirations of tenants and, as I say, we are currently working with housing associations and local authorities to look at new projects which may very well be more appropriate.

Q36 Mr Jones: I understand that, and I am sorry to interrupt, but it does seem to me that as this Committee is now considering this proposal, the policy background has not changed from the previous policy and, therefore, presumably you would not be surprised if the Secretary of State in due course were to decide that he wanted his previous proposal to remain, that is there would have to be agreement by him and the Welsh Assembly Government before the right to buy could be abolished under the provisions of Matter 11.5 because nothing really has changed in terms of policy.

Ms Davies: The addition of that to the previous Order had led to it stalling and not proceeding. I cannot imagine any circumstances where anybody would bother to pursue that line if it meant that the Order would then stall.

Q37 Mr Jones: I simply make the point that in policy terms, so far as this aspect of the proposal is concerned, it is identical to the policy that prevailed at the time of the last application in terms of the right to buy.

Ms Davies: The policy in relation to the right to buy remains exactly the same and I am very happy to put on the record that the Welsh Assembly Government has absolutely no intention of abolishing the right to buy. I would also add that in the intervening time through the Essex work streams we did considerable work on developing and looking at other products which may be more suitable, so purchasing your property if you are a social housing tenant under HomeBuy terms, so you do not go up to 100% but buy a proportion of it, developing intermediate rental products, a whole range of things, we do not want to rule anything out. It could be that to introduce these may need abolition in the future, I do not know, and I cannot say what a future Welsh Assembly Government would do. It is certainly not our intention. I do not think that it would find favour to introduce into the Order a mechanism that meant the Order is bound to fail again.

Q38 Chairman: Could we now turn to cross-border issues. There are two important elements of housing policy that are not devolved, namely housing benefit and council tax benefit. How do you take account of that as you develop your housing policy in Wales?

Ms Davies: We do know that there are cross-border issues and I did mention earlier that we have commissioned work on the housing revenue accounts. There has been a review undergoing of the housing revenue accounts, as you know, and I understand that your Housing Minister has said that it may need primary legislation, so no doubt we will be involved at that point because it does affect some local authorities that still own their stock. Independent of the English review, we have undertaken a review ourselves and commissioned an expert on that. We do know there are cross-border issues in relation to tenants who are in the social rented sector. Members might be quite surprised that there are - I think it is just five - five properties in England that are owned by an association in Wales, but the reverse means there are several hundred properties in Wales that are owned by associations registered in England. On a number of occasions English associations have developed in Wales. We do know that there are cross-border issues.

Q39 Chairman: I was specifically asking about council tax benefit and housing benefit.

Ms Davies: If you have a look at the way the Order is drafted in relation to housing related support, for example, it specifically says "non-financial assistance".

Mr Buffin: The other thing is there are floating exceptions which have recently been introduced by the Exceptions to Matters Order and that includes social security and independent living funds, so that would be excepted from competence.

Q40 Hywel Williams: As you have no control over housing benefits and council tax benefits, does that influence your planning? How can you plan if you might be subject to change in a very short period of time because of something that happens in this place? I will just give you a very quick example. Currently there is a proposal, at least in a Green Paper, to change attendance allowance and disability living allowance for people over-65 and, to say the least, there is a great mystery as to how that will be translated into policy in the Assembly because as far as I can see that has not been particularly well considered.

Ms Davies: No.

Q41 Hywel Williams: Do you struggle with that sort of potential change over which you have no control in formulating your housing policy?

Ms Davies: Of course, because if you are a social landlord perhaps 70% or 80% of your tenants may be entitled to housing benefit and even though we do the determination on rent we have to bear in mind that a significant proportion of that will come from the Treasury because of the housing benefit situation. We do have to balance that and have discussions with our colleagues in Treasury on these matters. Council tax does not impinge so much on the work that I do because obviously the finance that I deal with is local government finance rather than housing finance, housing benefit really. Of course, any borrowing that is undertaken by a housing association has to be paid via the rent, the rent policy is influenced by housing benefit and trying to balance those things, so we do have to take them into consideration.

Q42 Chairman: We may need to ask this question in another context and in another place. In the new year we will be starting an inquiry into Wales and Whitehall and it occurred to us in the course of our cross-border inquiry - ongoing - that a great deal is unknown about relationships between ministers in the Welsh Assembly Government and in Whitehall. I do not know what the question is about all of this but we will need to write to you possibly in the new year in the context of our future inquiry because in this policy area specifically - I am speculating - there appears to be a need for greater proactive engagement on the Welsh side to influence UK policy.

Ms Davies: I am quite happy to put on the record that in relation to housing policy I have a good relationship with ministers here and in the Wales Office. I do not think it will be a surprise to anybody that the Treasury is quite an art, I suppose. We often talk about negotiations and I am not sure whether that is the right word to describe discussions with Treasury.

Mr Breeze: If I could just give an example as well of proactive relations with CLG, for example, on the implementation of the Rugg Review into the private rented sector. We are pursuing that with CLG in the new year and it is interesting to note that some things that were in the Rugg Review are already in place in Wales. There are benefits both ways.

Ms Davies: We do have good relations on the whole with Whitehall departments.

Q43 Hywel Williams: I am just thinking it is a two-way street. Sorry for such a cliché. Are you satisfied with the level of information that is passed from this place to you in Cardiff? Can I give you an example? I heard the other day that there is some consideration being given here to changing the term from "council tax benefits" to "council tax rebates" or even "council rates rebates" in the hope that will improve the rates of take-up. Given that you said you do not have particular responsibility for council tax, were you aware of that discussion?

Ms Davies: No. Certainly in relation to the proposal in relation to housing benefit, which I believe has been withdrawn now, it was paid directly to individuals and they could keep some of the benefit they were entitled to if they could find a cheaper place to rent. There was a proposal that that be withdrawn and we were not consulted on that before it was announced. We have been asked since how we feel about it but we were not consulted on it prior to it being announced. We are not always completely in the flow, I suppose. It is very easy to say that you must communicate a lot but sometimes it is more difficult to do it than you imagine. I am sure sometimes it is inadvertent rather than deliberate.

Mr Breeze: I get a stream of information from Whitehall departments about changes, not always with as much time as I would like in advance. There is no doubt that relationships can get stronger and better, but there are some links going on and getting stronger.

Ms Davies: Sometimes officials will say that the deadline within which they have to reply is too challenging.

Q44 Chairman: Do you find that the Wales Office is sufficiently proactive in facilitating your relationships with Whitehall departments?

Ms Davies: I have got no complaint at all.

Q45 Mr Jones: Is your experience that they are proactive or reactive in the way that they deal with issues?

Ms Davies: We have had a lot of dealings with the Wales Office because we have had two Legislative Competence Orders. We have had a number of secretaries of states and ministers because there have been changes and sometimes that can halt things. I have to say I have got no complaint at all, I have had cooperation and we have had direct contact with ministers here as well. I met with John Healey and we discussed some of the content of this.

Q46 Mr Jones: I am not referring specifically to LCOs, I mean generally in facilitating your relationship with DCLG as you just mentioned. Do you find that the Wales Office is helpful and proactive?

Mr Breeze: I have always found them helpful. I think some of it is us engaging the Welsh Office in terms of our discussions with CLG direct. It is not simply a one-way street. Yes, it is helpful and we would intend the relationship gets stronger in the future because there is an obligation on us to engage in what we are telling Whitehall departments as well as vice versa.

Q47 Mr Jones: Absolutely. Getting back to the draft LCO, it includes terms, for example "homelessness", that are already defined in other legislation. Is it intended that those terms should bear those existing statutory definitions? If so, do you think that maybe the interpretation provisions in the draft LCO should be amended to include cross-references to those existing statutory definitions?

Ms Davies: A lot of discussion has gone on in relation to which words would be defined and which ones would not. Neil, I guess you would be best placed to explain that.

Mr Buffin: In terms of terms which have not been defined the view was they would have a definition within the context of the LCO from the context itself. For example, "homelessness" would not need a specific statutory definition.

Q48 Mr Jones: So it does not relate back to existing statutory definitions?

Mr Buffin: The definition in the Housing Act, for example, is for the purpose of that Act, it is not intended to be a general all-purpose definition. Similarly, with any subsequent measure the breadth of homelessness could be set within that measure. Other definitions we felt were necessary because there is no simple statutory definition. For example, "social housing", "social housing provider" were ones where it was decided a specific definition was needed in order to frame the legislative competence.

Q49 Mr Jones: So you would anticipate that the definitions where they are needed would not appear in the draft LCO but in the measure that flows from it?

Mr Buffin: That is correct, yes.

Ms Davies: In relation to "homelessness", we did not want to use a statutory definition that then kept taking us back to what do you do with someone when they become homeless because the definition in our statute is around that, and this is about homeless prevention wherever we can. Just in the normal use of the word "homelessness" we expect to be able to take those powers that are required for the policies that we are pursuing.

Q50 Hywel Williams: It could be argued that one Matter could replace 11.2, 11.3 and 11.4. That is just a Matter on social housing rather than social housing providers, relevant social housing bodies, tenure of rented social housing and other arrangements in the way social housing is provided, and their definitions. Did you consider at all just having one overarching Matter that is social housing?

Ms Davies: You will see from the Order that social housing in the Order is not actually social rented housing and there is a definition there that "social housing provider" is a person providing housing to people whose needs are not adequately served by the commercial market, so low cost home ownership and other things, anywhere where there has been an intervention in the free market, we are saying for the purposes of this Order are, in fact, social housing and any body or local authority that has connection with that can be considered a social housing provider, so you could have Community Land Trusts that would fall into this or co-operatives or someone who is providing housing that requires intervention into the private market. We are not confining this to the housing association property or the council property, this is much broader than that.

Mr Buffin: The intention of 11.2 and 11.3 is to cover functions relating to and functions of social housing providers and relevant social housing bodies, whereas if you look at 11.4 that is not a function per se, it is about tenure or tenancies. The function by social housing providers is the provision of those tenancies.

Ms Davies: I think it is quite cleverly written. As you can imagine, there has been considerable discussion and negotiation between lawyers about how it is drawn up. The fact that "social housing" is defined in such a broad way that you are not confining yourself to rented and that "social housing provider" is actually related to that in a very succinct way gives us competence over the areas which we hope to be dealing with.

Q51 Hywel Williams: I said earlier on that a great deal of housing had been devolved in the first place, and then we have this Order. Are there other aspects of social housing, other than those specified in these Matters, that will still remain outside the Assembly's competence?

Ms Davies: In relation to council housing, of course, there is the housing revenue account subsidy system because that relationship is between the local authority and the Treasury. That is an obvious one. Could we have legislation in relation to standards? I cannot think of any obvious area that would be left out, obviously housing benefit and anything like that, but also the housing revenue account subsidy system, and lending to housing associations.

Chairman: Minister, those are all the questions we wish to pose to you today. There may be additional questions that we may write to you about. Could I thank you for your attendance and your agreement to change the arrangement for today. Originally we had intended to have an informal meeting, but this has been much more productive and we are grateful to you for that. We look forward to working with you in the coming weeks and a successful conclusion to this LCO. Finally, could I thank you for the warm words that you gave to us in relation to our work last year. Thank you very much.