HL Deb 14 March 1979 vol 399 cc634-6

2.52 p.m.

The Earl of KINNOULL

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether, in view of certain recent disturbing reports, they are satisfied with the accountability of the Housing Corporation.

Baroness DAVID

My Lords, my right honourable friend is satisfied that the affairs of the Corporation are carried out with complete probity and proper regard for the public interest. Some changes may be desirable in the financial arrangements under which they operate. These are under discussion with the Corporation.

The Earl of KINNOULL

My Lords, while thanking the noble Baroness for that reply, may I ask whether she can confirm that there were substantial errors discovered in last year's accounts, which I understand arose out of the computer? Secondly, can she confirm that there was no impropriety on the part of staff of the Housing Corporation?

Baroness DAVID

My Lords, there turned out to be nothing wrong with the accounts. The chairman delayed publication of the accounts last December to satisfy himself that they did not contain, as seemed possible at the last moment, a technical error due to incorrect transfers to the computer of accrued interest. Investigations by the Corporation's accountants did not confirm this. The chairman's action reflects a straight-forward approach with which noble Lords will sympathise. There was never any suggestion of impropriety. The accounts, which are about to be published, are in fact exactly the same as those which were withdrawn by the chairman.

Lord BOYD-CARPENTER

My Lords, can the noble Baroness say whether these accounts are audited by the Comptroller and Auditor General and therefore subject to examination by the Public Accounts Committee in another place?

Baroness DAVID

My Lords, I am afraid I cannot answer the first part of the question, but, as no doubt the noble Lord knows, the Public Accounts Committee have taken a great interest in these accounts. They examined Sir John Garlick in June and Mr. Wardale and Mr. Madge, who is the chief executive of the Housing Corporation, in January 1979.

The Earl of KINNOULL

My Lords, can the noble Baroness say whether it was correct or incorrect that a number of housing associations were in fact behind with interest payments in the last year? If that was so, how many of them were behind, and are the Government satisfied that they will recover all the lost interest? Also, can the noble Baroness say whether the Government have taken account of the Ninth Report of the Public Accounts Committee published last October, which particularly asked for action on the lack of accountability in connection with the Housing Corporation fund?

Baroness DAVID

My Lords, I can answer part of the noble Earl's question. Out of 2,700 registered associations, the Corporation have found it necessary to mount formal inquiries into the affairs of only 13, and it has normally been through their own vigilance that the cases have been brought under scrutiny. Of the 13 Section 19 inquiries, 11 have been completed. The conduct and management of two have been cleared and four associations have been wound up. In three other cases the Corporation have placed nominees on the association's board, and as regards the remainder the Corporation's board is at present considering what action to take.

The Earl of KINNOULL

My Lords, can the noble Baroness refer to the public accountability point?

Baroness DAVID

Yes, my Lords. The associations should be accountable to the taxpayer, to the local community and to their tenants. This is achieved in several ways. The associations must be registered by the Housing Corporation before they can receive a grant. Their projects are scrutinised to make sure that they represent value for money and their general activities are monitored by the Corporation, which means that they can go in and do spot checks at any moment. Increasingly close relationships are being encouraged between the associations and local authorities, and they are increasingly setting up tenants' groups and welcoming tenants' representatives on to their management boards in accordance with the guidance issued by the Corporation.