(12 years, 8 months ago)
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Lord McKenzie of Luton
“Tenancy strategies
(1) A local housing authority in England working with registered providers of social housing in its area, residents, and other stakeholders shall consider appropriate responses to relevant tenancy issues locally.
(2) A local housing authority must publish information detailing the approach taken locally to tenancy issues in any manner it considers appropriate.
(3) This information may include how the local housing authority, registered providers and partners will work together in relation to—
(a) the kinds of tenancies they grant,(b) the circumstances in which they will grant a tenancy of a particular kind,(c) where they grant tenancies for a certain term, the lengths of the terms,(d) the circumstances in which they will grant a further tenancy on the coming to an end of an existing tenancy, and(e) any other issues as determined appropriate by the local housing authority.(4) The powers in this section may be exercised by a single local housing authority or by two or more local authorities acting jointly.”
Lord McKenzie of Luton
My Lords, my noble friend Lord Kennedy is having a well earned rest. He has passed the easy stuff to me.
In moving Amendment 23, I shall also speak to Amendment 24, which is consequential. Amendment 23 addresses the issue of tenancy strategies and seeks to replace the provisions in the Bill with an alternative formulation. It provides that the local housing authority in England, working with registered providers of social housing in its area, residents and other stakeholders, shall consider appropriate responses to relevant tenancy issues. The local housing authority must publish information detailing the approach taken locally to tenancy issues in any manner that it considers appropriate. The information may include how the local housing authority, registered providers and partners will work together in relation to a range of tenancy issues. The powers may be exercised by a single local housing authority or two or more local authorities acting jointly.
We have no objection in principle to tenancy strategies but consider the formulation in the Bill as it stands to be misplaced and too prescriptive. This was debated in the other place, so the issues are not new, just unresolved. Noble Lords will recognise that the amendment has been provided by the LGA and the National Housing Federation. The fundamental concern with how the Bill is drafted is that it reflects a centrist approach that of itself will do little to support better housing outcomes locally. Our amendment is an encouragement for co-operative working in developing strategies that reflect views not only of the local housing authority and registered providers of social housing but of residents and other stakeholders. The amendment could very much go with the grain of how councils are already working across the country with local landlords to identify and meet housing need. This work requires a good understanding of the local housing market, including new supply, the private rented sector, social housing, the impact of the new homes bonus and affordable rent—many of the issues debated earlier.
We have been presented with case studies that underline excellent work that is ongoing. I shall refer to two. There is the case of Hackney, where the Better Homes Partnership brings together a wide range of partners, including housing providers, community and voluntary representatives, to identify support and steer the delivery of Hackney’s long-term strategic objectives as set out in its sustainable community strategy. The partnership board is co-chaired by the deputy mayor and the chief executive of Hackney Homes, and the board has a housing management and housing investment subgroup that focused on strategic issues affecting Hackney’s people and places, such as antisocial behaviour, overcrowding, investment challenges and opportunities and the design and sustainability of new homes.
Shropshire Council’s housing strategy identifies housing needs and sets out how the council will meet them through an action plan agreed with internal and external partners. There is a clear focus on strengthening partnership with both registered social landlords and the private sector, and the council’s affordable housing allocation has been developed in consultation with tenants, applicants, housing associations and other stakeholders. The council is currently in discussion with registered providers regarding the development of its strategic tenancy policy.
The amendment would facilitate working across single local authority boundaries, as we have just instanced, and the development of local tenancy forums. Further, as the LGA points out, the timing of policy in Clause 137 is not well thought through. It requires the commencement of strategies that start in April 2012 but, given that the affordable rents model commenced in April 2011, that seems to be a bit late. I do not believe that we are apart on the need for strategic tenancy strategies, nor, I suspect, on the vision of how they might be developed. We suggest, though, that unfortunately once again the Secretary of State cannot let go and trust local councils and communities to deliver as they see fit. I beg to move.
Baroness Hanham
My Lords, I recognise that the amendment is founded on the concerns that the creation of tenancy strategies would enable local authorities to dictate to the housing associations in the area—exactly what the noble Lord, Lord McKenzie, said. I reassure the House that that cannot and will not be the case.
A housing association has to be aware of the strategy and take it into account as a relevant consideration when deciding what its own tenancy policy should be, but each individual landlord will be able to decide for himself—or itself, as far as the association is concerned— how it will use the new flexibilities that the new provisions in the Bill offer. We discussed that on the previous amendment.
Concerns in other quarters that a tenancy strategy represents the imposition of a heavy and centralist burden are, we believe, unfounded. All we are seeking to do is ensure that local policies on tenure are developed collaboratively and transparently, and that the tenancy strategy provides a simple framework for that to happen.
A tenancy strategy is not going to be difficult or burdensome to produce. There is no requirement for it to be in a specific format or to be of a particular length, and there is no barrier to local authorities working jointly with social landlords to produce one. I believe that we have struck the right balance between encouraging joint working and maintaining an individual landlord’s freedom to decide how they will use their new flexibilities, and that this is done in a light-touch way.
Clause 139 adds tenure to the matters on which the Secretary of State has the power to direct the social housing regulator regarding the standards that it has set. This power is key to the delivery of our proposals on tenure reform. The revised tenancy standard, to which I have already referred, will determine the detail of the additional freedoms on tenancies available to landlords and protections available to tenants, so it is right that the Government are able to give a direction on tenancy standards to the regulator. The Government’s power to direct the regulator is limited to a very few key areas, and it has always been acknowledged, including by the current regulator, that tenure is fundamentally a matter of government policy.
It is important to remember that the overall effect of the changes that we are making to the standards will actually be to reduce the level of regulation to which social landlords are subject and increase their flexibility. I hope that the noble Lord will accept that response and be willing to withdraw the amendment.
Lord McKenzie of Luton
My Lords, I thank the Minister for her response and her explanation of the Government’s position. She says that she is interested in and focused on a light-touch approach. I would, if anything, describe ours as slightly lighter and less centric, but we shall not argue about this. It is an issue that we have aired tonight and in another place. It is important that there is genuine flexibility in these arrangements, and that there are opportunities for full engagement across the piece locally when these strategies are being developed—not only by local housing authorities and providers but by representatives of tenants and the community more widely. That is the particularly important thing that we sought to probe in this amendment. Having said that, I beg leave to withdraw the amendment.
Lord Shipley
“(3A) In carrying out the review, the reviewing officer shall presume that a new flexible tenancy for a term at least equivalent to the current or previous fixed term should be granted to the tenant unless the contrary is shown to be in accordance with the authority’s policies, in the interests of good housing management and compliant with Article 8 of the European Convention on Human Rights.”
Lord Shipley
My Lords, this amendment is designed to create a presumption that flexible tenancies should be renewed on expiry unless good reasons are shown to the contrary. The reviewing officer should proceed on the basis of the presumption that a new flexible tenancy for a term at least equivalent to the current or previous fixed term should be granted to the tenant unless the contrary is shown to be in accordance with the authority’s policies, in the interests of good housing management and compliant with Article 8 of the European Convention on Human Rights. That is, the decision should take account of the tenant’s right to respect for his or her home, or his or her private and family life.
The removal of security of tenure will result in a great deal more uncertainty for tenants where it occurs. They will be aware of the looming threat of possibly losing their homes towards the end of a fixed-term tenancy. While the presumption in favour of renewal would not remove this worry, it would at least ensure that tenants are on a more secure footing and help to ensure that landlords undertake a thorough and rigorous process when reviewing tenancies.
As the legislation stands, the process that tenants will have to undergo when their flexible tenancies come to the end of the fixed term is weighted almost entirely in favour of the landlord. The amendment would help to ensure that when this process is being undertaken there is greater protection and clarity for tenants towards the end of their tenancy. Many of those tenants will be particularly vulnerable. We can do this by placing the onus on the landlord to justify refusing to extend the tenancy, rather than expecting the tenant to undergo a potentially complicated reapplication process. This will be preferable, since many tenants will be unaware of what factors are relevant to the authority’s decision and may find it difficult to advocate their case for renewal of a tenancy or struggle to provide proof of need. Further, a presumption in favour of renewal would make it harder for landlords to adopt practices or make decisions that may discriminate against certain tenants, such as those who have made complaints about the perceived failures of the landlord.
Finally, there is one further issue to do with guarding against bureaucratic failure. The administration of a brand new bureaucratic system of housing assessments across local authorities is likely to be a significant undertaking and could well lead to mistakes being made. As a result, it is vital that tenants have basic protections written into the legislation that will provide for default renewal of the tenancy if landlords either fail to carry out a lawful review or are unable to justify a negative decision. Bureaucratic failings already cause a great deal of hardship to people on low incomes, such as when mistakes occur in determining housing benefit claims or when registered providers fail to issue an assured tenancy following a successful probation period. No one should face the possibility of losing their home as a result of a bureaucratic failing. The amendment would help to prevent this happening. I beg to move.
Lord McKenzie of Luton
My Lords, my noble friend Lord Kennedy has added his name to this amendment. I support everything that the noble Lord said in moving the amendment. I have nothing further to add. I do not propose to move Amendment 33, which is grouped with this amendment, when we come to it.
Baroness Hanham
My Lords, as I said in Committee, Amendment 28 is not necessary. The review already ensures that a decision by the landlord not to renew the tenancy must be fair and in line with the landlord’s published tenancy policy. Should the reviewing officer decide that the decision is not in line with the landlord’s policy, the landlord will need to reconsider his decision. Where a landlord seeks possession of a tenant’s property despite a review concluding that he was not acting in line with his own policy, the court will refuse to grant possession, as the Bill makes clear. Amendment 33 will not be moved. I hope that the noble Lord, Lord Shipley, is minded to withdraw Amendment 28.
Lord Shipley
My Lords, I am grateful to the Minister for her response. I hope that what she has described will happen. I am sure that it will. We need to ensure that people who are worried about a successive tenancy have little cause to fear that the landlord might decide not to grant a further tenancy. On the assumption that the measure will provide what we are trying to achieve, I beg leave to withdraw the amendment.
Lord Beecham
Lord Beecham
My Lords, this amendment relates to the position of tenants under the new flexible tenancies who seek to improve their property with the consent of the landlord. There is, of course, existing provision for this to happen; this matter is dealt with fairly routinely. The local authority or social landlord does not have an obligation to consent to an improvement. That is still within their remit to determine. However, under the Bill, the tenant will no longer be able to apply for consent or secure compensation for such improvements if he has a flexible tenancy.
It does not seem to me sensible to deter tenants who wish to improve their property from carrying out that improvement as long as the authority is prepared to agree to it. That case was strengthened today by the meeting—this has been referred to on more than one occasion—which the noble Baroness convened this morning with her right honourable friend the Minister for Housing. The latter was clear—indeed, the noble Baroness echoed his thoughts earlier today—that only in a minority of cases would a two-year flexible tenancy be granted, and that he did not expect to see many of those. He was bullish—that characteristic has earned him some notoriety—about the extent to which short flexible tenancies were unlikely to be granted, and said that most would be longer. I think he anticipated that 10 years or longer would be par for the course, in which case it is surely not sensible to put any difficulties in the way of tenants improving a property. Such improvements would still be subject to the consent of the local authority. I cannot see any reason why that option should not remain open and why a property should remain unimproved by the tenant when there is a real possibility that he might carry out such works for the benefit of future tenants as well as himself.
This is not in any sense a political or ideological amendment. It is simply a practical one that seeks to retain the present position, in the hope that people will be encouraged to improve their properties without the difficulty that Clause 142 would put in their way. I hope that the Minister, if she cannot affirm tonight that the Government are prepared to accept the amendment, will take the issue back and have a serious look at it, because I cannot see who gains from the clause as it stands. I beg to move.
Baroness Hanham
My Lords, I can probably reassure the noble Lord about this. While the amendment would provide flexible tenants with the same statutory rights as traditional secure tenants to improve their properties with the written consent of their landlord, and be compensated for those improvements on leaving the property, our proposals provide flexible tenants with many of the same rights as other secure tenants—for example, a right to exchange their home with another tenant or a right to succession for a spouse or partner.
However, the right to make improvements is, we feel, less appropriate for a tenancy that may be for five or 10 years than it is for a traditional secure tenancy, where a tenant may be in the same property for the rest of their life. That does not mean that tenants on flexible tenancies cannot make improvements to their house or, indeed, be compensated for them. What it does mean is that it will be for the landlord to decide what improvements the tenants can make, and that that would be included in the tenancy agreement. If the tenants are there for a full term, a whole lifetime or more, they can do what they like. Effectively, they can improve their property and the landlord would compensate them subsequently. However, in shorter tenancies, landlords must delineate what they will allow tenants to do; then there is nothing to stop them being compensated for that.
The noble Lord, Lord Beecham, looks more puzzled than cross—which he sometimes looks. Perhaps he may not be willing to withdraw the amendment, but I invite him to do so.
Lord Beecham
I am sure that I never look cross when I look at the noble Baroness. I accept her assurances, which I shall perhaps investigate further. For the time being, I am prepared to accept those assurances and I therefore beg leave to withdraw the amendment.
Baroness Wilkins
“( ) The Secretary of State must publish directions to the social housing regulator requiring the regulator to set standards on the provision of succession rights in express terms of secure tenancies.”
Baroness Wilkins
My Lords, I speak to Amendments 30 and 31 concerning the Bill’s removal of automatic succession rights for relatives of those living in local authority properties and the Government’s introduction of express terms of tenancy. The purpose of these amendments is to ensure that the Government make it explicit how and when these express terms of tenancies should be given to people other than spouses and civil partners to succeed a tenancy. The learning disability organisation Mencap is concerned that, as the Bill stands, it potentially weakens the position of disabled people who live with their parents or relatives in succeeding a tenancy. It also undermines the position of carers who have had to give up their own homes to look after a parent or relative. This issue was raised by the noble Lord, Lord Rix, in the truncated hours of the Committee stage, and he would have moved these amendments today had he been able to be present. He of course supports them and is grateful to the Minister for meeting him to discuss his concerns.
The right of succession is especially important for some of society’s most vulnerable groups—especially for disabled people who have lived with and been supported by their parents well on into their adult lives. According to current figures, between 50 per cent and 55 per cent of people with a learning disability still live with their parents. Their right to the home where they have lived all their lives is currently protected when their parents pass away. The Bill removes that security.
While the Government’s move to introduce express terms of tenancy is partially welcome, it does not go far enough in protecting the interests of disabled people. It is left to the discretion of housing providers and local authorities, which may well restrict the number of tenancies with an express provision because the position is not clear cut as it is now, so that such tenancies become rarer over time. Furthermore, tenancy agreements could be drafted and agreed at a time when there is no likelihood that an express term in the tenancy agreement will be needed. However, family circumstances can change drastically, and then a carer or a disabled son or daughter could be at risk of losing the security of their home if the housing provider is unwilling to change the terms of the tenancy agreement.
The amendments would ensure that regulations were in place to outline under which circumstances and to which groups of people an express term of the tenancy should give a right to succession. Hopefully, it would be clearer that disabled people, including those with a learning disability, living with parents and relatives who have given up their home to care for a disabled relative would be entitled to a succession to the tenancy. Unless the Secretary of State sets out directions for a standard for succession rights beyond a spouse or a civil partner, the default position of housing providers could undermine the long-term interests of disabled people. That could be one of the unintended consequences of the Bill. I hope that the Government will support the amendments. I beg to move.
Baroness Gardner of Parkes
My Lords, I have every sympathy with the amendment, as it deals with an important issue, but I am concerned about one thing. I am all for people who have given up their homes to care for someone else to have a right of further occupation somewhere, but where a property has been specifically adapted for a disabled person, I would be much happier to see another disabled person able to use that accommodation. It should not be naturally guaranteed that the person who was there simply as a carer should then take over a property that might be eminently suited to another disabled person. I wonder whether that issue needs to be considered under the amendment.
Lord Wigley
I support the noble Baroness’s amendment. I do so declaring an interest as vice-president of Mencap Wales and having discussed these matters with the noble Lord, Lord Rix. This issue is of considerable concern to those who campaign for and work with people with disabilities—particularly learning disabilities. The insecurity that can be caused by the uncertainty arising from changes in legislation can undermine such people even more than those who are able-bodied but who none the less have a valid case for security of tenure. There is considerable concern and dismay in the world of disability about the changes. I hope that the Minister can give assurances that can put those people’s minds at rest. The last thing that we would want to do from this Chamber is to perpetuate or worsen the insecurity felt by those vulnerable people.
Baroness Hollins
My Lords, I, too, support the amendment. I have worked for the past 30 years with adults with learning disabilities and their families, and I am also the parent of a young man with a learning disability. A particular interest of mine has been how adults with learning disabilities cope when their parents die. Many in the past have had to cope not only with the death of a parent but the loss of their home. Although the possibility was there under the previous Housing Act for the succession to continue, appropriate arrangements had often not been made. Arrangements to support people to stay in their home are now available and it would be very sad if succession rights were weakened at a time when support arrangements to enable people to remain in their familiar family home when their parents die are improving. I agree with the sentiments expressed by previous speakers and suggest that such a vulnerable group needs that security—as do parents, who anticipate that their adult children now have a life expectancy similar to that of the rest of the population. They need assurance that their security of tenure is provided for. That would be a huge comfort to such families.
Lord Beecham
My Lords, I confess that I was puzzled by these amendments until my noble friend patiently explained them to me. She completely persuaded me and that persuasion has been reinforced by the contributions of the noble Lord, Lord Wigley, and the noble Baroness, Lady Hollins. It seems that we are dealing here with two potentially vulnerable groups of people—those who may themselves suffer from an incapacity or disability and those who care for them—and it would be sensible to give some assurance and security to both those groups in the context of the provisions of the Bill.
The amendments suggest that the Secretary of State should publish directions to the social housing regulator. The point made by the noble Baroness, Lady Gardner, is a fair one and needs to be taken into consideration. It could well form part of the directions that might be given to the social housing regulator in terms of the standards that would be set so that, where a carer remained in a property, an alternative offer of accommodation would have to be made. I should have thought that that would meet the noble Baroness’s point.
I hope that the Government will respond positively to the amendment—if not tonight, then perhaps at Third Reading. I cannot see that it would in any way violate the thrust of the Government’s policy. I believe from the Mencap briefing that some 500,000 to 600,000 people are living with parents or carers. Presumably they would not all be eligible for security of tenure but a significant number would be, and it is right that, given the problems that they are already confronting, they should not have the added problem of feeling insecure about their future. They are an important group in the community, and the community as a whole must take responsibility for ensuring their continued security and comfort.
I hope that the noble Baroness will respond positively—if not definitively tonight, then at Third Reading. I understand that there have been discussions with the noble Lord, Lord Rix. I assume that a potential way forward would be agreed with him and I hope that we might see that way forward, if not tonight then at Third Reading. The Opposition would certainly warmly support that.
Baroness Hanham
My Lords, I hope that we will not have to return to this at Third Reading, as I trust that I shall be able to reassure the House on these matters. I did indeed have the opportunity to talk to the noble Lord, Lord Rix, about his concerns, as well as to people at Mencap. I think that we largely reassured him, although there were one or two areas about which I know he was not content. However, we covered quite a lot of ground.
I am immensely sympathetic to this whole problem. People who have children with learning difficulties, or anyone who looks after someone with an illness, a disability or a mental illness, have enough problems to worry about without being concerned about what will subsequently happen to the person they are caring for.
Our proposals in the Bill will enable decisions about succession to be made on a case-by-case basis. I am sure that noble Lords will be aware that at the moment carers have no right to succeed to a tenancy, even if they have given up their home. There is absolutely nothing that gives them any rights to take on the property. They can succeed only as a spouse or a family member and only in certain circumstances. Therefore, we are trying to make succession easier by giving social landlords the power to give rights as they see fit. This is important. It will be left to landlords to decide to whom they give succession rights. They can, and, I imagine, will, decide that someone who gives up a property to care for a tenant will be entitled to such a succession. Under the provisions, they can also grant succession rights to an adult child with a learning disability living with their parents when either of those parents is unable to maintain where they are. We already require landlords to publish their policies setting out the circumstances in which they will use the new flexibilities that they will have around succession, and the tenancy standard will also require them to set out their policies on how they take into account the needs of vulnerable households. That is what we are talking about today—people with needs.
The noble Baroness, Lady Gardner, spoke about the need for flexibility to recover property that had been adapted. We absolutely agree with that. Landlords can already do that and can recover property adapted for disabled people. The only thing that they must do is house the successor elsewhere. If a tenancy is granted to a carer—a successor—and the property is completely unsuitable, they must be offered an alternative. The provisions are there. The noble Baroness, Lady Wilkins, and the noble Lord, Lord Rix, may worry because we are not categorically saying that that is what will happen. What we are saying categorically is that, within the terms that we think could be adopted, landlords must now take account of the position of people who are in the property and that it does not necessarily have to be a spouse who takes the tenancy of it. The people we would worry about are those who have given up their homes or who are caring for other people without having somewhere else to go.
I hope that, with those reassurances, the noble Baroness will feel able to withdraw the amendment. I thank her for moving it on behalf of the noble Lord, Lord Rix.
Baroness Wilkins
I am grateful to the Minister for that reply and am most grateful to everybody who supported the amendments. I fear that it is still left to the discretion of the landlord and still leaves a feeling of insecurity. I would like to read the record and discuss it with the noble Lord, Lord Rix, who may want to return to the issue on Third Reading. I beg leave to withdraw the amendment.
Baroness Hanham
“(2A) In that Part of that Schedule, in Ground 16 (vesting of tenancy in member of previous tenant’s family other than his or her spouse or civil partner)—
(a) at the beginning of the first unnumbered paragraph for “The accommodation afforded by the dwelling-house” substitute “The dwelling-house is in Wales, the accommodation afforded by it”,(b) in the first unnumbered paragraph—(i) in paragraph (a) after “tenancy)” insert “or 90 (devolution of term certain)”, and(ii) in paragraph (b) for “the date of the previous tenant’s death” substitute “the relevant date”, and(c) after the first unnumbered paragraph insert—“For this purpose “the relevant date” is—(a) the date of the previous tenant’s death, or(b) if the court so directs, the date on which, in the opinion of the court, the landlord (or, in the case of joint landlords, any one of them) became aware of the previous tenant’s death.””
Baroness Hanham
My Lords, these are government Amendments 32, 34, 35 and 36. When someone who is not a spouse or partner succeeds to a local authority property which is larger than they reasonably need, the landlord can move them to a more suitably sized property between six and 12 months after the death of the original tenant.
A government amendment tabled in Committee in response to a suggestion put forward by the Opposition dealt with the problem of a successor tenant withholding news of the death of the tenant from the landlord until after the recovery window had closed, thereby preventing the landlord reclaiming the property. It did this by enabling a court to decide whether the window is deemed to have opened six months after the original tenant died or six months after the landlord became aware of the death. However, the amendment in Committee applied only to cases in England. The Welsh Assembly Government have asked that this provision apply also to local authority tenancies in Wales. This new amendment ensures that that is the case.
Government Amendments 34, 35 and 36 are minor and technical and ensure that certain provisions apply only to England and not also to Wales, in line with our original policy intention. I beg to move.
Lord Wigley
My Lords, I intervene briefly to ask about the implications for Wales. I am grateful to the Minister for indicating that she has taken up the view supported by the National Assembly. That is very good and moves things forward. With regard to Amendment 36, the Explanatory Notes, to which I referred in Committee and which refer to the original Bill presented to us, suggested that the clause on repairing obligations in leases of seven years or more was applicable to both England and Wales. Was that incorrect or have things changed during the passage of the Bill? My question is parallel to another that I asked. On that occasion, the Minister said that the clause was intended to cover possibilities that might arise in future. I would be grateful, when she has had an opportunity to get advice, if she would clarify the position so that we in Wales know where we stand on the amendment.
Lord McKenzie of Luton
My Lords, I will speak briefly, subject to anything that arises from the question raised by the noble Lord, Lord Wigley. Obviously we support the amendments. I take the opportunity to thank the noble Baroness and her team for the volume of correspondence that we have had, which has explained the government amendments and the position on amendments that were withdrawn. I will not comment on timeliness—I understand that we have had a further missive during the course of our proceedings today—but it is generally helpful to have things set down in correspondence in the way in which they have been.
Baroness Hanham
My Lords, I thank the noble Lord, Lord McKenzie of Luton, for that. A prodigious amount of work went on during the Recess. We were very conscious that, with the withdrawal of all the amendments at the end of the previous stage, it was important that noble Lords understood what we had done. I say to the noble Lord, Lord Wigley, that we made this correction in line with the Welsh Assembly's wishes that the repairing obligation change would not apply to Wales.
Baroness Hanham
“(aa) the dwelling-house is in England,”
Baroness Hanham
Baroness Hanham
“Orders for possession: cases in which Ground 8 is not available
(1) Section 7 (orders for possession) of the Housing Act 1988 is amended as follows.
(2) In subsection (3) for “subsections (5A) and (6)” substitute “subsections (5A), (6) and (6A)”.
(3) In subsection (4) for “subsections (5A) and (6)” substitute “subsections (5A), (6) and (6A)”.
(4) After subsection (6) insert—
“(6A) If the court is satisfied—(a) that Ground 8 in Part 1 of Schedule 2 to this Act is established; and either(b) that some rent is in arrears as a consequence of a delay or failure in the payment of relevant housing benefit, or(c) the landlord is a private registered provider of social housing,it shall not make an order for possession unless it considers it reasonable to do so.”(5) After subsection (7) insert—
“(8) In subsection (6A) above—(a) “relevant housing benefit” means—(i) any rent allowance or rent rebate to which the tenant was entitled in respect of the rent under the Housing Benefit Regulations 2006; or(ii) any payment on account of any such entitlement awarded under Regulation 93 of those Regulations;(b) references to delay or failure in the payment of relevant housing benefit do not include such delay or failure as is referable to any wilful act or omission of the tenant.””
Lord Palmer of Childs Hill
My Lords, the proposed new clause amends ground 8 of Schedule 2 to the Housing Act 1988. At present, private landlords and housing associations can use ground 8 to seek possession of accommodation let on an assured tenancy where a tenant has arrears equal to more than two months' rent. The important point is that, unlike other rent arrears grounds for possession, ground 8 is mandatory: only in this instance does the court have no discretion to decide whether it is reasonable to make an order for possession. The amendment to ground 8 is designed to give discretion to the courts in cases where housing benefit issues are outstanding. I am sure that many noble Lords have seen such examples. The court can decide to adjourn the case or suspend an order for possession. This will help to ensure that tenants are not evicted from their homes because of non-payment of, or delay in the payment of, housing benefit.
The amendment would also prevent housing associations and other private registered providers of social housing using ground 8. The reason for this reform is that it is not appropriate for social landlords to seek to deprive the court of its discretion by mandating that it must make an outright order for possession, whatever the circumstances of the case. The Minister will know that most housing associations choose not to use ground 8, but some do. Local authorities do not have a mandatory ground for possession based on rent arrears. There is no need or justification for a mandatory arrears ground where social tenancies are concerned.
Lord McKenzie of Luton
My Lords, the noble Lord, Lord Palmer of Childs Hill, makes a very interesting case. I do not propose to follow him into the detail of ground 8, but I shall comment on the fact that we are going through a period of some upheaval in relation to housing benefit, which brings a particular poignancy to the point which he raises. If we look at what is on the cards, we know that local housing allowance rates are now set at the 30th percentile of local market rents. We know that a cap on the local housing allowance rate has been introduced. We know that under the Welfare Reform Bill, local housing allowances are going to be uprated by CPI in future rather than by reference to what is happening to rents. We know that there is an increase in the non-dependant deduction, and we know that there are changes to the shared room rate as well. Each of those things creates some challenges in the administration of housing benefit.
Moreover, we are on the cusp of having something called universal benefit, and all the housing benefits will eventually be paid through that process but at a time when the Government are seeking to uncouple the administration of housing benefit from council tax benefit. The practicalities of that present a real challenge, because we know that lots of councils will have contracted out those joint arrangements and how you unpick and administer them is a really challenging issue—quite apart from the issue of whether they are going to be direct payments or how the payment of housing support is going to flow through. We know what the Government’s answer is going to be because we have read it in the book that was presented to us, and I doubt that that has changed over the weeks since that appeared. The point made by the noble Lord seems to me to be especially relevant at this time because of this great upheaval around housing benefit.
Baroness Gardner of Parkes
I would like to ask a question about this amendment, which I am not entirely clear about. I have been told recently by people who have had court possession orders and eviction notices served on them that that does not really put them out of anything until the bailiffs come in. What is the position if the court grants a possession order but the bailiffs have not been instructed? I understand that there is usually quite a time lag between those two events and that the housing benefit comes through in that time, particularly when it has been delayed. How would that work in relation to those two different procedures?
Baroness Hanham
My Lords, I have all sorts of answers that were given in the letter, which I was absolutely satisfied covered everything that could possibly be raised. I am stuck on this position about the courts and will have to come back to noble Lords, because the response I have already given is that landlords must have the right to go for possession, particularly where there are rent arrears and particularly where those are long term. On the other hand, landlords are expected to use every possible means of supporting tenants to sustain their tenancies and to prevent unnecessary evictions. That should be a requirement on all social landlords within a revised tenancy standard. The expectation is that evictions should happen only as a very last resort.
There is a well established pre-action protocol on rent arrears and the data show a steady decline in evictions of housing association tenants in recent years. However, we believe that good practice in managing rent arrears should not exclude using mandatory grounds in limited circumstances—right at the end of the road when the landlord really had not been able to come to any satisfactory conclusion. Recent independent research suggests that mandatory grounds are used sparingly, in less than 5 per cent of total housing association evictions for rent arrears. That is not a very high percentage, and indicates that it is not being used as a blunt instrument and takes proper account of the particular circumstances of the case.
There are protocols and we expect landlords to abide by them. I do not think we want to remove the mandatory aspect of ground 8 from the legislation. Under the previous Government, a working group was convened to look at the issue in detail and it commissioned independent research through the Tenant Services Authority. However, there was absolutely no unanimity among external partners that abolishing ground 8 was necessary or desirable.
Having talked long enough, I have been able to get at least a partial reply to my ignorance about what happens in the courts. The grant of possession does not necessarily mean eviction. Landlords may need to apply to the court again for an eviction order and arrears could be resolved before that point, which should have been the situation in the case mentioned by the noble Lord, Lord Palmer. If it is an arrear, time should be given for housing benefit to come through to prevent that eviction.
I think I understood the noble Lord to say that the courts felt that they had no alternative but to grant possession and to ensure eviction. I may have misunderstood him but I hope I have not. If that is the situation, I simply say again that no action should necessarily need to be taken immediately as a result of that court decision, particularly if it relates to money and it is felt that eviction is likely to come about. I am bound to say that in that scenario I would expect the landlords to have got to that situation before they apply for eviction, but there may be reasons why they have not.
We would resist removing ground 8, which leaves room for negotiation and should not have the effect of ensuring that tenants are automatically evicted as part of the court decision. If I have misunderstood anything that the noble Lord, Lord Palmer, has said, he is bound to let me know when he replies to the amendment. If necessary I will look at that position again, but I hope I have picked up the main points of his concerns. I very much hope that he will feel able to withdraw his amendment.
Lord Palmer of Childs Hill
My Lords, I thank the Minister for her detailed reply both in writing and verbally. She has not misunderstood anything but she lives, as perhaps we all do, in this utopia where all landlords are good. I am afraid that in the world in which I live not all landlords are good, and I believe that there are a modest number who will use ground 8. I hope that only a modest number will do that, but there will be some who will. There should be nothing in legislation that removes the discretion of the court to do what is right. The matter of when the bailiffs move in was raised. Those who have had experience of the courts know that that is a varied situation because it often depends on whether the landlord has set the thing in motion to get early occupation of the property.
That is particularly important at this moment. The noble Lord, Lord McKenzie, talked about when benefits—universal benefits and the like—are paid. Those of us who have been local councillors—I have been a councillor for 25 years and still am—know that local authorities and social landlords use IT systems to deal with housing benefits. For years, my local authority used Pericles, which went dreadfully wrong. It is not an indictment of any landlord that they should use a system that goes wrong, because IT systems often do, but the fact is that, with the changeover to universal benefits, which has already been mentioned in this debate, there is a great probability that housing benefits arrears will be built up unintentionally because of a changeover in computer systems. In that case, there would be the danger of ground 8 evicting people without the courts having a chance even to postpone eviction. I would ask that my noble friend the Minister looks again at how many such cases there have been and whether there is a need to tweak this in the legislation.
Lord McKenzie of Luton
Does the noble Lord agree that the issue is compounded because there will be a split of housing support, which is going via the universal credit, and council tax benefit, which is staying with local authorities? The noble Lord from his experience would know that often those systems run together and are contracted out jointly, although I do not know whether in this particular instance that is the case. Therefore, having to unpick those two systems, as well as having to build the universal credit, adds a particular dimension to the issue that he has raised.
Lord Palmer of Childs Hill
I thank the noble Lord for emphasising that point. In my view, during this volatile period there is a great danger of more notional housing arrears arising that would pose the danger of eviction. Good landlords, as my noble friend the Minister said, will be able to deal with it, and that is why I concurred with what she said. But can any noble Lord doubt that there will be some bad landlords? Some bad landlords may seek to use ground 8 knowing that the courts have no power to protect the tenant. Perhaps between now and Third Reading the Minister could look at that. Having said that, at this stage, which is always a mixture of Committee and Report stage, I beg leave to withdraw the amendment.
Lord Whitty
Lord Whitty
My Lords, in moving Amendment 38 I shall speak to the other amendments in the group. We have come to the housing revenue section of the Bill and my amendments would delete the lot. I suspect that if the Chief Whip were in her place she would say that I am using Committee procedures because potentially I am using a clause stand part Motion to get some clarification of the Government’s intentions. In other words, this is a probing amendment and I do not expect to seek a vote on it. Indeed, I think I probably support the general direction of government policy in this area. However, it is an area that was not discussed at all in Committee and is one in which, to my knowledge, in all the copious material that the Minister has provided for us, we have not had a comprehensive statement of the Government’s intention. Perhaps I missed it, but I have not seen a clear statement of where we are going on housing revenue.
Housing revenue means two different things. It means the allocation between housing authorities so that some are losers and some are winners in a national reallocation process that seems in part to be reproduced in these provisions, and it is a protection at the individual local authority level to ensure that rental and other income received for housing purposes is actually recycled for those purposes. That protection is not always quite adequate, but nevertheless it is part of the long-existing provision. On previous occasions when housing revenue stipulations have been significantly changed, there has been a whole Bill that has gone through a number of procedures. Here we are squeezing them into a very large Bill in which, to my mind at least—although again I should say that I may have missed it—the Government have not spelt out their intentions. The last Government made a start on this, and by and large I approved of the Minister’s approach, but I have not seen a similar comprehensive statement of where we wish to end up.
There are a lot of complicated provisions here, particularly in regard to the formal abolition of subsidy to the balance between what the Secretary of State allocates to different authorities. No new formula has been proposed, but neither is it clear that the old formula will still operate. One has to say that the old formula was pretty opaque and gave rise to some disgruntlement in a number of local authorities. The Government owe us a clear explanation of where we are going on the housing revenue account, and if it already exists I would be grateful for it. If not, I am happy for the noble Baroness to write to me in the interval between now and Third Reading, but I do not think that this House should let what could be a major strategic redirection on housing revenue provisions pass without comment.
Some of my colleagues have tabled detailed amendments, but my amendments are intended to give the Government an opportunity to explain what their strategy is. At least the position will then be clear so that by Third Reading we can decide whether we agree with it or not. Given the way I am trying to use these amendments, I hope that the noble Baroness will take them as they are intended, in a spirit of inquiry, and give us greater clarification. I beg to move.
Lord Best
My Lords, the amendments of the noble Lord, Lord Whitty, would leave out a whole series of clauses that relate to the housing revenue account. I have added my name to Amendment 46, which would leave out just one of those clauses. That implies that I am happy with the others, as indeed I am.
The housing revenue account is regarded in local government circles as well past its sell-by date and there is general acclaim for its abolition. It is a significant aspect of the localism agenda that financial responsibility for council housing is to be put back into the hands of councils. In place of pooled debt and pooled rents, each council involved will henceforth assume direct responsibility for housing debt according to its ability to repay it, and it will keep all the income from rents for managing and maintaining its own council stock. Efficiency gains on its rented account will go back into improved housing provision. These are helpful reforms, but they stop well short of giving councils the full financial independence that could enable proper asset management of their housing resources and harness significant prudential investment in new homes. These freedoms are enjoyed by even the smallest housing association.
Amendment 46, in leaving out Clause 158, would remove the restriction on councils that want to borrow prudentially—knowing that they can repay what they borrow—for housing purposes. When councils move to a self-financing regime with the housing revenue account buyout on 1 April 2012, they will face new restrictions on borrowing for housing purposes—a new capping regime—despite the continued presence of the prudential code that has operated perfectly well since 2003. The chairman of the Local Government Group points out that it has demonstrated on many occasions that councils have a strong record of sound financial management and manage borrowing responsibly in accordance with the prudential code. He says that local government’s view is that these rules to which it adheres provide sufficient protection that councils will undertake only borrowing that is affordable, and that imposing a cap on councils’ ability to borrow for affordable housing will severely restrict their ability to invest in an increased number of affordable homes, which government wants to see. Paradoxically, housing associations are being encouraged at exactly the same time to borrow a lot more to replace the shortfall resulting from smaller grants. A lot of housing associations are borrowing more, but not councils, which must accord with the new cap. The Local Government Group says that it hopes that if government will not remove the new cap, Ministers will at least consider committing that local government will be properly consulted in determining the level at which the cap is to be set for each authority to allow some crucial further investment on a sustainable basis. I support the removal of the clause as proposed by Amendment 46.
Lord McKenzie of Luton
My Lords, I suppose that there are not many people who like to collect together at this hour to discuss local housing finance, but it falls to us to do it. We understand that the amendment of my noble friend Lord Whitty is probing in nature to try to gain an understanding of where the Government currently stand on this issue. If I have to be fair to the Government—I try not to be—I think that they have been quite active in putting out consultations; there is one due in November if my understanding about the final figures which will be debated with local government is correct. Of course, they have built on the prospectus that was issued in March last year under the previous Government.
As with the noble Lord, Lord Best, we support the thrust of most of these clauses except for Clause 158. They provide the framework for the self-financing scheme for local authority housing stock which will replace the existing housing revenue account subsidy system. As noble Lords have recognised, the current subsidy system is based on a range of assumptions about local authority housing stock, covering rental income, maintenance and management costs, costs of service in debt and of major repairs. An authority will either receive a subsidy from the notional calculation if it was in deficit or pay to the Exchequer amounts when the calculation showed a surplus.
When the current subsidy system started, no local authority was in surplus but, as I understand it, by 2008-09 the system overall had tipped into surplus with the aggregate of amounts paid to the Exchequer exceeding the aggregate of subsidy payments. The reforms reflected in these clauses were initiated by the last Labour Government. As my noble friend recognised, the current system had become a source of discontent for a variety of reasons, particularly because it is complex and lacks transparency, with changes from year to year making it difficult to plan effectively over the long term. We believe it is right to change that, which is why we support the thrust of these amendments.
The reform consulted on by the previous Government involved a devolved, self-financing system where there is no redistribution of revenues in return for a one-off allocation of debt to local authorities. This allocation would be based on each authority’s ability to service the debt and maintain its housing stock. In essence, this represents a deal between central government and local authorities. In return for allocating excess debts to local authorities, the latter will obtain greater spending power over the long term through retention of future rent increases. It represents a transfer of risk from the Government to local authorities.
My noble friend Lord Whitty will doubtless recall that the proposition for a self-financing regime proposed by the then Housing Minister, John Healey, included the one-off distribution and allocation of housing debt. All rents and receipts from the sales of housing and land in the HRA were to be obtained by the local authorities, with rental income to be based on current rental policy—that is, convergence with standard housing association rents by 2015-16. The housing stock would be valued using the 7 per cent discount rate. The latter component in particular—the 7 per cent discount—would have given local authorities headroom to be able to fund 10,000 new council homes each year.
Noble Lords will be aware that the principle of moving to a self-financing regime was overwhelmingly supported by local authorities. As these clauses make clear, the coalition Government are proceeding with the self-financing option and the basic method of debt allocation is to be as set out in the March 2010 prospectus—that is as I understand it but the Minister will tell me if I am wrong.
However, there are some differences and some major concerns, which are reflected in subsequent amendments. In particular, the discount rate to be used is 6.5 per cent not 7 per cent. This may seem a small difference but the effect is for central government to be some £1.2 million to the good and to remove much of the headroom that would have been in the system for building additional council housing. As the noble Lord, Lord Best, has said, the plan to cap the overall borrowing of each authority at a level linked to opening debt runs contrary to the spirit of localism and the self-financing concept.
We would argue that central government already have powers under the Local Government Act 2003. I should be grateful if the Minister could specifically deal with this. Section 3 of that Act talks about a local authority determining and keeping under review how much money it can afford to borrow. Section 4 gives the Secretary of State, by regulations for national, economic reasons, power to set limits in relation to the borrowing of money by local authorities. If that is on the statute book already, we do not need Clause 158. I agree with my noble friend and with the noble Lord, Lord Best, that that should not stand part of the Bill.
As for rents, retaining the approach of convergence with RSLs by 2015 is all very well, but the impact of changes to housing benefit, the urban benefit cap, the non-dependant reductions upratings and the 2013 room- size criteria for the working-age tenants create additional uncertainty and risk. Reversal of the plans for local authorities to retain all the receipts from right to buy should not be accepted, and we will debate that shortly.
Although my noble friend is right to challenge these provisions, we consider that it is right for the self-financing regime to proceed. However, as ever, the devil is in the detail and we look forward to an update from the Minister.
Lord Shutt of Greetland
My Lords, I thank the three noble Lords who have addressed this issue, particularly the noble Lord, Lord Whitty, for the way in which he addressed the several deletions. I am told that reference to housing finance did not enter the ranks in Second Reading and that there were no amendments the like of that proposed by the noble Lord, Lord Whitty, in Committee. It is interesting that we have got to Report and the fundamentals are being raised by the noble Lord, Lord Whitty.
Lord McKenzie of Luton
If the Minister will permit me to intervene, amendments were tabled in Committee dealing with Clause 158. The noble Lord, Lord Best, had one that we put our name to.
Lord Shutt of Greetland
Indeed, but there was not the wholesale abolition of the entirety of the clauses in the Bill on this whole issue of housing finance. I know that the amendment was moved in a probing way—I accept that—but it was not done at that point.
I understand the sense that there is a fundamental change here, and there is a need. I undertake that a document will be provided that sets out the change in simple terms. That is what the noble Lord, Lord Whitty, is asking for. He is saying, “I can’t cope with all this lot—what’s it all about?”. So there is a need for a simple document explaining that change. However, if we accepted his amendment, we would be stuck with a discredited and underfunded system for financing council housing instead of moving to self-financing, which is the culmination of a long-held ambition held by local government for councils to take full responsibility for their rental income and the management of their housing assets for the benefit of their tenants. It has been overwhelmingly supported in two public consultations, was originally a Labour Party policy and enjoys broad cross-party support.
Under the current system, Whitehall makes a series of complex annual decisions about what councils should raise in rents and what they should spend on their homes. Government then redistributes income between councils with an increasingly large profit being made for the Exchequer in the last few years as the methodology assumes that rents are rising significantly faster than costs. The result is that councils have no certainty about future income and no ability to plan long term as well as insufficient funding to maintain their houses to a decent standard. Through the Localism Bill, we will replace that subsidy system with one in which councils keep their own rents, thereby providing a direct link between the rent that councils charge and the services that they deliver. Tenants will, therefore, be able to hold their landlord to account. Councils will on average have 14 per cent more to spend on their stock than under the current system. This increase in funding is to meet the real costs required for management, maintenance and major repairs as identified in independent research.
I have some notes here that refer to a later amendment, but it is perhaps appropriate to deal with points raised by the noble Lord, Lord Best, about Clause 158. It is not a minor or technical part of these reforms, but instead is integral to protecting the Government’s central fiscal priority to bring public borrowing under control. I appreciate that many councils do not like that restriction, but our reforms must support national fiscal policy. Self-financing will give local authorities direct control over a large income stream, which could potentially be used to finance a large increase in public sector debt. Prudential borrowing rules have been effective to date in ensuring that local authority borrowing is affordable locally, but in the current fiscal context it must also be affordable nationally.
I am aware that the borrowing cap will place pressures on some councils in the early years of self-financing. These pressures, however, should be seen in the context of a deal that significantly increases funding for all council landlords at a time when other parts of the public sector are facing a very tight fiscal position.
I think that that covers the point that has been raised. It really is a case of the national position and the problems of the fiscal position affecting local authorities in terms of the restrictions that we have with our national economic situation. I hope, particularly on the basis that we will be able to produce a simple document of explanation, that this will be acceptable to the noble Lord to enable him to withdraw the amendment.
Lord McKenzie of Luton
Before the Minister sits down, could he deal with the point about the existing powers that the Government have under the 2003 Act, for national economic reasons and by regulations, to limit borrowing by local authorities? Why do they need the additional provisions of Clause 158? Do they not have those powers, or why are those powers insufficient?
Lord Shutt of Greetland
I am afraid that I will have to write to the noble Lord about that. I do not have a firm answer as to why that should be the case, although it may well be that someone is sending me a document on that. It is suggested that the existing power in the Local Government Act 2003 allows central government to,
“by regulations set limits in relation to the borrowing of money by local authorities”,
in order to ensure that the local authority does not borrow more than it can afford. While this power provides powers to cap local authority debt, it links local caps to local affordability. Our concern is not that councils will act in ways that are imprudent locally but that on aggregate these borrowing decisions may be unaffordable nationally. That is the situation there. If that does not cover the point, though, as I indicated earlier, I will write.
Lord Whitty
My Lords, I am grateful to the Minister for his offer to explain all this to me in simple language. I now understand that this is all about self-financing, which I have supported in the past and therefore continue to support. It is just that, due to the way the clause reads, it seemed to me that the one-off payment was not the result of a deal but was by the unilateral decision of the Secretary of State. Maybe that is the way that it has to be expressed in legislation, but I am grateful for the offer of a paper clarifying that. I still think that the points raised by the noble Lord, Lord Best, need a fuller riposte, and maybe the Minister could come up with that as well. In the mean time, though, I beg leave to withdraw the amendment.