Moved by
Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook
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That the Bill be now read a second time.

Relevant document: 16th Report from the Delegated Powers and Regulatory Reform Committee. Welsh legislative consent sought.

Baroness Scott of Bybrook Portrait The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
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My Lords, I thank those Peers who have already engaged with the Bill and, indeed, those who have championed reforming the leasehold market for many years. I also thank colleagues from the Law Commission, without whom much of this vital legislation may not have been possible.

The Bill delivers long-awaited reforms to improve home ownership for millions of leaseholders across England and Wales. Reforming the leasehold system is a long-standing ambition of this Government. The comprehensive package of reforms before us will bring greater fairness, security, transparency and competition to the leasehold housing market. At present, leasehold home owners are too often at the whim of their freeholder, disempowered by the fundamentally unfair system. The Bill will address this power imbalance and give people the security of home ownership for their future and their families’ futures.

I will now move to the specific content of the Bill and outline the ways in which, when taken together, this package of reforms will transform the leaseholder housing market and the lives of millions of leaseholders across England and Wales. The core enfranchisement reforms of the Bill will give both families and individuals the security of an automatic 990-year lease extension, with ground rent reduced to a peppercorn on payment of a premium. This ensures that leaseholders can enjoy secure ground rent-free ownership of their properties for years to come without the hassle, distress and expense of repeated lease extensions. Removing the requirement to pay marriage value, capping the treatment of ground rents at 0.1% of the freehold value in the calculation, and prescribing the rates for those calculations will bring significant tangible financial benefits to leaseholders if they choose to extend their lease.

The Bill will also give more leaseholders the right to manage their own building, enabling them to appoint a managing agent that delivers good-quality work at reasonable prices and replace one that does not. As well as empowering leaseholders to make these important decisions themselves, this Government believe that making managing agents more accountable to the leaseholders who pay for their services will encourage these companies to up their standards.

Allied to this, we have also focused measures on cracking down on the poor, unresponsive practices blighting the daily lives of leaseholders, whether a managing agent is involved or not. This will give them true transparency over service charges, so that they can better understand the costs they are being charged and are better equipped to challenge them if they are unreasonable. Following the excellent work of the FCA, we will end the practice of leaseholders being charged exorbitant, opaque commissions on top of their building insurance premiums. We will also extend access to redress schemes for leaseholders to challenge poor practice. The Bill makes it a requirement for freeholders who manage their property to belong to a redress scheme, so that leaseholders can challenge them if needed. This will again empower leaseholders to challenge bad practice and bad management. This Government do not believe it is right that somebody can mistreat a leaseholder and their private property, while said leaseholder has no means to seek redress or compensation for that mistreatment.

Through these reforms, we will also scrap the presumption that leaseholders must pay their freeholders’ legal costs even when they win tribunal cases, levelling the playing field and correcting an historic power imbalance. There must be equality before the law. This Government believe firmly that leaseholders should not pay for a freeholder’s legal costs when said freeholder is found guilty of mismanagement or abuse.

I know that many across the House will be pleased to note that we are also granting further rights to home owners on private and mixed-tenure estates, which many here today have campaigned for. The Bill will give home owners the power to apply to the appropriate tribunal to challenge the reasonableness of charges they face or to replace a failing manager, access to support via a redress scheme, and measures to make buying or selling a property on such estates quicker and easier by setting a maximum time and fee for the provision of information required to make a sale. This measure encapsulates what the Bill is trying to do, which is to bring fairness and equality to the housing market. It is not right to force someone who has bought a freehold property to deal with only one managing company, which is not required to give them any information or charge them reasonable fees. It is also not right that someone who has bought a property on these estates has no effective way to hold the management company to account for the services they provide. These reforms will address that.

The Bill also clarifies and extends the protection in some specific areas of the Building Safety Act 2022, building on the legislation previously brought forward. These specific changes will further prevent freeholders and developers from escaping their liabilities to fund building remediation work, ultimately protecting leaseholders.

The package of reforms in the Bill before us is substantial and far-reaching for existing leasehold properties, but the Government wish to reform the future leasehold housing market too. The Bill therefore now explicitly bans the creation of future leasehold houses, with all new houses needing to be sold on a freehold basis, other than in exceptional circumstances.

In addition to the measures I have outlined today, I want to assure your Lordships that I understand the strength of feeling in the House to make even more changes to the Bill, in particular on the issue of forfeiture. We recognise that this is a real and significant problem and that there is huge inequity at stake here. We are working through the detail of this and will report back to the House shortly with more details as we consider the matter further.

I reassure noble Lords that the Government remain committed to commonhold reform and see it as a long-term replacement for leasehold. The Law Commission did fantastic work to review the commonhold framework and set out 121 separate and detailed recommendations on how to modernise it. These are not trivial changes; implementing them requires detailed consideration to make sure that we get it right, so that commonhold works for everybody.

The Government are also committed to reviewing the leasehold market and considering ways to improve its fairness. As such, we have launched a consultation on the capping of existing ground rents, which we are still carefully considering. The results will be published in due course.

In conclusion, this Bill will give leaseholders and their families greater security of ownership over their own private property for generations to come, and improve the lives of millions of home owners who have been forced to enter into a system that is unfair and outdated. I know that many in this House have campaigned to see these reforms, and I look forward to hearing the contributions of noble Lords during the debate on this important Bill. I beg to move.

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Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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My Lords, it is a pleasure to close this debate and to reflect on the many thoughtful contributions that we have heard. I thank all noble Lords for their engagement with the Bill thus far, and especially all noble Lords who met me before this debate to discuss their concerns. As the Bill progresses, I am keen to continue engaging. If any noble Lords would like a briefing, please get in touch. I will put further dates forward ahead of Committee, and of course noble Lords can ask for a meeting at any time, and I will try and accommodate them.

I have heard that some noble Lords would like to see what is in the Bill clarified and improved. Other noble Lords want to see it go further still, and I look forward to engaging with them on all those issues as the Bill comes to its Committee. That said, listening to this debate, I am also struck by the strength of consensus among noble Lords that the system of leasehold needs reform. I will now seek to address all noble Lords’ points in turn.

The noble Baroness, Lady Taylor of Stevenage, began the debate and set out her wide range of concerns, particularly those areas where she expects to bring forward amendments. I am grateful to her for her engagement and her work with the Bill so far; I look forward to continuing this as the Bill progresses. I will turn right away to the Government’s position on ground rents, on which she and noble Lords right across the House, including my noble friend Lord Moylan and the noble Lords, Lord Adonis and Lord Palmer, courteously asked for updates.

I understand the strength of feeling about this issue and the level of interest, given its size. We are aware that reforms to protect leaseholders will have a negative impact on those who benefit from ground-rent income, and are carefully considering this as we formulate our policy. That is why we are studying the recently closed consultation very carefully. Next steps will be set out in due course to this House as soon as I am able to do so.

I also want to address the specific point made by noble Lord, Lord Adonis, about the ECHR. The Government consider that all provisions in the Bill are compatible with the relevant convention rights; and that, in the case of provisions regarding Article 8 and A1P1, any interferences are justified and proportionate.

The noble Baroness, Lady Taylor, also had a specific question about marriage value, setting deferment rates in primary, rather than secondary, legislation. My noble friend Lord Borwick also raised this point. I understand their concerns, but we do not feel that setting rates on the face of the Bill would be appropriate. The Government absolutely recognise that careful consideration is needed on how to set rates, and that many different elements need to be considered when setting them. We have been clear that we will set the rates at market value to ensure that the amount landlords are compensated reflects their legitimate property interests, and we have had active conversations with relevant stakeholders. Ultimately, the Secretary of State’s flexibility to make these decisions is paramount, and we will continue these conversations. I welcome any further views that noble Lords might have on this matter.

I will come to the overall principle of marriage-value reform shortly, but with regard to the specific points made by the noble Baroness, Lady Thornhill, and the noble Lord, Lord Truscott, about the online calculator, it is an important issue, and I can confirm that the Government absolutely remain committed to launching this. This will help leaseholders understand how much it will cost to extend their lease or acquire their freehold up front. However, before we can launch such a vital tool and make a true success of it, we must first pass the Bill, so that the online calculator reflects the final provisions of the reforms in the Bill.

I turn now to the central issue that the noble Baroness, Lady Taylor, and many others raised: the future of the leasehold market. The Bill delivers our manifesto commitment to ban new leases of houses. Once commenced, other than in exceptional circumstances, new houses will have to be sold as freehold. I know that noble Lords across the Chamber, including the noble Viscount, Lord Hanworth, have expressed particular interest in the exceptions where a lease might still be justified, such as shared ownership, which helps consumers take their first step on the property ladder, or National Trust land where the freehold cannot be sold on. We expect a developer to prove it through the new steps included in the Bill. We believe that each can be justified, but we will keep a close eye on the market, and will not shy away from using the powers in the Bill to tighten or remove exceptions if required.

I turn now to the issue of banning leasehold flats, not just houses. The majority of houses have always been provided as freehold. There are few justifications for building new leasehold houses, so this Government will ban them. Flats, on the other hand, have shared fabric and infrastructure, and therefore require some form of arrangement to facilitate management. This has historically been facilitated by a lease.

None the less, the Government recognise the issues in the leasehold system, and I have heard the concerns from the noble Baronesses, Lady Taylor, Lady Thornhill and Lady Andrews, my noble friends Lady Finn and Lord Bailey and many other noble Lords regarding a lack of commonhold measures as a meaningful alternative to replacing leasehold for flats. I want to reassure your Lordships that the Government remain committed to commonhold reform and that we see it as a long-term replacement for leasehold.

Lord Kennedy of Southwark Portrait Lord Kennedy of Southwark (Lab Co-op)
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The Government have now had the report from the Law Commission for four years. I think the noble and learned Baroness, Lady Butler-Sloss, who is not in her place at the moment, raised the question: how much longer do they need?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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As I think I have said to the noble Lord many times from this Dispatch Box, this is a complicated issue. I think there are about 121 recommendations in the Law Commission’s framework and we just have not had the time to go through them. However, this takes us a good way towards commonhold for the future.

The Law Commission did fantastic work to review the commonhold framework, and, as I said, it set out 121 separate detailed recommendations on how to modernise it. I appreciate the points from the noble Lord, Lord Kennedy, about commonhold and his frustration that these reforms have not come forward. However, these are not trivial changes. Implementing them requires detailed consideration. It is a complex policy, and to make sure we get it right and so that commonhold does not fail to take off for a second time, we will take the time required to make it work. We will therefore set out our response to the Law Commission’s report as soon as that work is concluded.

On the comments made by the noble Baroness, Lady Thornhill, the noble Lord, Lord Stunell, my noble friends Lady Finn and Lord Moylan and many others about leasehold rights to manage, managing a large or complex building is not an easy feat, especially meeting building safety requirements, and some leaseholders may simply not want this responsibility. That is why the Government believe that leaseholders should therefore have the choice to manage their buildings, which they now do. The Bill delivers the most impactful of the Law Commission’s recommendations on right to manage, including increasing the non-residential limit to 50% in mixed-use buildings to give more leaseholders the right to take over management, and changing the rules to make each party pay their own process and litigation costs. These measures will help existing leaseholders now and save them many thousands of pounds into the future.

The Government recognise that the participation threshold of one-half can frustrate leaseholders if they cannot reach it. However, we agree with the Law Commission that the threshold is proportionate and ensures that a minority of leaseholders are prevented from acquiring the freehold against the wishes of the majority of leaseholders in the building. We are therefore very clear that we should hold the participation requirement at half of the total number of residential units in the premises.

The noble Baroness, Lady Thornhill, my noble friend Lord Moylan and many others have also made powerful arguments that the creation of new freehold estates must end, and that local authorities should be compelled to adopt all communal facilities on a new estate. It is up to the developers and the local planning authority to agree on specific issues relating to new development, including appropriate funding and maintenance arrangements. That said, we are carefully considering the findings and the recommendations of the Competition and Markets Authority report to address the issue that home owners on these estates face.

On the questions from the noble Baronesses, Lady Taylor and Lady Thornhill, about expanding the right to manage regime to cover the residents of freehold estates, the Government recognise the benefits that the right to manage regime on freehold estates would bring, empowering home owners to manage and take a greater control of the estate on which they live. However, there would be many detailed practical issues to work through to deliver this, which would all require careful handling since they affect property rights and existing contract law. Instead, we have introduced measures in this Bill to empower home owners and make estate management companies more accountable to them for how their money is spent, including the ability to apply to the appropriate tribunal to appoint a substitute manager.

The noble Lord, Lord Best, spoke extensively and eloquently about the regulation of property agents, which my noble friend Lord Young, the noble Lord, Lord Truscott, and many others, supported. This Government remain committed to driving up professionalisation and standards among property agents. We welcome the ongoing work being undertaken by the industry and others to drive up standards across the sector, including on codes of practice for property agents. I put on record my sincere thanks to the noble Lord, Lord Best, and the noble Baroness, Lady Taylor, for their valuable work on this issue. However, as a Secretary of State made clear at Second Reading, legislating to set up a new regulator would require significant additional legislative time of a kind that we simply do not have in the lifetime of this Parliament.

On cost, the Government believe that any regulation can and should be done in an appropriate and proportionate way that controls the cost to business. Managing agents must already belong to a redress scheme and leaseholders may apply to the tribunal to appoint a manager to provide services in cases of serious management failure. The Leasehold and Freehold Reform Bill will make it easier for leaseholders to scrutinise costs and challenge services provided by landlords and property managing agents, and ultimately for them to take on management of the buildings themselves, where they can directly appoint or replace agents. These measures, alongside existing protections and work undertaken by the industry, will seek to make property managing agents more accountable to the leaseholders who pay for their services.

The valuable work on the regulation done by the noble Lord, Lord Best, remains on the table, but this Bill is tightly focused on the fundamental improvements for leaseholders. These, alongside our building safety reforms, already make this a time of great change for managing agents, necessitating higher standards across the sector. We continue to listen and look carefully at the issues that Members across the House are raising on this.

My noble friend Lord Young spoke specifically about forfeiture, as did the noble Baronesses, Lady Taylor and Lady Twycross, my noble friend Lord Bailey and many others. As I said in my opening remarks, the Government recognise that this is a real and significant problem. There is huge inequity at stake. We have heard from colleagues today about why we should act. We think it is the job of government to go away and work through the detail of this, which we are doing. We will report back to the House shortly with more details as we consider the matter further.

My noble friend Lord Young, the noble Lord, Lord Stunell, the noble Earl, Lord Lytton, the noble Baroness, Lady Pinnock, and many others, raised several concerns about building safety, which I will try to address in some detail. The Government understand that many individuals are frustrated with the distinction between qualifying and non-qualifying leaseholders. We have been clear that the primary responsibility for resolving issues in buildings requiring remediation is with those who caused them. In circumstances where it does not prove possible to recover the cost of remediation from the developer, we have established a threshold that strikes a balance between leaseholders and landlords as to who should be paying for the costs of remediation. No leaseholder, whether qualifying or non-qualifying, can be charged more than they otherwise would have been in the absence of the leaseholder protections for costs relating to historical building safety defects.

A range of support is in place for leaseholders whose lease does not qualify for protection. All residential buildings above 11 metres in England now have a pathway to fix unsafe cladding, through either a taxpayer-funded scheme or a developer-funded scheme. With regard to buildings under 11 metres, it is generally accepted that the risk to life from fire is proportionate to the height of the building. Therefore, the risk to life from historic fire safety defects in buildings under 11 metres will require remediation only in exceptional circumstances.

Earl of Lytton Portrait The Earl of Lytton (CB)
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In relation to critical fire safety, the Minister referred to the risk to human life. I understand that that is what the independent expert statement was intended to cover; namely, critical life safety. What would she say about the other critical issues: finances and the cost of remediation, which none the less continue and are the matters that concern insurers and finance houses, which are by and large less concerned with questions of human life?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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We have taken the issue of human life as the important one. I think we will have further debates on 11 metres as we go through the Bill. I am conscious of time; if the noble Earl does not mind, we will deal with those matters in Committee.

Given the number of small buildings under 11 metres that need remediation, our assessment remains that extending leaseholder protections to below 11 metres is neither necessary nor proportionate, as I think the noble Baroness has heard many times before.

Regarding my noble friend Lord Young’s issue about enfranchised leaseholders, the Government decided that the leaseholder protection provisions in Part 5 of the Building Safety Act would not apply to leaseholder-owned buildings. That was because the freehold to the building is de facto owned by all or some of the residents who, as leaseholders, have collectively enfranchised and would still have to pay to remedy the safety defects in their buildings. However, leaseholders in those buildings, either individually or collectively, can pursue developers and their associated companies via a remediation contribution order for funds that they have spent or will spend remediating their buildings for relevant defects.

I turn to joint ownership. This Government understand that individuals are frustrated with the distinction between leaseholders who own properties jointly and those who do so independently. We are listening carefully to feedback from stakeholders on this matter. We have also published a call for evidence on jointly owned leasehold properties, which was launched on 22 March; this will enable the Government to understand the scale of the issue and consider whether any further changes can be proposed.

The noble Baroness, Lady Andrews, asked about development value. I am very grateful to her for engaging with me beforehand about this issue. I can say to the noble Baroness, as she acknowledged, that we committed to enabling leaseholders voluntarily to agree to a restriction on future development of their property to avoid paying development value as part of the collective enfranchisement claim. We are consulting on making changes to the existing permitted development right and are seeking views on whether sufficient mitigation is in place to limit potential impacts on leaseholders. I urge the noble Baroness to contribute her views to that consultation before it closes on 9 April. When it closes, the Government will carefully consider and review all the responses and see how the regime can be improved.

I was very sorry to hear of the personal difficulties of the noble Lord, Lord Campbell-Savours, when purchasing his freehold, and I hope that the reforms in this Bill will address the issues he raised. With regard to the point that he and my noble friend Lord Bailey raised on service charges, the level of service charges that leaseholders pay will depend on many factors, such as the terms of the lease and the age and condition of the building. This means that the cost of things such as repairs, maintenance of common areas and management of the building will differ considerably. The transparency and redress reforms in this Bill will empower leaseholders to take action against any unreasonable costs.

As well as speaking extensively about building safety issues, the noble Earl, Lord Lytton, made a compelling case for thinking about leasehold from the perspective of consumer protections. The Government are committed to improving consumer protections against abuse and poor service from landlords, managing agents and freehold estate managers. That is why we will set a maximum time and fee for the provision of information as part of the sales process for leasehold homes and those homes encumbered by estate management charges, and introduce rights of transparency over service charges, extended access to redress schemes and reform of legal costs. We consider that it is a powerful package of consumer rights and reforms, and, following Royal Assent, we will make sure that appropriate guidance is available for consumers. None the less, I look forward to meeting the noble Earl after Easter to discuss how this package can be further improved and well implemented.

The noble Lord, Lord Palmer, the noble Baroness, Lady Bray, and my noble friend Lord Howard asked about the Government’s policy on marriage value. Any suggestion of retaining marriage value—wholesale or in limited circumstances—would be counter to our aim of making it cheaper and easier for leaseholders to extend their lease or acquire their freehold. Such proposals would risk both perpetuating and creating a two-tier system—eroding the benefits that the Government are delivering through the Bill. Removing marriage value and hope value will deliver a level playing field and wide access for leaseholders who may otherwise find it prohibitively expensive to extend their lease or purchase their freehold. Our wider reforms to enfranchisement value will ensure that sufficient compensation is paid to landlords to reflect their legitimate property interests.

The right reverend Prelate the Bishop of Manchester spoke about the positive contribution that charities make to our society, which this Government wholly recognise. He asked specifically about exemptions from our reforms for charity. Although well-meaning, attempting to created carve-outs for specific groups of landlords—for example, charities—would complicate the system that we aim to simplify and would risk both perpetuating and creating a two-tier system. We appreciate the engagement that the right reverend Prelate has conducted with us so far and hope that we can continue that engagement on issues that we know, and he knows, are significant.

The noble Baroness, Lady Twycross, and the noble Lord, Lord Kennedy, brought up the renters Bill and assured tenancies. We are aware that leaseholders with ground rents of more than £250 per year can be legally regarded as assured tenants. In the Renters (Reform) Bill, we are addressing this problem by removing all leaseholders with a lease longer than seven years from the assured tenancy system. That Bill is progressing through Parliament, and our priority is to pass this vital legislation before the end of this Parliament.

The noble Lord, Lord Khan, brought up the issue of the Commonhold Council. The council has met regularly since it was established in 2021 and last met in September. The Government are currently reviewing the Law Commission’s proposal to reform the legal framework for commonhold and plan to reconvene the group ahead of finalising their response to the Law Commission.

If I have missed any other specific issues raised, I can only apologise. A tremendous amount has been said in this session—all of great value—and I reiterate my commitment to meeting any Member of this House who wishes to discuss the Bill further after Easter. I hope that is acceptable to the House.

The Leasehold and Freehold Reform Bill will deliver on the Government’s 2019 manifesto commitments, promoting fairness and transparency in the residential leasehold sector. I look forward to working with noble Lords during the passage of this most important Bill.

I have noted forfeiture, commonhold, the regulation of property agents, marriage value, ground rent and service charges as areas of serious interest to noble Lords, although others of equal importance have been raised. I am sure noble Lords will recognise that this is a very long list and there is little time remaining in the parliamentary Session. However, we are listening and looking carefully at what can be done on all those things.

Lord Kennedy of Southwark Portrait Lord Kennedy of Southwark (Lab Co-op)
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Before the Minister sits down, although I am frustrated about the Bill, I have great respect for her and look forward to our debates in Committee. I particularly asked about commencement, because this is a Bill of 123 clauses and 15 schedules, and only the issues on rent charges and three parts of the Building Safety Act are going to be brought into force after two months. Nothing is being brought in on Part 1, on leasehold houses, Part 2, on leasehold enfranchisement and extension, Part 3, on the rights of long leaseholders, Part 4, on the regulation of leasehold, Part 5, on the regulation of estate management, or Part 6, on redress schemes. Basically, about 95% of the Bill is not going to come into force until a date that the Secretary of State determines. As in my earlier remarks, I am a bit frustrated sometimes that what we should get from the Secretary of State does not materialise. Will the Minister write to me and be clear about when these are going to come into force? We need to know what date they are coming into force, otherwise all the promises amount to nothing.

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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I am happy to write to the noble Lord on this issue, and I will put a copy of that letter in the Library.

Bill read a second time.
Moved by
Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook
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That the Bill be committed to a Committee of the Whole House, and that it be an instruction to the Committee of the Whole House that they consider the Bill in the following order:

Clauses 1 to 7, Schedule 1, Clauses 8 to 18, Schedule 2, Clauses 19 to 29, Schedule 3, Clauses 30 to 36, Schedules 4 to 7, Clauses 37 to 44, Schedule 8, Clauses 45 and 46, Schedule 9, Clauses 47 to 68, Schedule 10, Clauses 69 to 103, Schedule 11, Clauses 104 to 108, Schedule 12, Clauses 109 to 123, Title.

Motion agreed.

Local Government Finances

Baroness Scott of Bybrook Excerpts
Thursday 21st March 2024

(1 week ago)

Lords Chamber
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Baroness Scott of Bybrook Portrait The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
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My Lords, I thank the noble Lord, Lord Shipley, for bringing forward this important debate on the current state of local government finances and the impact on local communities. I also thank all noble Lords for their considered and insightful contributions today.

The Government are clear in their support for councils—there is no decline in that support—and the vital work they do to support local residents in all corners of the country. It is important to start by recognising some of the things that are happening. In Bolton, Stoke and Wandsworth, the councils have all recently renovated or opened new library spaces to the public. In Warwick and North Yorkshire, we have seen the opening of new leisure centres in Kenilworth and Knaresborough, and in Sandwell, Knowsley and Rushmoor, levelling-up funding will deliver improved leisure centres and facilities for local residents.

The Government are committed to delivering for our towns. In October of last year, we announced the investment of £1.1 billion into 55 towns across the country, with each town receiving a £20 million endowment-style fund to invest over the next decade. This will allow our towns to develop long-term visions and to deliver change for their residents, such as the regeneration of Ashburner Street, in Bolton. Finally, in Blackpool, the central regeneration scheme is scheduled to get under way, following planning approval, with an estimated 1,000 jobs set to be created as a result.

That is only a very small sample of the achievements and developments that councils across this country have made in recent months and years, all of which have made a positive impact on their local communities. All local authorities across the country should know that we place the utmost importance on the partnership between central and local government, and recognise the crucial work they do in delivering day in and day out for our local communities.

However, as has been mentioned, the Government recognise the pressures that some places face in delivering this work. We have heard from the noble Lord, Lord Shipley, and the noble Baroness, Lady Pinnock, that we are letting it get worse. We are not letting it get worse, and I will mention more about what we have done this year to help local authorities. Many of the problems that these places face, and that we all face as a country, are driven by global economic factors and the resulting higher inflation. That is why the Prime Minister has prioritised and successfully delivered on his commitment to halving inflation. However, we are all aware that demand for key services that councils provide, and the costs of those services, continue to rise steeply as well, not least because of an ever-aging population that, quite rightly, requires increasing social care support.

In February, the Government announced the local government finance settlement for 2024-25. This settlement makes up to £64.7 billion available to local authorities next year, an increase in core spending power of £4.5 billion on last year, equivalent to 7.5% in cash terms. This above-inflation increase demonstrates that the Government are standing behind councils up and down the country and are listening to them.

We have additionally taken action to provide further support to local government to enable continued delivery while wider system reforms for social care are implemented. At the final local government finance settlement, the Secretary of State announced that we are providing £1.5 billion in additional grant for social care through the settlement for 2024-25 compared to 2023-24. Having listened to the views of local government, this includes an additional £500 million for the social care grant.

While being mindful of the level of adult care provision, where possible councils should use this uplift to invest in areas that help also place children’s social care services on a financially sustainable footing. This includes investment in expanding family help and targeting early intervention, expanding kinship care and boosting the number of foster places.

Further to this, in the Budget earlier this month the Chancellor announced £165 million to support councils to improve the quality of, and increase capacity in, residential children’s homes, so that children with the most complex needs can be cared for in a provision that meets those needs. This funding will boost local authority-run provision and, in doing so, respond to concerns that excessive profiteering—as we heard from the noble Baroness, Lady Taylor of Stevenage—and often poor quality is threatening the sustainability and outcomes of local government children’s services.

Nevertheless, we recognise that, sometimes, private placement costs are too high, and that council tax payers are stuck footing the bill. The Government’s position is that this is an issue with profiteering rather than profit. Through reforms to children’s social care, they will continue to explore what action is needed to best support councils. The Government will be developing proposals on what more can be done to combat profiteering, bring down costs and create a more sustainable market for residential placements, which they will publish later this year.

The Government recognise the significance of special educational needs pressures on councils. This is why the Spring Statement committed £105 million towards a wave of 15 new special free schools, to create over 2,000 additional places for children with special educational needs and disabilities across England. On top of this specific funding for social care and SEND, the Government have committed to a 4% funding guarantee that will ensure that all councils receive at least a 4% increase in their core spending power before any local choices on council tax, efficiencies or reserves. We have listened to the many councils and the many things they told us. They would otherwise have experienced cash losses in funding next year, and we have stepped in to prevent that.

We are committed to supporting councils wherever they are in the country. This is in answer to the issue raised by the noble Lord, Lord Hussain, about Luton. The most relatively deprived areas of England will be receiving 18% more per dwelling in available resource through the 2024-25 settlement than the least deprived areas; those councils, such as Luton and others, will be getting more. We understand that those councils have faced historic challenges in tackling deprivation. It is also why we have increased the value of the rural services delivery grant—as mentioned by the noble Lord, Lord Foster of Bath—by over 15% to £110 million, to support rural authorities dealing with the unique challenges of serving very dispersed populations. That is a second successive year of above-inflation increases for this grant.

The action we have taken to support local government in this financial settlement and beyond demonstrates our commitment to the sector. We recognise and thank those in the sector for the important contribution they make in delivering local services for their communities, up and down the country. We have worked in partnership with representatives, sector leaders and local councils, to ensure that this settlement helps to meet the needs of local government. This engagement has been a vital part of the decision-making for this settlement. When local councils speak to us, we listen, and this includes those councils that face the most significant challenges.

The Government also work closely with councils to understand the specific pressures that local government is facing. They are looking at a range of data on demand for services and the costs faced by councils. As a result of the local government finance settlement, the vast majority of local authorities will be able to set balanced budgets in 2024-25. We have published details of exceptional financial support agreed with a small number of councils, but the vast majority of this support relates to six councils where there has been severe local failure. The Government have had to step in there and take the most serious action through statutory intervention.

A small number of other councils requested financial support on an exceptional basis, due to specific local pressures that they were unable to manage themselves. We stand ready to speak to any council that has concerns about its ability to manage its finances or faces pressures it has not planned for. Our door is always open to them.

Before I conclude, I will answer as many of noble Lords’ questions as I can. If I do not get through all of them, obviously I will write. First, the noble Lord, Lord Shipley, and the noble Baronesses, Lady Hamwee and Lady Bull, brought up local government funding reform. We remain committed to updating the system in the next Parliament, and will work closely with local partners to take stock of the challenges and opportunities that they face. Of course we will consult with them before any potential funding reforms, but we talked to councils last year about any of the reforms we could make and they did not want any disruption or uncertainty at that time.

The noble Lords, Lord Shipley and Lord Hussain, brought up council tax reform. The Government continue to protect local tax payers from excessive increases. We believe that our approach strikes a fair balance and is an additional local democratic check and balance on local authorities. We are not allowing council tax to increase in place of increased funding; it is provision for a balanced package that includes a substantial increase for this coming year, as I said.

The noble Baroness, Lady Scott of Needham Market, and the noble Lord, Lord Shipley, brought up audit issues and the backlog. Local audit is vital in supporting democratic accountability and providing assurance for local people and their elected representatives. At the time of its abolition, we believed that the Audit Commission was too centralised and that it encouraged local bodies to focus more on the views of the commissioner than on local people. The Government are working with the Financial Reporting Council to tackle a significant backlog of local audits and put the system on a sustainable footing for the future.

Baroness Taylor of Stevenage Portrait Baroness Taylor of Stevenage (Lab)
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Does the Minister think it acceptable that 99% of local authorities did not clear their audits in time last year?

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Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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No, I do not. We will work with local authorities on that issue.

The Government have invested £5.5 billion on highways maintenance since 2021. In 2023, we provided an additional £200 million to fix the equivalent of 4 million potholes. In October last year, the Government announced £8.3 billion of new funding, over a 10-year period, for local road resurfacing. We are putting in extra money and not asking councils to find it in their base budgets.

My noble friend Lady Eaton and the noble Lord, Lord Shipley, brought up the Office for Local Government. Oflog aims to provide authoritative and accessible data and analysis about the performance of local government, which is important, and to support its improvement. It is still in its infancy, but its three aims are: to inform, by improving access to data; to support, by facilitating sector-led improvement; and to seek any potential failures that it can find, getting in early to support our local authorities.

The noble Baroness, Lady Hamwee, brought up the issue of local democracy and devolution. If anybody sat through the levelling-up Bill in this Chamber, they will know that devolution is at the heart of our plans to increase economic growth and level up the whole country. We remain committed to seeing more empowered and accountable local leaders to do this, who can pave the way for that growth and innovate because they know the challenges and what is best needed for their areas.

There was quite a lot of talk on planning authorities and whether local authorities should have the ability to set their own planning fees. This came from my noble friend Lady Eaton, who has so many years in local government—probably more than many of us who have a lot there. I thank her for her speech and her insight. We increased the fees considerably last year, by 38% for major applications and 25% for other applications. We have done another couple of things to help the planning sector. We have what we are calling a planning super-squad: this is an important team of senior planners who can go into a local authority that has a large or complex application and help it with the capacity and delivery issues. We hope that this will get some of our bigger planning applications away much quicker. We have invested £13.5 million in that. We have also put £29 million in a planning skills delivery fund. That is to help local planning authorities with their backlogs. We are doing a lot but, as we said on the LURB as it went through, we will not look at local authorities setting their own planning fees because we feel it might destabilise things, by having different areas with different fees across the country.

My noble friend Lady Eaton also brought up the right-to-buy receipts. At the Budget earlier this year, the Government announced increases in flexibilities available for local authorities to fund a higher percentage of the cost of replacement of affordable homes. That is taking right-to-buy sales from 40% to 50%. We hope that this will allow local authorities greater resources to allocate towards what we know is important housebuilding in the social rented sector.

The noble Lord, Lord Shipley, brought up business rates. We have ensured that all current enhanced business rate retention areas will continue for the next year. During this time, the Government will continue to review the role of such arrangements as a source of income for areas, and their impact on local economic growth and as part of the deeper devolution commitments as set out in the levelling-up White Paper.

The noble Lord also brought up council reserves. The Government consider reserves to be an important part of the resources available to local councils. Interestingly, reserves remain significantly higher since the pandemic, having risen £31.6 billion over that time, but we expect councils to use their reserves appropriately when there are pressures on them.

I am conscious of the time, so I will move to something that most noble Lords brought up, which was quite an interesting part of the debate: culture and the arts. I will ask my noble friend Lord Parkinson, the Minister for the DCMS, to read Hansard—oh, he is here; that is good timing. The debate was wider than just local government, and is something to do with the responsibilities between local and central government, so we will talk about it.

There were some interesting issues. The majority of funding that comes to local government is not ring-fenced in recognition, quite rightly, that local authorities are best placed to make local decisions. I totally agree with all the speakers that arts, culture, sport and heritage make our communities unique and vibrant. They also drive economic growth, give jobs and improve well-being. We encourage councils to reflect on the important role that these sectors play.

We have provided support for the cultural sector across the country. At the Spring Budget in 2024, the Chancellor confirmed the allocation of £100 million for local cultural projects, recognising the importance of pride for the place. This included a number of nationally significant cultural projects such as the British Library North project in Leeds and the National Railway Museum in York. Smaller amounts were also given to places that did not get levelling-up programmes, including Maldon, Erewash and North Northamptonshire, which have all been awarded £5 million of capital funding. I was also interested to hear that a new studio was announced in the north-east last week. The new north-east mayoral combined authority intends to use £25 million of flexible funding to help that scheme.

I am out of time so I close by saying that we recognise the scale of the financial pressures caused by inflation and the wider economic circumstances that have put local authorities across the country under acute strain. To address this, we have listened to the public and engaged with local authorities; this is why we have provided the substantial increase in support above inflation that this funding settlement provides. Once again, I thank the noble Lord, Lord Shipley, for bringing forward this debate and all noble Lords for their contributions. I look forward to continuing discussions with them.

Representation of the People (Variation of Election Expenses and Exclusions) Regulations 2024

Baroness Scott of Bybrook Excerpts
Tuesday 19th March 2024

(1 week, 2 days ago)

Lords Chamber
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Moved by
Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook
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That the draft Regulations laid before the House on 29 January be approved.

Relevant document: 13th Report from the Secondary Legislation Scrutiny Committee

Baroness Scott of Bybrook Portrait The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
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My Lords, if approved and made, these draft regulations will uprate the maximum campaign spending limits at the Greater London Authority and local authority mayoral elections in England to reflect changes to the value of money. This instrument also provides an exclusion for reasonable security expenses from the various election campaign spending limits. Finally, the draft regulations make some technical amendments to remove drafting that is now redundant from the Police and Crime Commissioner Elections Order 2012.

Elections rely upon the ability of political parties, candidates and other campaigners to communicate their views so that voters can make an informed decision at the ballot box. If approved by Parliament, this statutory instrument completes the package of reforms the Government announced in July 2023 to uprate reserved and excepted party and candidate spending limits and donations thresholds. This is a necessary action, as many of these statutory limits, which were set in absolute terms, have not been uprated in recent times. If we do not uprate them in line with inflation, it means that they continue to be lower in real terms, which has real impacts on campaigning.

Furthermore, no one should feel afraid to participate in our democracy. As noble Lords will be aware, in the past eight years we have witnessed the horrific murders of two parliamentarians, Jo Cox and Sir David Amess. The safety of parliamentarians and candidates is important, and in recent years the Government have introduced numerous measures to tackle intimidation in public life. It is of the utmost importance that candidates feel safe to campaign. Therefore, the Government are explicitly exempting reasonable security expenses from contributing to spending limits for political parties, candidates and other campaigners at reserved and excepted UK elections. I am pleased to confirm that this fulfils a recommendation made by the Jo Cox Civility Commission in its recent report No Place in Politics: Tackling Abuse and Intimidation.

I turn to the specifics. The draft regulations will uprate the spending limits for candidates at Greater London Authority elections and local authority mayoral elections. The various spending limits for Greater London Authority elections have remained unchanged since they were set in 2000. Due to this significant gap, the regulations will uprate the spending limits by 81.05%. This means that the limit for a candidate at an election of the Mayor of London will increase from £420,000 to £760,410, the limit for a candidate at an election of a constituency member of the London Assembly will increase from £35,000 to £63,360, and for an individual or party list candidate at the London-wide assembly election the limit will change from £330,000 to £597,460.

The draft regulations will uprate the spending limits for local authority mayoral elections in England by 29.09%. The uprating is done from 2017, to align with the new spending limits for combined authority and combined county authority mayoral elections recently approved by Parliament in the Combined Authorities (Mayoral Elections) Order 2017 (Amendment) Regulations 2024. This is to ensure parity between mayoralties and means that the limits for local authority mayoral elections in England will change from £2,362 and 5.9p per elector to £3,040 and 8p per elector.

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Lord Khan of Burnley Portrait Lord Khan of Burnley (Lab)
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My Lords, I thank the Minister for her introduction to this statutory instrument. I offer my appreciation to the noble Lord, Lord Rennard, for his eloquent speech and detailed analysis before the House today.

The Minister will be glad to know that these Benches support the implementation of Regulation 4 of the instrument. It would be wrong for expenses incurred to protect candidates, their families and supporters to be seen as part of the cost of campaigning, and it would set a dangerous precedent if candidates requiring extra security had to forgo elements of their campaign simply to feel safe. I say that as a Member of your Lordships’ House who has unfortunately faced death threats to me and my family in recent months. I totally understand the need for parliamentarians to exercise all security measures in order to do their job and serve.

This instrument stops an obvious injustice in our electoral expense law, but our response to candidates feeling unsafe cannot simply be to tell them to open their pockets and hire security. The Government must make sure that adequate resources are in place to ensure that candidates feel secure without needing to spend their own money.

I turn to another significant part of the instrument relating to the increase to election expenses in Greater London Authority elections and local authority mayoral elections. The noble Lord, Lord Rennard, dissected the issue using percentages and statistics to a profound effect. The point that election expenses have remained the same since the introduction of mayoral elections in the year 2000 has rightly been made loud and clear by noble Lords. Sadly, that figure has failed to be updated in line with inflation. It was used during the last mayoral election, 21 years after it was introduced. I understand that a significant increase is expected, given that the limit has been untouched for 24 years.

I hope that the Minister recognises why we need to ask questions about why we are raising the limit by over 80% less than two months out from the elections. The real reason why we are seeing this rise in the proposed figures is the compound failure by successive Tory Chancellors to get inflation under control. The reality is that we have seen a huge rise in inflation under this Government.

We do not intend to oppose this instrument outright, but I hope the Minister agrees that this rise does not reflect the reality that people are seeing in their day-to-day expenses. I hope she also agrees with me that future Governments should not wait until six weeks before an election to carry out an increase that is 24 years late.

The noble Lord, Lord Wallace of Saltaire, made an interesting point about election spending across the Atlantic. In 2018, after the midterm elections, I visited Capitol Hill and spoke to a Congressman. As I was congratulating him on winning his election, he said, “Well, I can’t take too many congratulations because I have to start fundraising for my next election”. This increase in the region of £19 million to £36 million is bringing money into our politics like never before. That means a lot of people are spending time fundraising when they should be serving their communities.

I hope the Minister reflects on those points and tells us when the periodic review will be for the next uplift in expenses. Will we have to wait another 24 years for a decision, or will we get told six weeks before the next set of mayoral elections? I look forward to the Minister’s response.

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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My Lords, I thank noble Lords for their contributions. They have made a number of points and I will try to respond to all of them. First, I say to the noble Lord, Lord Rennard, that I remember Andrew Pennington; I remember the case and I am really sorry. To the noble Lord, Lord Khan, I say that nothing changes, does it? The noble Lord and his family are still getting death threats, which is totally unacceptable in a country as democratic as ours.

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Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle (GP)
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My Lords, the Minister used the term “strayed into” the issue of donations, as if we were going off the subject. Will she acknowledge that the question of where the money is coming from is just as central to this statutory instrument as what the limit is?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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It is, but we already have the Elections Act, which looked at donations and the rules behind them. That part of election law is already being dealt with.

Fundraising is a legitimate part of the democratic process; we cannot get away from that. I am sorry, but the Government do not agree with the noble Baroness opposite that we should have political parties funded by government. That is not a policy of this Government, and I am not sure that it is a policy of the parties opposite.

Within our current system, while there are no caps on donations received, there are limits on what can be spent in order to maintain the level playing field—and the level playing field is the same now as it was in 2000. All reportable donations over the relevant thresholds will continue, as always, to be published online. This allows anyone to see who funds a political party and ensures that a transparent and accountable system is in place for those donations, so nothing has changed in that way.

It is important that people have the opportunity to know about their political parties’ policies. We cannot get away from the fact that that takes money. All we are doing is to ensure that the money agreed in 2000 has the same spending power this year as it had then.

The noble Baroness, Lady Bennett, brought up an issue relating to disabled people. I am sorry that I do not have an answer to that, but I will make sure I get one tomorrow. It is an important issue and I thank her for bringing that up.

I think that I have answered the noble Lord, Lord Wallace of Saltaire. This is about necessity within democracy; there has to be money to communicate one’s policies.

Lord Wallace of Saltaire Portrait Lord Wallace of Saltaire (LD)
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The Minister has used the phrase “level playing field” several times. Does she think that there ought to be something about a financial level playing field in political campaigns if we are to regain the trust of the public? If one party is able to raise such large sums—much larger than the others—then the playing field is tipped heavily in one direction.

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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At different times, different parties have raised large sums of money from different places over many years. I look at the party opposite, which has been funded by the unions over the years; I believe that I have seen quite large donations given to the Liberal Democrats too. On party donors, I think it was the noble Baroness, Lady Bennett of Manor Castle, who asked why anybody would want to give money. Some people feel very strongly and passionately about the policies of some parties—I am not talking about just ours—and that is how politics works. The level playing field is the fact that no party can spend more on one candidate in any election than the other party.

Asking why we have waited so long, as the noble Lord, Lord Rennard, did, is a reasonable question. As intended by Parliament, it is for the Government of the day to review the limits and update them when they consider that to be necessary. The fact that we had low inflation for so many years probably meant that there was no real necessity to change them as quickly as perhaps we should have done. But, as we have heard, inflation has increased in recent years and the Government decided that uprating these sums was now necessary to ensure that we get that communication out to our electorate.

I think that I have answered everything, unless anybody has something that they want to repeat. I will look at Hansard to make sure, but I think the only thing that I need to respond on is the disabled allowance question.

These regulations are essential to ensure that campaigners can continue to communicate their views to voters and, importantly, that candidates and other campaigners can feel confident in procuring the security they need at any UK elections. I hope noble Lords will join me in supporting this instrument.

Lord Rennard Portrait Lord Rennard (LD)
- Hansard - - - Excerpts

My Lords, I thank the Minister for bringing this statutory instrument before us. We have shown in this short debate that it was worthy of greater consideration than the 16 minutes which it attracted in a committee in the House of Commons. There are many important issues here and I congratulate her on single-handedly defending the Government’s position in the face of all the opposition parties this evening, which suggests that the arguments are not quite so straightforward as she might suggest.

The principal argument which the Minister made, that this instrument had to be brought forward now with such huge increases in election expenses, was not about election expenses at all. The argument here and in the other place was on the urgency of clarifying election law about security arrangements for candidates and their teams. As an experienced election agent, I would never have allowed security considerations to be part of the election expense return which I was making.

If this was necessary, it could of course be done simply on its own and with all-party agreement, but there is not all-party agreement on such huge increases and on them being made at the last minute. No satisfactory explanation is given as to why they are so large or have been made so suddenly before polling day. On all these issues where the Government are clearly changing the rules in their favour, they are abandoning the principles of the level playing field. A level playing field requires not just the same maximum limit for everyone but equal resources on each side. An army with 100 tanks against an army with one tank is not an even competition, so we do not have a level playing field of the kind which the law provided for in the 1880s and the Political Parties, Elections and Referendums Act tried to provide for in 2000.

I do not feel the need to test the opinion of the House again, when I feel that its opinion on all these issues was well tested when the noble Lord, Lord Khan, did so a few weeks ago. I note that 90% of the Cross- Bench Peers voted in support of his Motion and against the Government, so as we know the opinion of the House on this issue, I will not test it further. I beg leave to withdraw my amendment.

North East Mayoral Combined Authority (Establishment and Functions) Order 2024

Baroness Scott of Bybrook Excerpts
Monday 18th March 2024

(1 week, 3 days ago)

Grand Committee
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Moved by
Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook
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That the Grand Committee do consider the North East Mayoral Combined Authority (Establishment and Functions) Order 2024.

Baroness Scott of Bybrook Portrait The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
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My Lords, with the agreement of the Committee and its Chairman, I would like to say a few words in tribute to Paul Rowsell, who was head of the governance reform and democracy unit within DLUHC. He died suddenly on Thursday on his way to work at the age of 71. Paul had worked as the head of that unit since it was formed in 2011. Before that, he had dealt with all things to do with local authority governance since the 1990s.

Paul and I worked together on a weekly basis in the early 2000s on the Wiltshire unitary bid; he became a good friend of mine, and I hope I became a good friend of his. I will miss him terribly—including his not sitting behind me today. Paul was a wonderful public servant and he will be very sorely missed, not just by his colleagues in DLUHC but by the many people in local government whom he met and supported over the years. May Paul rest in peace.

Baroness Taylor of Stevenage Portrait Baroness Taylor of Stevenage (Lab)
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With permission, I would like to respond to that tribute. I have been in local government for nearly 30 years now, and I knew Mr Rowsell for most of that time. He was a formidable public servant, as the noble Baroness, Lady Scott, said. He was one of the great experts on local government finance—there are not many of those. Paul probably knew more about local government finance than anybody else in the country. I remember the trepidation that you would feel—I was a deputy leader of the LGA for many years—when you went into a meeting with him because you knew, however good your arguments were and however well you had been briefed by the LGA, he would pick it apart in five minutes and decimate your argument.

In spite of his tough approach to those of us who came up against him in meetings, he was very much a trusted member of the team in DLUHC and its predecessor departments—it has had many names over the years. I first encountered him way back when we were working on some of the “best value” initiatives. He was trusted, effective, incredibly knowledgeable and a consummate professional. His public service to this country in the local government department—that is what I will call it—was exemplary. I hope that he will rest in peace and that, for those who knew him personally, his memory will be a blessing. I thank him from our side of the Committee for his wonderful service to local government.

Lord Shipley Portrait Lord Shipley (LD)
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My Lords, it is deeply sad news to learn of Paul Rowsell’s death. I think back to the advice that he gave me during the passage of the Localism Act in the period of the coalition Government from 2010 to 2015. He had the ability to listen, to explain and to stay very polite, even if I was completely wrong on the issue. He had the ability to make things clear so that the understanding of those of us who were dealing with legislation was improved. It is a sad day for local government. He will be sorely missed. I appreciated his presence as part of the Bill team so many times. You knew that if Paul was leading a team, the work had been done and was of an enormously high, professional standard. It is with deep regret that we say that we will miss Paul profoundly.

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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My Lords, the purpose of this order is to implement the devolution deal agreed between the Government and seven councils across the north-east—County Durham, Gateshead, Newcastle upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland—on 28 December 2022.

We have been working closely with these seven councils. On 2 February 2024, they consented to the making of the order. The institutions that are to be abolished by the order—the two existing combined authorities and the North of Tyne Mayor—consented to the making of this order, which also provides the foundation for the deeper devolution deal for the north-east that we announced in the Budget on 6 March 2024. This trailblazing deal deepens and extends the devolution settlement in the north-east and provides new tools for the future mayor and local leaders to drive regional economic growth.

The order provides for the establishment on 7 May 2024 of the north-east mayoral combined authority, comprising as constituent councils the seven north-east councils. It simultaneously abolishes the existing North East Combined Authority and the North of Tyne Combined Authority, together with the office of Mayor for the North of Tyne. It provides for a new mayor for the whole of the north-east to be elected by local government electors across the area of the seven constituent councils with the first election to take place on 2 May 2024.

That elected mayor will take up office on 7 May with a four-year term ending after the next mayoral election in May 2028. Thereafter, there will be elections every fourth year to be held on the ordinary election day for that year—that is, the first Thursday in May. Following the enactment of the Elections Act 2022, the mayoral election will use the first past the post voting system.

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Whether we look at economic, health, education or housing data, there is clearly a great deal to do to make sure that every person in the north-east realises their full potential. Action is required as urgently as possible. So far, devolution under the current Government has been fragmented and piecemeal. To a certain extent, the north-east has been a victim of that in the past, as much as anywhere else. However, the powers and resources that are now being granted do not really touch the sides of what is required for communities to have control over their areas and their own futures. Frankly, the failure of the levelling up department to able to demonstrate effectively in any way to the Public Accounts Committee that the policies and funding the Government are allocating to levelling up are making a difference is quite astonishing after 14 years.
Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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My Lords, I thank all noble Lords—in particular, the noble Baroness, Lady Quin, and the noble Lord, Lord Beith—for their input into this because of their long experience of living and working in the north-east. We do not always get the voice of the area so it is lovely to hear it. I thank them very much for taking part.

As we have heard, this order is widely welcomed by the people of the north-east. It is a significant development for the whole area. Unifying two combined authorities into a single cohesive institution and uniting seven councils to build on a history of collaboration to shape the north-east as it has never been shaped before—or been given the opportunity to shape itself before—is a significant step in English devolution and in furthering this Government’s levelling-up agenda. We have heard that in the debate; I thank all noble Lords for supporting this move for the north-east.

I will address a few specifics. The noble Baroness, Lady Quin, mentioned culture, which is really important. As I said in my opening speech, Crown Works Studios is investing in Sunderland. Perhaps this will be the catalyst for culture, as well as for joining up culture across the north-east. I look forward to that investment, as I am sure the noble Baroness does. Other things are also being done. In Durham, £19.9 million from the future high streets fund has been granted to support the town’s culture, heritage and visitor economy. Things are beginning to come in for the cultural industries in that area; I wish them all well.

The noble Baronesses, Lady Quin and Lady Taylor of Stevenage, mentioned levelling up. Levelling-up funds have been made available to a number of individual councils. For example, in round 1, Durham got £20 million to improve transport connectivity, particularly between rural areas and around the areas of Bishop Auckland, and £20 million was given to the Gateshead Quays conference centre. Levelling-up funds, together with other government funds such as the town deals funding that I mentioned, show commitment to a large number of other investments coming to the north-east.

The noble Lord, Lord Beith, who knows the area so well, mentioned transport decisions. I quite understand his point that not all transport is covered, but this deal gives a very strong voice to the mayor and the mayor’s team when any other transport decisions are being made. On local funding, particularly for rural transport —having come from Wiltshire, I know all about rural transport and the issues it brings—this is an opportunity for the mayor, working with the individual councils, to plan that in a proper way that is efficient and effective for rural areas in the north-east. They may not get all the money, but there is a huge opportunity to change the transport systems. I encourage them to lobby hard on those decisions being made by others.

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Lord Shipley Portrait Lord Shipley (LD)
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Before the Minister sits down, can I add one thing to her list? In relation to the mayoral development corporations, she talked in terms of scrutiny and audit and said that guidance will be issued at some point—I hope sooner rather than later. However, it is not just the question of scrutiny and audit; it is also about risk. In my view, mayoral development corporations should quite separately think about their structures for assessing risk. Scrutiny tends to come slightly after an event as opposed to alongside a decision being made. Audit normally comes significantly after, in practice. It is that management of risk in a mayoral development corporation to which I think greater attention needs to be paid.

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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I absolutely agree; I think that is the same in all local authorities, however small or large. I see that as part of the overview and scrutiny. We have used “scrutiny” too often without using the word “overview” before it. I would expect that the overview, before anything is delivered, should look at the risks of delivering.

In conclusion, this order, which is strongly supported locally, is a significant step forward for the north-east, for its businesses and its communities. It is key to the future economic development and regeneration of the area, and it will enable local leaders to effectively invest in and address local priorities. I commend the order to the Committee.

Motion agreed.

Social Housing (Regulation) Act 2023 (Consequential and Miscellaneous Amendments) Regulations 2024

Baroness Scott of Bybrook Excerpts
Thursday 14th March 2024

(2 weeks ago)

Lords Chamber
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Moved by
Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook
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That the draft Regulations laid before the House on 18 January be approved. Considered in Grand Committee on 12 March.

Motion agreed.

Housing: Young People

Baroness Scott of Bybrook Excerpts
Thursday 14th March 2024

(2 weeks ago)

Lords Chamber
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Baroness Scott of Bybrook Portrait The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
- Hansard - -

My Lords, I thank my noble friend Lord Young of Cookham for bringing forward this important debate, and also for the continued passion and knowledge that he gives to this House about the sector. I appreciate his challenge, as I am sure many others in the Chamber do. This is an important debate about the needs of young people within the overall housing market and I thank all other noble Lords who have spoken today for their considered and insightful contributions.

Throughout the debate, we have heard about the challenges the younger generation of this country face in achieving home ownership, and in accessing affordable housing to rent. Securing affordable, decent and stable homes is critical to ensuring young people can meet major life milestones, move for career opportunities, and start a family. The Government are committed to delivering the warm, safe, decent and affordable housing needed to support them through their life journeys.

Young people are part of a housing market significantly different from the one experienced by previous generations. Children of home owners are over twice as likely to be home owners than children of renters—an issue raised by the noble Baronesses, Lady Donaghy and Lady Thornhill. The dependence on the bank of mum and dad, as mentioned by my noble friend Lord Attlee, to afford a home shows the difficulties in accessing the housing ladder. This is reflected in how the historic home ownership rate for those aged 25 to 34 has fallen from 51% in 1989 to 28% in 2019.

The Government have worked hard to reverse these historic trends with our long-term housing strategy. We have made huge strides since 2010 to increase home ownership, provide stability and security for those renting, and improve the quality of houses young adults own and rent. This will ultimately improve their life outcomes and quality of life. The hundreds of thousands of new homes we are delivering will create the homes young people need now and in the future. I am proud of the progress this Government have made to deliver on these priorities, but we cannot stop. We will therefore continue to press ahead in meeting these challenges.

First, almost all noble Lords brought up the planning system. We have built more homes in places young people want to live, and at prices that they can afford. Since 2010, over 2.5 million additional homes have been delivered, and the four highest rates of additional housing supply in over 30 years have all come since 2018. Increasing housing supply is at the heart of solving our housing challenges; crucial to that is reforming our planning system. Not only must we have enough homes in the right places, we must also have homes suitable for those with a range of needs, including those with disabilities and special care needs, and the vulnerable.

My noble friends Lord Young of Cookham, Lord Jackson of Peterborough and Lord Attlee raised important questions about how we are unblocking the planning system to deliver the houses that we need in the places where we need them. Building on our work since 2010, in December 2023 the Government revised the National Planning Policy Framework in response to the Levelling-up and Regeneration Act. The framework sets out the Government’s planning policies for England and how we expect them to be applied. While the Government’s standard method for assessing local housing need is used to assess the total number of homes needed in a local area, the framework makes it clear that local authorities should assess the size, type and tenure of housing needed for different groups, including young people, young people with disabilities, care leavers and students.

Government housing targets have not changed. We remain committed to our ambition to deliver 300,000 homes a year. The Secretary of State’s Written Ministerial Statement of 6 December 2022 confirmed that the standard method for assessing local housing need will be retained. The Government have made it clear that every local authority is expected to progress their local plans. If sufficient progress is not made, the Secretary of State will consider using his powers of intervention to ensure that plans are put in place. We also recently consulted on proposals to implement reforms to plan-making processes to ensure that plans are prepared in 30 months. The reason for that is that we know that local authorities that have up-to-date local plans deliver more houses.

The Government have in place a strong programme of support to upskill the capacity and capability of local planning authorities, as raised by my noble friend Lord Jackson of Peterborough. This includes a £13.5 million “planning super-squad” of leading planners and other experts that will deploy teams of specialists into planning authorities to accelerate development and a £29 million planning skills development delivery fund to help planning authorities deal with the backlog of planning applications ahead of the forthcoming changes to the planning system through the Levelling-up and Regeneration Act. To ensure that local authorities are doing everything they can to build the homes that are needed, in February this year the Secretary of State set out clear expectations for every council in England to prioritise building on brownfield developments —a key point raised by my noble friend Lord Jackson.

However, it is not enough just to build more houses. The Government are committed to ensuring that the planning system creates more beautiful and sustainable buildings and places everywhere, as raised by the noble Lord, Lord Best. The duty introduced through the Levelling-up and Regeneration Act for all local councils to produce a design code at the spatial scale of their authority area will give design codes significant weight when planning applications are determined, and the establishment of the Office for Place will support the creation of healthy, beautiful places. This Government will not compromise on quality and beauty.

Turning to housing supply, an area raised by the noble Lord, Lord Best, with regard to the 300,000 target, I recognise the significant challenges faced by the housebuilding sector in the current economic climate. The Government continue to prioritise support to the industry and local areas as part of our commitment to deliver 1 million new homes over the lifetime of this Parliament, which we are on track to deliver. This is critical in ensuring that housing across that the market is affordable—a crucial topic raised by the noble Baroness, Lady Thornhill. We are investing billions to support housebuilding and achieve that commitment, including through our £1 billion brownfield, infrastructure and land fund, and to manage different drivers of demand, such as migration—an important area raised by my noble friend Lord Lilley. Our £1.2 billion local authority housing fund is providing capital funding directly to councils. It will provide capital funding to local authorities to obtain better-quality temporary accommodation for those owed homelessness duty and to provide safe and suitable homes for those on the Afghan resettlement schemes—an extremely important point noted by the noble Baroness, Lady Valentine.

As my noble friend Lord Jackson mentioned, ensuring that we are facilitating institutional investment in housebuilding in this country is of paramount importance. The £1.5 billion Levelling Up Home Building Fund leverages institutional investment from both private capital and pensions to achieve our ambitions.

My noble friend Lord Jackson and the noble Lord, Lord Best, raised the recent Competition and Markets Authority report on housebuilding. I welcome the report. The Government will carefully consider the findings and the recommendation to formally respond to it within 90 days of publication.

I want to note where we have made substantial progress through our delivery of affordable homes, an issue raised by the noble Lord, Lord Best, in particular. Since 2010 we have delivered almost 700,000 new affordable homes, making it easier for young people to access the housing ladder. We have scaled up the delivery of affordable housing by investing £11.5 billion through the affordable homes programme, working ambitiously towards meeting our target of a quarter of a million new affordable homes.

At the same time, we have taken steps to reduce demand competition. Although the expansion of the short-term lets market has brought a range of benefits, as mentioned by the noble Baroness, Lady Donaghy, we want to ensure that housing continues to be affordable. That is why the Government have announced a mandatory national short-term lets registration scheme to provide valuable information to local authorities in supporting the application and enforcement of planning changes. The Government also introduced higher rates of stamp duty land tax in April 2016 for those purchasing additional properties.

The noble Lord, Lord Best, raised the issue of the Church of England’s report Coming Home, which argued that an ambitious approach is needed to solve the housing challenges facing this country. As he said, it was debated in detail on 24 February, when the Government set out the comprehensive long-term housing strategy in responding to those challenges.

Turning to home ownership, the Government have a robust programme of interventions. My noble friend Lord Young, the noble Lord, Lord Best, and the noble Baroness, Lady Donaghy, raised the important question of how we are making it easier for young people to buy their own home. One key programme to note, shared ownership, is a unique scheme targeted at first-time buyers. It allows young people to purchase a share of a home through a mortgage while paying rent at below-market value on the rest of the home. Over time, young people can buy more shares, until they have bought the home in its entirety. I have seen many schemes like this and how pleased young people, particularly young families, are when they feel they are getting towards owning that home of their own.

Baroness Taylor of Stevenage Portrait Baroness Taylor of Stevenage (Lab)
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Many young people who have gone into those schemes are now having incredibly high service charges imposed on them, and we need to come back to that issue when we look at the Leasehold and Freehold Reform Bill. In a case I saw today, the charge had gone up from £94 a month to over £600, and as a result that young couple cannot sell the property or afford to live in it. The colloquial term for this is “fleecehold”. We need to think very carefully about those schemes.

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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The noble Baroness is right, and I have heard similar stories. That is why we have the leaseholder Bill coming through, which we will be debating in just a few weeks’ time.

In 2022-23, of those reported to my department, an estimated 77% of shared ownership purchases were made by first-time buyers and 33% of those purchases were made by buyers under the age of 30—a testament to the effectiveness of the action of this Government. Furthermore, our First Homes scheme offers first-time buyers under the age of 40 a minimum 30% discount on the price of an eligible new home, helping the younger generation get a foothold on the property ladder. The noble Baroness, Lady Donaghy, asked for further detail on what the programme has delivered. I have only the top line, which is that there were 1,250 completions through the First Homes early delivery programme to the end of September 2023. If the noble Baroness wants more detail, she is welcome to come and ask me.

Through our lifetime ISA scheme, we have helped more than 56,000 account holders to become first-time buyers. More recently, we have recognised and responded to the challenging market conditions for lenders and buyers alike through the introduction of the mortgage guarantee scheme. This supports participating lenders to continue providing 5% deposit mortgages. We have extended this until June 2025 so that we can continue providing this vital support.

My noble friend Lord Young raised the question of stamp duty, land tax and cutting capital gains tax when landlords sell to sitting tenants. The Government have already taken action by cutting stamp duty during the pandemic, up to March 2025. This is reducing the financial burden on first-time buyers across the country, but particularly in and around London and the south-east, where these pressures are felt most acutely. On cutting capital gains tax for landlords’ sales to sitting tenants, this is not a policy the Government are currently considering. Taxation is a matter for the Chancellor and any decisions he takes on tax are considered, obviously, in the context of the wider public finances.

On the work of government on preventing homelessness and rough sleeping, as raised by the noble Baronesses, Lady Thornhill and Lady Valentine, I want to set out the measures we have prioritised to prevent vulnerable people—young people particularly—such as care leavers ending up homeless. In 2022 we published our cross-government strategy Ending Rough Sleeping for Good, which recognised that young people face particular challenges accessing and maintaining accommodation.

For young people with disabilities, my department, alongside the Department for Health and Social Care and the NHS, provides capital grant funding to subsidise the delivery of a new supply of supported housing, including for disabled people. Young people with disabilities who satisfy needs-assessment eligibility criteria and a means test benefit from a wider statutory duty to provide home adaptions. There are powers to provide adaptions for those who do not qualify under that duty. Under this Government, the disabled facilities grant has risen from £220 million in 2015-16 to £625 million in 2024-25—a more than doubling of the grant. This has been well received by disabled people.

When young people do find themselves homeless or at risk of homelessness, within the next 56 days they are owed a homelessness duty by their local authority. Our single homelessness accommodation programme will deliver over 650 homes and support services for young people in this situation. This is in addition to other support, including the £109 million top-up to the homelessness prevention grant for councils and an initial £6 million for rough sleeping winter pressures.

Many of our young people want to be free to move to places where they can connect their talents with economic opportunities before choosing to settle down. This is where the private sector steps in. Increasing security and quality in the private rented sector requires ambitious reforms and the Government have stepped up to deliver. We have introduced the Renters (Reform) Bill, which will support tenants with a raft of measures, including applying the decent homes standard to the private rented sector for the first time and abolishing Section 21 evictions. The Bill is awaiting Report in the other place, which is subject to parliamentary scheduling, and it will be announced in the usual course of business management. I say to the noble Baroness, Lady Thornhill, that the proportion of private rented sector households has remained relatively stable for nearly a decade, and the number of renters has doubled since 2004.

For those in the social rented sector, we have enshrined in law, through the Social Housing (Regulation) Act, a rebalancing of the relationship between landlord and tenant. We are ensuring that landlords are held to account for their performance—an important step in improving the quality of houses across the market, which was an issue raised by the noble Baroness, Lady Valentine. We are creating a housing market fit for the future.

The Leasehold and Freehold Reform Bill will reform the outdated leasehold system in this country. From 2025, the future homes standard will future-proof our homes, ensuring that new homes produce at least 75% less CO emissions than those built to previous standards. We know that making long-term changes takes time to deliver, and the Government are doing all they can against a challenging economic background to ensure that the younger generation can access affordable, safe and high-quality housing.

Following the £188 million allocation to the housing projects in Sheffield, Blackpool and Liverpool at the Convention of the North on 1 March, last week’s Spring Budget allocated over £240 million to housing projects in London, an area where affordability is challenging, particularly for young people, as we have heard today.

The noble Lord, Lord Best, my noble friend Lord Young of Cookham and others brought up intergenerational housing. I totally agree with them that we need better older people’s housing and more choice for older people because, if we give them better housing and more choice, we can start to move the housing stock around. Some local authorities are doing that really well, but more can be done. The Government’s independent older people’s housing task force is looking at housing for older people, and it will make its final recommendations to Ministers this summer.

I hope I have answered as much as I can—

Lord Jackson of Peterborough Portrait Lord Jackson of Peterborough (Con)
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There is consensus across the House, among Members of all parties and none, that we should reinstate the local housing targets. Nevertheless, 65 local planning authorities have frozen their local plans. Is my noble friend in a position to explain or tell the House when the Secretary of State is likely to invoke his statutory powers to force those local planning authorities to come up with local plans?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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I cannot say when he will do that; all I can say is that the Act is now in statute. The NPPF is now being updated, so we will encourage and support those local authorities to get the local plans in place as soon as possible.

I am being told I have run out of time, so, in conclusion, we fully recognise the unique housing needs of young people and the importance of homes to their lives. The Government are absolutely committed to ensuring those needs are met, whether that be through home ownership, the private rented sector or social housing. This debate has served as a valuable reminder of the critical responsibility we share in supporting the next generation and making sure that the housing market works for all. I once again thank my noble friend Lord Young of Cookham for bringing forward this debate and all noble Lords for their contributions today. I look forward to continuing discussions and working with noble Lords on issues relating to the housing needs of not just our younger generation but the whole of our communities.

Social Housing (Regulation) Act 2023 (Consequential and Miscellaneous Amendments) Regulations 2024

Baroness Scott of Bybrook Excerpts
Tuesday 12th March 2024

(2 weeks, 2 days ago)

Grand Committee
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Moved by
Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook
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That the Grand Committee do consider the Social Housing (Regulation) Act 2023 (Consequential and Miscellaneous Amendments) Regulations 2024.

Baroness Scott of Bybrook Portrait The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
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My Lords, this draft instrument makes technical, consequential and miscellaneous amendments to primary and secondary legislation following the passage of the Social Housing (Regulation) Act 2023.

For far too long, too many tenants have not received the quality homes and services they need and deserve. Social housing tenants deserve decent homes and to be treated with fairness and respect by their landlords. Where they experience problems, these should be resolved quickly. Where they have complaints, these must be listened to. On too many occasions, this has not happened, and we know that getting this wrong can, sadly, lead to tragic consequences. We cannot forget the Grenfell Tower tragedy, nor the tragic death of two year-old Awaab Ishak from prolonged exposure to damp and mould that was left untreated. These events were the catalyst for change.

The passage of the Social Housing (Regulation) Act was a landmark moment for the social housing sector. The Act facilitates the biggest change to the regulation of social housing in a decade, paving the way for the introduction of a new proactive consumer regulation regime. The proactive regime will drive up standards in social housing, with regular inspections of large landlords, new tenant satisfaction measures and stronger enforcement powers for the regulator to take action when things go wrong.

During the passage of the now Act, we made a number of major amendments, and I am thankful for the constructive input from noble Lords and the other place. A key addition was the introduction of Awaab’s law. This will help to ensure that hazards in social housing are assessed and then repaired within set timescales. The Act facilitates the introduction of new competence and conduct standards that will professionalise the sector to improve the quality of service that tenants receive. The 2023 Act also made a number of changes to strengthen the existing economic regulation regime.

To ensure that existing legislation remains accurate following the passage of the 2023 Act, the regulations contained in this instrument make several consequential amendments to relevant primary and secondary legislation. Part 1 of Schedule 1 makes consequential amendments to the Housing and Regeneration Act 2008, which are necessary in response to the provisions set out in the 2023 Act. Such changes include amendments that reflect the change to when a housing moratorium starts and the addition of new entries in the index of defined terms in the 2008 Act which signpost definitions added or amended by the recent Act.

Part 2 of Schedule 1 makes consequential amendments to other relevant legislation, including the Housing and Planning Act 2016. These changes are a consequence of provisions in the 2023 Act which make changes relating to moratoriums in the event of an insolvency, the definition of whether a registered provider is “non-profit” and what constitutes an “English body” for the purposes of who can be registered.

Part 3 of Schedule 1 makes consequential amendments to the Social Housing Rents (Exceptions and Miscellaneous Provisions) Regulations 2016 in consequence of a change made by the 2023 Act. This change relates to the definition of “community land trust”, which has been inserted into the Leasehold Reform (Ground Rent) Act 2022 by the 2023 Act.

Lastly, the regulations make two miscellaneous adjustments which correct minor errors in statute. The first removes a redundant reference to a section in the 2008 Act which was later repealed by the Housing and Planning Act 2016. The second amends a provision inserted by an SI; this change is intended to ensure consistency across the two pieces of legislation.

Although the changes I have outlined are of minor significance in themselves, they are required to ensure accuracy and consistency across the statute book following the changes made by the 2023 Act. I commend these draft regulations to the Committee.

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Baroness Thornhill Portrait Baroness Thornhill (LD)
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My Lords, as the Minister knows, this Act has been well received by all sectors concerned with social housing, and it is supported on our Benches. As she said, this is due largely to the Grenfell tragedy, but also to subsequent high-profile failures of social housing, including the tragic death of young Awaab Ishak. Let us not forget the recent deaths in temporary accommodation, which are truly shocking.

We know that the devil will always be in the detail, and we all hope that the rhetoric accompanying the Act will live up to the reality. The Minister is clearly aware that there have been several consultations since last July, when the Bill was passed, and issues have emerged, which the sector is rightly bringing to the Government’s attention in this process. It appears that the full and cumulative impact of the new changes thus far has been evidentially to expose the wide variation in the quality of provision of social housing by registered providers and councils. This was recently outlined very robustly by the deputy social housing regulator. Is the Minister confident that the new approach to inspections and the C categorisation will allow for a nuanced approach to allow those lagging behind to learn from the best and hopefully catch up, or will it be an adversarial system—a weeding out of the worst? In short, what will the approach to inspections be? I know from experience of Ofsted in schools and the CPA in local government that they can vary.

It is no surprise that there are concerns about the additional costs associated with all the changes, which I am sure the Minister will be aware of. What is in place to ensure that landlords can make progress without financially falling over, as we are seeing with some local authorities? Regrettably, we are already hearing that they are cutting back on development plans to focus on the detail of the new regime, which itself is a separate concern due to the considerable shortage of social housing. I echo the comments of the noble Baroness, Lady Taylor, with which I wholeheartedly agree. In fact, I add that I found that announcement bitterly disappointing because I believed that this Government had genuinely shaped the agenda towards a real understanding that social housing was one of the first bricks we needed to get in place to unblock the logjam and the housing crisis.

Does the Minister accept that there is also a recruitment and retention problem, highlighted and exacerbated by the professionalisation of housing management and maintenance? That is a good aspect of the Act and had cross-party support, but not surprisingly it is having an impact, as some people are jumping before being pushed—probably a good thing in some cases, I am not afraid to say, having had to do the pushing sometimes—or feel that perhaps now is the time to retire rather than go back to the classroom, but it is a very real and relevant issue.

The speed and breadth of the changes cause me to ask how confident the Government are that the sector can and will have the capacity to cope with these genuine changes.

Briefly, on the Awaab’s law changes, I thank the Minister for her detailed letter in response to my question in the Chamber and her generous offer of her time. On a tangential issue, the consultation that has just closed proposed an extension to hazards beyond mould, damp and condensation to include the 29 hazards in the—this is a bit of a mouthful—housing health and safety rating system. This has caused considerable disquiet for the National Housing Federation and the Chartered Institute of Housing, to name but two. They have given convincing reasons why this extension should be reconsidered. Does the Minister agree that it is probably best to see how the sector copes with mould and damp before extending the hazards further?

It seems that there is still much to do to clarify these changes, particularly around the regulator’s use of powers and the approach to inspections. Further clarity is needed on how the regulator will interact with other sector regulators, such as the building safety regulator and the Housing Ombudsman. This will take some getting used to. Such clarification is particularly important for tenants, who will also have an important role to play. In fact, the Act enshrines in law their rights to have a safe and decent home, to make their voices heard and to influence policy so that tenants can shape the homes they live in and the services they receive. I have a pertinent, but perhaps tricky, question. Does the Minister feel that the residents panel—I notice that it is currently recruiting new members, so the current one has not been in action for very long—is a strong, independent and influential voice for tenants or just a sounding board?

Lastly, I look forward to the day when private sector landlords are also subject to the same regime because it is long overdue and much needed.

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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I thank the noble Baronesses opposite for their support, not only today but when we were taking the Bill through, and their challenge on what could be made better. We took some of those things on board.

The noble Baronesses, Lady Thornhill and Lady Taylor of Stevenage, brought up the pressures on the sector. We totally understand them, which is why we work closely with the sector, but my view is that it is the sector’s responsibility. It is the sector’s stock. It needs to keep that stock up and its tenants deserve the very best. So, we will support the sector, but we will not stop challenging it to ensure that social housing tenants live in safe, good accommodation. That is what has come from the Secretary of State right the way through this process.

On right to buy, all I can say is that there were many pressures on the Budget this year. The percentage did not get extended but, again, we are working with the sector to see how we can make the building of more social houses, particularly by local authorities, affordable into the future. I think that noble Lords will hear more on that.

Moving on to the noble Baroness, Lady Thornhill, am I confident in the approach to inspections and learning from the best? I think learning from the best is the important thing and, yes, I am confident. I talk regularly to the social housing regulator, and it gets it and understands its role. I do not think it will go in heavy to begin with; it will allow the sector to begin to understand this important new regime. However, I think it is important that it can go in quickly if it thinks there is a particular issue to deal with and that it will do regular inspections throughout the sector in future. We will weed out the worst providers, but it is also a matter of helping them to improve and learn from the rest of the sector.

I understand the pressures on the sector, particularly for building new houses, as it has quite rightly had to put more money into making sure that the stock it has is of good quality, so there is possibly less money left for building more houses, but we have a fund of more than £11 million to do that. Housing providers are looking to use that fund continually, and we are supporting them to do that.

Recruitment and retention is out for consultation. We will listen to the sector. This was extremely important to members of the Grenfell community, in particular. They felt that their housing officers were sometimes as important as people working in social care in the council. We listened, and we found a way through that one. We also need to listen to the sector and the regulator as we move forward about the timeliness of implementing this. It is not going to be done overnight, so we will work with the sector after the consultation and listen to what it is saying on that one.

It is the same with Awaab’s law, although I am very passionate about getting Awaab’s law in place as soon as possible. I probably agree with the noble Baroness that perhaps we should start with the timings on damp and mould; that may be something we can look into further. We have only just finished that consultation. I have not seen the responses yet, so I do not want to pre-empt what will come out of that, but we will look, listen and do what we can to get that important part of the Act in place as soon as possible.

The noble Baroness also brought up the interaction between the Housing Ombudsman, the building safety regulator and the social housing regulator. In the department, I have talked many times with officials about the communication on this because it is a new regime; we want it to work and to work well for the tenants concerned. I think noble Lords will see a lot more communications with tenants about who to go to. Of course, if they have a problem, they should first go to their housing provider. We want to make sure that they do that and, if it is an individual case, go to the ombudsman, and then to the building safety regulator which will be working very closely with the ombudsman to make sure that it is picking up any themes coming out from a particular provider or group of providers. That is the way it will work, but communication to the tenants about this regime is important.

Finally, I turn to the residents’ panel. I have been to the residents’ panel, and I do not think that it is a talking shop at all. It is quite challenging. That is why we are extending them for a further year beyond just one year. What the panel says is very important not just for us as a department but for our partners, including the social housing regulator, the ombudsman and the building safety regulator. It is important to listen to the panel; it certainly tells us what it thinks.

I think that I have covered everything; I will check and, if I have not, I will write as usual. To conclude, these changes will ensure that the statute book remains accurate following the passage of the 2023 Act. This is just a small part of our wider mission to drive up the quality of social housing and ensure that all tenants are treated with fairness and respect.

Motion agreed.

Domestic Violence Refuges: Charities and Local Government

Baroness Scott of Bybrook Excerpts
Monday 4th March 2024

(3 weeks, 3 days ago)

Lords Chamber
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Baroness Donaghy Portrait Baroness Donaghy
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To ask His Majesty’s Government what support they give to charities and local government to provide places of safety for women subject to domestic violence.

Baroness Scott of Bybrook Portrait The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
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The Government are committed to ensuring that all victims receive the support they need when they when they need it. Councils in England have a duty to provide support within safe accommodation to victims and their children under the Domestic Abuse Act 2021. Since April 2021, the Government have provided more than £507 million to councils across the country, including £129.7 million for the years 2024-25. This will enable long-term commissioning decisions and give certainty to local providers such as specialist domestic abuse refuges.

Baroness Donaghy Portrait Baroness Donaghy (Lab)
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I thank the Minister for her Answer. Noble Lords may have read an article in the weekend’s press about Kate Kniveton MP, formerly a wife of a former Minister. She has experienced domestic violence, and her words cut across a lot of the debate:

“After years of manipulation and denigration, you lose your self-worth and don’t think anyone will ever believe you”.


I mention that because this issue is without class: a lot of people do not have a choice about staying at home and within the danger area. Local government is financially on its knees, and the majority of charities turn away references. What will the Government do to improve this dire situation?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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My Lords, the Government are supporting local authorities on this issue and they have given the money required, as I said. Yes, it is not good enough, so we have set up a national expert steering group, which is co-chaired by my colleague, Felicity Buchan, and the Domestic Abuse Commissioner. They will closely monitor this and have agreed a protocol to support further local authorities in meeting their duty of requirement. So, we are on the case.

Lord Laming Portrait Lord Laming (CB)
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Can the Minister make sure that that steering group gives particular attention to the children who accompany these unfortunate women? For a child to be brought up in a home where there is domestic violence is a dreadful start to life. Can special thought be given to their needs?

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Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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The noble Lord is absolutely right. I remember that, many years ago when I was in local government, children used to sit in the corner and nobody took any notice of them. Those things have changed. Of course, some victims of domestic abuse are children, in addition to the females—or males, depending on who is being abused.

Lord Porter of Spalding Portrait Lord Porter of Spalding (Con)
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I draw the House’s attention to my entry in the register of interests. Does my noble friend agree that local government needs not so much a duty as praise for what it does? Most councillors across the country take this issue very seriously: it is not something they need to be compelled to do, but something they choose to do. If we are really going to tackle this scourge, we need other parts of government to treat it as seriously as local government does. Such offenders should be dealt with much more heavily, not by the local government team but by people in 2 Marsham Street.

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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My noble friend is absolutely right, and I thank all local authorities for everything they do. Interestingly, nearly 75% of local authorities say that they are spending more and doing much more than they did a few years ago in this regard. That is great, and I thank them for what they are doing. Yes, we should be supporting them and not always knocking them.

Baroness Burt of Solihull Portrait Baroness Burt of Solihull (LD)
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My Lords, four out of 10 local authorities are facing bankruptcy within the next five years and, as the noble Baroness, Lady Donaghy, said, even statutory services, including the provision of refuges, are already being cut to the bone, despite increasing demand. Women’s Aid research found that 61% of applicants for accommodation-based refuge are being turned away. Does the Minister agree that this failure to meet increasing demand now will not only put women’s lives at risk but leave public services with even more problems to deal with down the line?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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My Lords, in the last couple of months we have given £600 million extra to local authorities because we understand the pressures they are under. We are keeping an eye on those pressures, and we encourage all local authorities which have difficulties with their budgets to talk to us early on, so that we can work with them. Local authority budgets have been increased by 7.5% this year, and as my noble friend said, local authorities prioritise domestic abuse victims in their budgeting.

Baroness Taylor of Stevenage Portrait Baroness Taylor of Stevenage (Lab)
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My Lords, I declare my interest as a founder and patron of Survivors Against Domestic Abuse. Last Thursday, my honourable friend Jess Phillips read out in the other place—as she does every year—the names of 98 women killed as a result of violence over the last year: a heartbreaking tribute to lives broken and lost to violence. After every case of domestic homicide, we are told that lessons will be learned. Does the Minister agree that providing safe spaces to live for women who flee violence—a project we started in Stevenage, and which now provides 35 homes across Hertfordshire—is vital? However, it is in serious danger of being stopped because such local authority spending is discretionary. Will she meet with me to hear more about this work?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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I would be more than happy to meet the noble Baroness to learn about that, and I thank her for everything she is doing in her county. As recently as this weekend, we heard so much about violence against women. The Home Office is taking this issue extremely seriously and a large amount of money is going into extra police training, particularly on tackling domestic abuse. Some £3.3 million has been committed over the next three years to support delivery of Domestic Abuse Matters training to police officers. Let us hope that this changes things.

Baroness Armstrong of Hill Top Portrait Baroness Armstrong of Hill Top (Lab)
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My Lords, as the Minister says, there is currently no sign of domestic abuse being overcome and things changing, and recent reviews of serious cases are really quite scary. This is not just about local authorities, which are doing a good job but are cash strapped, but charities. A number of seriously good and important charities in this arena have nearly or actually gone bust. Action against Violence and Abuse, a major charity that worked with women who had experienced violence and abuse, and which supported them in a range of ways, went out of business last month for no other reason than it could not raise sufficient funds. Will the Minster discuss this issue with other Ministers? The situation is now very serious: such charities cannot be funded to continue their work, and that will have serious consequences for the women involved.

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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The charitable sector is a really important partner in this. That has been noted in the amount of money given to police and crime commissioners to tackle this issue, part of which is spent with charities, other stakeholders and community groups. This Government have supported charities through this very difficult crisis, in particular with energy costs. We are totally committed to supporting the charitable sector on not only this issue but others, and we will do everything we can to do so because it is an important part of delivery.

Baroness Butler-Sloss Portrait Baroness Butler-Sloss (CB)
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My Lords, I declare an interest as chairman of the Commission on Forced Marriage. Will the Minister please remember that forced marriage is also domestic violence in many cases?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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I absolutely accept that. We need to keep that in mind when we look at domestic violence.

Baroness Morgan of Cotes Portrait Baroness Morgan of Cotes (Con)
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My Lords, one of the places where abusers encounter their victims is the online world. Does my noble friend agree that it is important that her department considers funding for charities offering online support to victims, including the excellent Revenge Porn Helpline?

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Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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My Lords, we always need to consider the way in which the world is moving forward. Abuse moves with it, so we must keep considering the online world as technology and people’s lives change.

Housebuilding

Baroness Scott of Bybrook Excerpts
Wednesday 28th February 2024

(4 weeks, 1 day ago)

Lords Chamber
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Lord Young of Cookham Portrait Lord Young of Cookham
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To ask His Majesty’s Government what is their response to the final report of the Competition and Markets Authority’s housebuilding market study, published on 26 February.

Baroness Scott of Bybrook Portrait The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
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We welcome the CMA’s final report, following its full market study into housebuilding. In 2022, the Secretary of State wrote to the CMA, supporting the suggestion of a full market study, the first since 2008. The Government will now take away and carefully consider these findings and recommendations, and formally respond within 90 days. The CMA’s recommendations can help industry, the Government and regulators to make sure that the market is operating effectively, and working well for consumers.

Lord Young of Cookham Portrait Lord Young of Cookham (Con)
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I appreciate that the report was published only two days ago, but it was published after the Government made significant changes to housing and planning policy. On those changes, the CMA report is very clear. It says that “significant interventions” and “further actions” are required by government if we are to address what it describes as the “complex and unpredictable” planning system, with its underresourced planning departments. The report also makes it clear that local authorities should have clear housing targets if we are to meet the demand in housing that we have just heard about. Will the Government be looking very sympathetically at these recommendations?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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As I have said, we will carefully consider all the recommendations and findings from the report. Our National Planning Policy Framework means that councils must have local plans in place to deliver more homes in the right places and of the right type that are required in that particular community. As part of the recent consultation on changes to the National Planning Policy Framework, we have committed to review our approach to assessing housing need, once the new housing projections data based on the 2021 census is released next year.

Lord Best Portrait Lord Best (CB)
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My Lords, the excellent report from the Competition and Markets Authority shows why depending on a small handful of volume housebuilders does not produce either the quantity or the quality of homes that we need. Has the Minister thought about taking off the shelf the Oliver Letwin report, which is quoted in the CMA report very favourably? It calls for development corporations with master plans and compulsory purchase powers which could take the place of some of these volume housebuilders and get what we actually deserve.

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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The noble Lord has some interesting ideas in this area, particularly about the large housebuilders, which seem to have controlled the market. That is why we are putting a lot of support into small and medium-sized housebuilders. As for the Oliver Letwin report, we will look at everything once we have got this report and when we start to work on it, and we will be bringing out further information in due course.

Lord Moylan Portrait Lord Moylan (Con)
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My Lords, is my noble friend aware that your Lordships’ Built Environment Select Committee has repeatedly found that the cost and arduousness of the planning system is a deterrent to development, particularly for small housebuilders, who have fallen from producing 40% of our homes 20 years ago to merely 10% today? Will she consider the possibility of alleviating the burden of the planning system, particularly for smaller sites, so as to make it possible for smaller housebuilders to survive and thrive?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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As I have said previously, SMEs play a critical role in housebuilding and in the housing market in this country. Through the Levelling-up and Regeneration Act, we have made changes to the planning system that will support SMEs to build more homes by making the planning process easier to navigate, faster and more predictable. The Government have recently announced policies that will support SME housebuilders, including an expansion of the ENABLE Build guarantee scheme, Homes England’s pilots of SME-only land sales and updating the community infrastructure levy guidance. So we are in the same place as my noble friend and we will be working with this sector very closely in the future.

Baroness Taylor of Stevenage Portrait Baroness Taylor of Stevenage (Lab)
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My Lords, there is a specific recommendation in the excellent CMA report regarding targets:

“More objective and effective use of targets to ensure housing need is met”


are needed. With the Government caving in to pressure from Back-Benchers in the other place and scrapping housing targets, and the developers putting profit before people’s homes, will the Government now reinstate those housing targets and make a long-term plan to deliver the homes we need, preferably in the new “new towns” that the Labour Party is promoting?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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My Lords, let me make it clear that we have delivered 2.5 million extra homes in the last 14 years. Since 2018, we have also delivered the four highest annual building numbers for 30 years, and we are on target for 1 million more homes in this Parliament. We are delivering, but we have been through an economic crisis. We are coming out of it, and we will start to build more homes in the future.

Baroness Thornhill Portrait Baroness Thornhill (LD)
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My Lords, the report highlights the now widespread practice by local authorities of the non-adoption of public amenities, such as roads and playgrounds, on all new-build estates. Does the Minister accept that councils have been pushed down this road by significant cuts to their budgets over many years? More importantly, what steps are the Government taking to reverse that trend, which has resulted in an explosion of unregulated management companies ripping off residents who are, in effect, paying twice for public facilities usually provided via council tax?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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The noble Baroness is right and, like me, she understands this system. Since about 2015, there have been more councils that are not taking control. I believe that that is about council priorities and not about money, because not all of them have. It is up to the developers and the local planning authority to agree the appropriate funding, delivery and maintenance arrangements for these public areas. That is why, through the Leasehold and Freehold Reform Bill, we are taking firm action to ensure that estate management companies are more accountable to their freeholders for how their money is spent.

Lord Lansley Portrait Lord Lansley (Con)
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My Lords, my noble friend the Minister will have observed that the CMA noted what it said was an increase in the number of snags of a serious kind that new-home buyers are encountering. In paragraph 5.123, it makes a recommendation about how the New Homes Quality Board could be the mechanism by which the new homes ombudsman service and a mandatory code for home buyers and housebuilders could be brought forward more rapidly. I wonder whether my noble friend, in her examination of the report, will respond positively to that recommendation?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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My noble friend brings up a very important point. The Government are already committed to improving redress for new-build home buyers when things go wrong. The Building Safety Act includes provision for the new homes ombudsman scheme to become statutory and to provide dispute resolution to determine complaints by buyers of new-build homes against their developers.

Baroness Bennett of Manor Castle Portrait Baroness Bennett of Manor Castle (GP)
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My Lords, the report notes that about

“60% of … houses built in 2021 to 2022 were … speculative private development”,

and acknowledges that this has widened

“the gap … between what the market will deliver and what communities need”.

Is it not the case that, to get the right home in the right place at the right price, we have to get away from this privatised model and—to address the issues the noble Lord, Lord Lansley, raised—get better quality?

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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That is exactly why the levelling-up Act made such an issue of every local authority having a local plan. That local—

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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It is no good the noble Baroness shaking her head. If you are going to have a plan-led system, which is the simplest system to navigate, you need a local plan. You need to know how many houses you need in your area, what types of houses they are and the area of land that you are going to use for housing. If local authorities have local plans, they will deliver more houses in the right place and of the right type that this country needs.

Lord Kennedy of Southwark Portrait Lord Kennedy of Southwark (Lab Co-op)
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My Lords, does the Minister agree with me that this excellent report highlights that we need to end leasehold once and for all. We have a Bill coming forward in a few weeks’ time—I can see it there in the Leader of the House’s hands—through which we could end leasehold once and for all at a date in the future and actually promote commonhold, which is what we need in this country.

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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My Lords, the House will be glad to hear that the leasehold Bill left the Commons yesterday and is now here—so I cannot wait to discuss it with the noble Lord opposite. I am sure that we will discuss all these things in great detail.

Non-Domestic Rating (Rates Retention: Miscellaneous Amendments) Regulations 2024

Baroness Scott of Bybrook Excerpts
Tuesday 27th February 2024

(1 month ago)

Grand Committee
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Moved by
Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook
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That the Grand Committee do consider the Non-Domestic Rating (Rates Retention: Miscellaneous Amendments) Regulations 2024.

Baroness Scott of Bybrook Portrait The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
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My Lords, these regulations make changes to key elements of the business rates retention system by actioning policy decisions that have already been taken. The business rates retention system has been in operation for over 10 years. Through it, local authorities keep 50% of the business rates that are collected in their areas, subject to redistribution, with the other 50% being paid over to central government.

Under the system, if a local authority sees its business rates income fall significantly in a year, it can receive protection in the form of a safety net payment. The cost of making safety net payments is met within the system. This is done by levying a percentage of the business rates income of those local authorities whose business rates income has significantly increased.

Such arrangements under the system are governed according to the underlying legislative framework. Each year we make changes to this framework in response to the wider policy environment—for example, following a revaluation or adjustments to the tax. This instrument makes the necessary amendments and, while they are technical, the reasons for them are easily explainable.

Before I go into the details of the instrument, however, I will briefly address why it was withdrawn and re-laid. Unfortunately, following the initial laying of the instrument, there was a need to withdraw and re-lay it to correct a minor error made in its drafting. We did this to ensure that payments are made to councils on the right basis. After this, we were made aware of a risk of delay to the instrument’s progress through Parliament. This could have arisen if the JCSI had queried why we had left cells in a table blank, rather than explicitly setting values at zero. In anticipation of this, we re-laid the instrument with zeros in the schedule to provide greater clarity to the reader. This will ensure that we do not delay paying local authorities what they are expecting. This instrument is the resulting version and I am grateful to all parties for their consideration in making it possible.

I will now focus on the details of the instrument. Several sets of regulations set out the detailed rules which underpin the operation of the business rates retention system. This instrument makes changes to two of them. These are the Non-Domestic Rating (Rates Retention) and (Levy and Safety Net) Regulations.

The rates retention regulations provide for the core administration of the system and determine how payments are calculated and then made between local authorities, and between local authorities and central government. The levy and safety net regulations are more particular. They set out, in detail, the safety net and levy mechanisms that I have already mentioned.

I will now describe the reasons that amendments to the regulations are necessary, as well as what they entail. First, we must make changes in response to the 2023 business rates revaluation. As many noble Lords will be aware, revaluation is a key facet of the tax, allowing for changes in the market to flow through to the amounts paid by taxpayers. The reason we need to adjust for revaluations is to avoid abrupt increases or decreases in local authorities’ funding via the business rates retention system. This would otherwise result from the aggregated change in the amounts that local authorities collect from businesses.

The actions we are taking to neutralise the impact of the 2023 revaluation can be summarised as follows. First, we are adjusting top-up and tariff figures—the figures which redistribute income around the system. Secondly, we are adjusting the calculation of levy rates; to recalculate levy rates, we must also restate local authorities’ business rates baselines. These are the share of rates income we expect a local authority to have access to.

The year 2023 was somewhat busy for the business rates retention system. Not only did the revaluation take place, but also Royal Assent to the Non-Domestic Rating Act. I am sure that many noble Lords have fond memories of the debates during its passage through the House. As with most changes made to the workings of business rates as a tax, those made by the 2023 Act impact how the business rates retention system is administered.

The delinking of the small business and non-domestic rating multipliers has the biggest impact on the retention system. Currently, the non-domestic rating—standard—multiplier is equal to the small business multiplier plus a supplement figure. From April this will change as these multipliers are delinked. This means that the two multipliers can be changed independently of each other, and therefore at different rates.

The reason for the significant impact this has on the business rates retention system is because each year we have used the change in the value of the small business multiplier to adjust key figures within the system. Under a system of linked multipliers, the change in the small business multiplier represented the change in the tax rate for all properties. As multipliers will no longer be linked, we have had to identify a new way to uprate these figures. After consultation with local authorities and other stakeholders, we will do this using a new weighted average formula. This calculates uprating figures for each local authority based on the proportion of rateable value on each multiplier in that authority’s area. The instrument applies this new formula to the relevant figures in the regulations. These are top-up and tariff figures, baseline funding levels and the City of London offset.

I have already provided a quick description of what top-up and tariff figures are. For the sake of clarity, I will do the same now for baseline funding levels and the offset. Baseline funding levels are a measure of each local authority’s need. They are uprated each year to ensure that the safety net eligibility threshold, measured as a percentage of the baseline funding level, takes account of inflationary increases. The offset, meanwhile, is a small amount of business rates income outside the system that the City retains, in acknowledgement of its high daytime, but low resident, populations. Alongside delinking the multipliers, the Non-Domestic Rating Act also introduced new or amended existing reliefs for ratepayers—specifically, heat network relief and improvement relief, and doubling the rural relief from 50% to 100%.

Furthermore, we must take account of other tax measures that were not delivered through the 2023 Act —namely, the retail, hospitality and leisure relief for 2024-25, which was announced at Autumn Statement 2023, and the green plant and machinery exemption. The Government compensate local authorities for reliefs and exemptions. If they did not, they would unfairly cost local authorities as their income from business rates would fall. However, when calculating levy and safety net payments, it is essential that we recognise that local authorities have already been compensated for their losses due to the awarding of reliefs and exemptions. Otherwise, some local authorities may receive substantial increases in safety net payments despite already receiving compensation or may underpay the amount of levy on growth that they owe. This instrument makes sure that the appropriate compensation given to local authorities is included in levy and safety net calculations.

In continuation with the theme that 2023 was a year of change for the business rates retention system, the year also saw the Government transfer the power to grant certain types of relief from billing authorities to mayoral development corporations in Hartlepool and Middlesbrough, following a request from the Tees Valley mayor. Given that authorities receive a share of business rates income in their area, authorities could lose out from the relief awarded if the mayoral development corporation took up those powers. While we have already provided for billing authorities to be compensated, now we are extending the compensation to major precepting authorities.

Lastly, we are making a change to the levy and safety net calculations for the Greater London Authority. The share of income which we will use to calculate levy and safety net payments going forward for the authority is its 20% share. This is its share under the 50% rates retention system. Using its 20% share in this calculation brings it into line with other increased rates retention authorities.

To conclude, it would not be a mischaracterisation to describe these regulations as technical. Nevertheless, they pick up wider policy changes and, in doing so, make several important updates to the administration of the business rates retention system. It is very important that these changes are made to the system so that authorities retain the income from it that they are anticipating and on which they have budgeted. I commend these regulations to the Committee.

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Baroness Taylor of Stevenage Portrait Baroness Taylor of Stevenage (Lab)
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My Lords, I draw attention to my interests in the register as a vice-president of the Local Government Association and as a serving councillor on Stevenage Borough Council and Hertfordshire County Council. I thank the Minister for her introduction to this statutory instrument and I am very grateful for her explanation of the relaying of it, which was informative.

I suppose that this instrument is necessarily complex and technical in content, but, if we look through it, we see that in many ways it demonstrates exactly how far business rates—or non-domestic rates, as we have to call them—have got from their objectives. They are intended to ensure that businesses make a contribution to the communities that allow them to thrive, to link them with the people and public services of their local area. They should recognise the differentiation between small, start-up and local businesses and the multinational corporates, when in fact non-domestic rates sometimes penalise them in inverse proportion to their ability to pay. They should also ensure that areas wishing to improve, increase or regenerate economic activity are able to vary the business rates to incentivise according to local circumstances.

Looking through the pages of mathematical formulae and complex calculations in this SI, I say that it would not be surprising if any average business doing so felt that we had somewhat lost the plot. The complexities of the system do not really benefit most councils, either, although we appreciate the funding that comes from them. For example, my borough raises over £61 million in non-domestic rates but, after all these calculations and the turning of the Government’s sausage machine, we get around £4 million of that—in spite of having three of the most deprived wards in the country.

So we need to refocus business rates back on to what they were intended to do. That is why they are part of Labour’s plan to support the vast majority of businesses in this country that are SMEs. They employ 16.7 million people and boost our economy by £2.4 trillion; they breathe life into our high streets; they deliver services that make our life easier: and they provide the goods we need to thrive. While SMEs welcomed the support they got during Covid, many of them now feel neglected as they struggle to survive the cost of living crisis, the recession and the complexities of this business rates system, which can seem utterly overwhelming, as the noble Baroness, Lady Pinnock, set out.

Labour’s plan for small businesses will be an important milestone in recognising their value to the economy and the essential role that they have in ensuring the economic growth that we need. We will undertake a fundamental reform of business rates, which will reshape this antiquated system and refocus it on business not bureaucrats’ objectives. We want to make sure that bricks-and-mortar businesses do not continue to pay disproportionately more than their online competitors. We want to take the burden from high streets and the businesses that sit at the heart of our communities, such as the local café that makes our morning coffee, the mortgage broker on our high street who went above and beyond to help you get your first home, the plumbers who come out of hours when you have water pouring through the ceiling. We want a new system that incentivises businesses to invest, rather than discourages them doing so. Our plan for business rates sits within a comprehensive plan for small business, which tackles all the issues that our many conversations with those businesses have told us are key to their future.

We had the chance to speak on the wasted opportunity to revise non-domestic rates during last year’s debates on the Bill, as the Minister said. We recognise that, for now, this technical paper is necessary to put in place the mechanism for the current system, so we will not be putting forward any formal objections, but I have some questions for the Minister. Can she comment any further on the Government’s plans to shift the current disproportionate burden of non-domestic rates taxation from small local businesses to online corporates or, potentially, on alternative forms of income for local government, including an e-commerce levy, with the funding retained by local government?

The retailers that we know and love on our high street, such as M&S, Boots, WHSmith and small, local businesses, seem to have a dramatic penalty in the business rates system over big online retailers such as Amazon. The current top-up and tariffs system is now outdated and, in view of the extraordinary cuts to which local government has been subjected, it often penalises areas of deprivation just because areas around them may be more economically vibrant. Can the Minister comment on what recent assessment has been carried out on the validity of the tariffs and top-up system?

What progress has been made on the Government’s promised consultation on business rates avoidance and evasion? The LGA, for example, has called for a review of exemptions, such as where businesses happen to be located on farms, and further clamp-downs on business rates avoidance, along the lines of those introduced in Wales and Scotland, to ensure that the rules on reliefs, such as empty property and charitable relief, are applied fairly.

The Minister knows that the LGA is also in favour of giving councils more flexibility on business rates reliefs, such as charitable and empty property relief, and the ability to set their own business rates multipliers or, at the very least, to set a multiplier above and below the nationally set multiplier. Have the Government given any further consideration to those proposals? Lastly, could she comment on the glacial speed of the appeals process, which distorts council finances and reserves, as councils often have to hold funds for not just months but years while they wait for the outcome of business rate appeals?

As I said, we understand that this instrument is necessary to move forward non-domestic rates for this year, but we hope that there is an understanding that sticking plasters, even complicated and technical ones such as this, are the problem and not the solution.

Baroness Scott of Bybrook Portrait Baroness Scott of Bybrook (Con)
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My Lords, I thank the noble Baronesses seated opposite for their contributions. A number of questions came up. First, the noble Baroness, Lady Pinnock, and, I think, also the noble Baroness, Lady Taylor, asked about complexity. We accept that the administration of the system has become necessarily complex over time in response to all the changes to policy and tax that have happened. This will be an ongoing thing. Whatever the system is, as changes happen, it becomes more complex. While every mechanism cannot be made accurate pound to pound, as the noble Baroness, Lady Pinnock, would like, we minimise the risks to the system from any major changes that would affect a local authority’s budget as much as possible. Of course, we are always happy to talk to local authorities if they feel that they have a problem with their business rates.