Universal Credit

Lord Shipley Excerpts

Thursday 16th November 2017 Lords Chamber

[Lord Shipley (LD)]

My Lords, I thank the noble Baroness, Lady Hollis, for enabling us to have this debate and for her forensic examination of the problems of universal credit. This debate is important for two reasons: first, the evidence is now conclusive that there is a major problem with the rollout of universal credit and, secondly, there is an opportunity for the Chancellor to do something about it in the Budget next week.

The evidence shows that the way universal credit is working is forcing more and more poor people into rent arrears and into greater use of food banks. The Trussell Trust has demonstrated that in those areas where universal credit has been introduced, the use of food banks has increased by nearly one-third compared with just over 10% in those places it has not been introduced. As we get closer to Christmas, those pressures will worsen.

The principles behind universal credit remain important. We need a simplified benefit system, and work should pay. However, the problems that have arisen suggest that the rollout of universal credit should be paused until those problems have been resolved. First, we have to shorten the period that recipients have to wait for their payment. It is unreasonable to make people wait for six weeks, given that they are inevitably people with few resources. Secondly, monthly payments are intended to replicate the world of work, but how many monthly-paid employees would be happy to wait for their money until at least seven days into the next month? Anyway, 10% of all employees are actually paid weekly. Why should universal credit claimants be treated differently from weekly wage earners? Thirdly, around 20% of those entitled to a full payment face delays caused by forms being incorrectly completed. Many of these people need help completing forms, and the Government have to do more by building in the availability of personal help to their standard procedures. They should not assume that everyone has the capacity to fill in the forms themselves.

I am grateful to Thirteen Housing Group, which manages nearly 33,000 properties, mostly in Tees Valley, for its advice on universal credit in Hartlepool, where full service went live last December. Its figures on housing debt are disturbing. I remind the noble Lord, Lord Farmer, that the level of debt caused by universal credit is real and not scaremongering. At the end of August this year, the average debt of universal credit recipients who were tenants of Thirteen Housing Group was £722.66, compared to an average debt of £418.92 for all Thirteen Housing Group tenants. As for the numbers of individuals affected by debt caused by universal credit, 1,008 out of 1,229 in Hartlepool—that is 82% of all those in receipt of universal credit—were in debt in August. This compares with 11,524 tenants out of more than 32,000 customers across the whole of the Thirteen Housing Group—that is 36%—who were in debt at that time.

The evidence that the operation of universal credit is causing rising debt and increasing worries to tenants is now clear for all to see. Surely the basic principle should be this: tenants need to receive the right amount of money at the right time to pay their rent and not get into arrears. I hope that the Minister will agree, when she comes to sum up, that the time has come for the Government to make reform of universal credit a priority. I hope very much that the Chancellor will do that next week.

Intergenerational Fairness in Government Policy

Lord Shipley Excerpts

Thursday 26th October 2017 Lords Chamber

[Lord Shipley (LD)]

My Lords, I too thank my noble friend Lady Smith of Newnham for enabling us to have this debate. It is a particular pleasure to follow the noble Lord, Lord Bird, and to listen to his experience, because that experience is of such enormous value to this House, particularly that relating to the prevention of poverty and ill health. I wish him very well with his campaigning.

I, too, am a baby boomer. I was born into a very different world, with very limited opportunities for travel, for example, and many more limits in terms of consumer goods and communications. I entered married life when we saved up to buy things, and we had no credit cards. I noted the comments of the noble Lord, Lord True, about the fact that we are simply in a very different world. It is not necessarily a better world or a worse world: it is simply a different world. I had the benefit of a final salary pension, which I obviously still enjoy. I went to university with my fees paid and I had a grant towards living costs. Of course, in those days, very few people went to university; these days, many people go to university, and, as we have learned, there is now a huge national debate taking place about issues of student support.

I thought that my noble friend Lady Smith of Newnham was right to say that this is a long-term issue that needs vision and inclusive thinking. I also think that the contribution of the noble Lord, Lord Willetts, was particularly important, partly because he is a member of the Intergenerational Commission. He reminded us that the equitable distribution of resources should be at the heart of government policy, and I concur with what he said. If our debate today helps that national debate, we will have done the issue a service. I emphasise that I, too, do not see the debate on this issue as being about conflict between generations. It is, rather, about being aware that today, average pensioner household incomes exceed those of non-pensioners after housing costs are taken into account. That is evidence of intergenerational unfairness.

The latest facts on housing are of great concern. In July this year, the average price of a domestic property was £226,000. It had risen by £11,000—or 5%—over the previous year. The number of new affordable homes —that is, the sum of those at affordable rent, social rent, intermediate rent and affordable home ownership—fell in England from 66,000 in 2014-15 to just 32,000 in 2015-16. The English Housing Survey tells us that, on average, households in the private rented sector had higher housing costs than those with a mortgage.

The Government have undertaken a number of measures in an attempt to alleviate some of the problems relating to housing. They have introduced Help to Buy, which was needed to help those facing high prices with limited incomes. It has helped people to buy some 135,000 properties, which in turn has helped to boost housing supply in a limited way. There is, however, also evidence that it has encouraged an increase in house prices and supported the speculative development model which results in builders paying high prices for land and subsequently land banking it. As I have said on a number of occasions, we need taxation to be levied on those who deliberately sit on land on which they have secured planning permission but not built.

The Government have undertaken a number of measures, such as the housing infrastructure fund and the homebuilding fund, which have only tinkered with the problem of demand vastly outrunning supply—for the big problem in housing is supply. The Government have published a White Paper about it and are about to publish a Green Paper on the future of social housing. Then, last weekend, the Secretary of State intervened to say that the Government should borrow more to build homes, something that these Benches have regularly called for. Although he was right to do so, the Treasury is being difficult. We therefore now have an unhelpful public disagreement within government. The Government have a problem with their commitment to build 1.5 million new homes by 2022, but it is essential that those homes get built to reduce the impact of the shortage of homes not only over that period but in succeeding years. Doing so will require public support for direct government intervention in further measures that will directly help young people.

The evidence of inequalities is becoming pretty stark. The OECD recently said that the Government have allowed regional and intergenerational divisions to worsen, leaving millions outside the south-east in low-skilled jobs. The Financial Conduct Authority has said that one person in six would not cope with an increase of £50 in monthly bills. Many of those are young. The Institute for Public Policy Research this month reported that young people were being left further behind. Half our country—many of them young—have average household wealth of £3,200, whereas the richest 10% own 45% of the country’s wealth. The International Monetary Fund said very recently that it is time to tax the rich to help the poor. I concur with that. When we read that 15 million people of working age in this country are not paying into a pension, we should be very worried.

As an example of what the Government are doing wrong, we could look at the changes made earlier this year in housing benefit entitlements for 18 to 21 year-olds, when the age of majority is 18. It is a form of discrimination as it takes money away from younger people. Let the Government build more houses by direct intervention and let us now lead a national debate to ensure that we improve intergenerational fairness and not simply think about who can secure the most votes at the next election.

Housing: Planning Laws

Lord Shipley Excerpts

Wednesday 25th October 2017 Lords Chamber

[Lord Young of Cookham]

I welcome what the noble Lord has said about the Prime Minister’s announcement on lifting the local housing allowance cap on supported housing. That is welcome. We now need to move on to an agreed model for supported housing. On planning consents, the planning system granted consent for 304,000 new homes in the year up to March this year, which is up 15%. However, the noble Lord’s point is a good one. A third of new homes granted permission between 2010-11 and 2015-16 have yet to be built. That is where we need to focus. In the Autumn Statement last year, the Chancellor announced £2.3 billion of funding for housing infrastructure. That is to be focused on those sites where we have planning consent but, for infrastructure reasons, development is not taking place. We hope that will unlock sites for 100,000 homes in areas of greatest need. On raising the cap on local authority borrowing, he will see from Hansard, in my reply to last week’s debate, that there are circumstances in which we would consider lifting the local authority borrowing restrictions.

[Lord Shipley (LD)]

My Lords, I remind the House of my interests in the register. I do not think this should be about liberalising the planning system, but rather about making the current system work better. Is the Minister aware of the very recent study by the Royal Town Planning Institute, which shows that we need more, not less, planning for getting large sites right without the delays and compromises we see so often? Does the Minister agree with that statement because, if so, there is an issue about the resourcing of planners from planning fees?

[Lord Young of Cookham]

There is indeed an issue, which is why we have decided that local authorities should be allowed to raise their planning fees by 20%, as long as the proceeds are then ring-fenced and ploughed back into the planning system. We are also looking at the so-called viability assessments, which sometimes hold up the planning process. The noble Lord will know that Ministers have powers to intervene where, for whatever reason, local authorities are dilatory in coming forward with local development plans.

Housing: Availability and Affordability

Lord Shipley Excerpts

Thursday 12th October 2017 Lords Chamber

[Lord Shipley (LD)]

My Lords, I remind the House of my vice-presidency of the Local Government Association. I thank the noble Lord, Lord Smith of Leigh, for enabling us to have this debate. It has proved to be extremely important: it could serve as a compendium for the Government of both what is wrong with housing in this country and what they should do about it.

From these Benches, my noble friend Lord Greaves reminded us that the Government have promised to build more homes but their policies have not delivered them. He also emphasised the need for greater local flexibility. He said, rightly, that the planning system is not to blame because nearly all planning applications are approved, with several hundred thousand unfulfilled permissions as we speak. He also reminded us that neighbourhood plans can build more houses than is the case with top-down planning.

My noble friend Lord Stunell reminded us that the Government want to build more homes, and I agree that they do, but he pointed out the obvious problem, which is that there is a ceiling on the number of private homes that a private builder will build without a subsidy. He also reminded us that planning is not a bottleneck, and he emphasised the importance of building on smaller sites because you build more quickly. He then asked how we build the extra homes. He said that to deliver a steady, consistent investment, we require local authorities to build more and that they can produce best value for money. He too pointed out the impact of Help to Buy on rising prices.

My noble friend Lord Stoneham of Droxford talked about the value and potential of housing associations, but he pointed out their need for certainty and continuity of policy. He raised the question of policies on rents—subsidy levels, the impact of rent levels on the ability to build more new homes and the impact of rent levels on those of modest means. He also reminded us of the problems caused by the business model of private housebuilders and the need for us to focus on and promote public/private partnerships. He too raised questions about Help to Buy.

My noble friend Lady Grender reminded us of the scourge of homelessness. She too, in the hours before the Prime Minister’s speech, experienced that burst of optimism that the Government were going to build council housing at a level not seen for a generation. However, that shows no sign of being fulfilled. She asked the Minister whether the Government would ever get to the situation where it replaced sold council houses on a one-for-one basis.

The last 20 years have seen 15 Housing Ministers and over 100 Bills affecting housing policy. Despite all that effort, we have built 100,000 homes too few every year for those 20 years. The Government admit that we have a broken housing market. In recent years, public investment in housebuilding has declined by half, when housing benefit costs have almost doubled because of the shortage of homes and rising rents. The Government need to build more homes that people can afford to live in—that should be the Government’s strategic aim.

Surely it was foreseeable that, unless action was taken to build more social homes for rent, rents, homelessness and government costs would rise. We have ended up in a situation where 20% of households in this country are in private rented accommodation. The total has risen by 1 million households in the last 10 years. The Government are still not getting to the root of the problems of housing supply, and that is because they promote owner-occupation to the exclusion of building enough homes for affordable and social rent. As an example of the problems that this causes, since 2015 the Government have overseen the sell-off of over 25,000 council homes, replacing just one in three of them.

In March this year, the Chartered Institute of Housing said:

“The government’s ambition to solve the housing crisis will not be possible if an imbalance in housing funding continues”.


The institute pointed out that just £8 billion of the £51 billion earmarked for housing up to 2021 will directly fund affordable homes. The consequences of that policy are clear.

As we have heard, there is some evidence that the Government are responding in aspirational terms to building more homes generally. They now accept that there is a housing need amounting to 266,000 homes a year for the next 10 years. My question to the Minister is: do the Government have an action plan that will deliver those homes?

The Prime Minister’s announcement at the Conservative Party conference that the Government would put in an additional £2 billion for affordable and social housing sounded better than it has proved to be. It is just one-fifth of the extra subsidy going into Help to Buy and from it we will apparently secure only an extra 5,000 homes for social rent a year. That is a very small number, which is described as “a start”, but we have known about this problem for some considerable time and we should not be in the position where we are still trying to start.

There is a value to be addressed here. I feel very strongly that someone on the living wage should be able to afford to live reasonably close to where they work. Many are not able to do so because of the cost of housing. If this is not addressed, things will only get worse. I suspect that the Government’s announcement and their Green Paper will not do much to build the volume of social homes for rent that are needed. The Government acknowledge that there is a problem but it is very hard to see how the announcement by the Prime Minister will deliver a long-term solution to the unaffordability of housing for those on low household incomes. Social housing units now stand at 4 million, whereas there were 5.5 million just over 30 years ago. Successive Governments have not replaced homes sold under right to buy. I think that we are reaching the point where local housing authorities should have the right to decide whether homes in their area are sold.

As we know, home ownership is at an all-time low. For young people under 35, over the past 15 years it has dropped from 58% to 37%. That is a huge decline which cannot be allowed to continue. We have already heard the comment that I am about to make but I agree entirely that housing needs Cabinet-level representation—it needs a higher focus in Whitehall.

In addition, housing associations and councils must be seen as part of the solution, with sustainable long-term financial frameworks for councils to build more new homes, including for supported housing, through borrowing to build against their assets. I particularly appreciated the contribution of the noble Lord, Lord Horam, who identified a blockage in the Treasury on this issue.

I think that we have to redefine the meaning of “affordable”. The noble Baroness, Lady Donaghy, explained the problem. Maybe it means about 30% or less of household income. We have heard about viability assessments not being public, and that is something that the Government have to look at. The Government too have to change the rules to ensure that public land disposal enables new homes to be built. We should not require public bodies to sell at best consideration, something that the White Paper promised. We should instead be using social return as a basis for decision-making, as well as financial return.

This debate is all about availability and affordability, and has turned into a challenge to Treasury orthodoxy. It has been a very good debate, but as we speak, homelessness continues to rise and more than a million households are awaiting a social home to rent. That is an unacceptable situation.

Local Government Finance

Lord Shipley Excerpts

Thursday 13th July 2017 Lords Chamber

[Lord Shipley (LD)]

My Lords, I should remind the House that I am a vice-president of the Local Government Association. I thank the noble Lord, Lord Kennedy of Southwark, for initiating this debate, which I think is particularly important given the absence of any mention of local government in the Queen’s Speech—a point that I will come back to. The debate gives us an opportunity to talk about the current financial crisis impacting on local government, as well as on all the people who expect and need the services that local government provides. It also gives us an opportunity to take a step back from the immediate funding crisis and take a look at the principles that should underpin local government funding after 2020.

The noble Lord, Lord Kennedy, explained the financial problems of local government very well: that is, the £5.8 billion funding gap by 2020 and the need for an additional £1.3 billion fund to stabilise the adult social care provider market. The Minister will not be surprised if I draw attention to the fact that it was not difficult for the Government to find £1 billion extra for Northern Ireland. It is broadly the same amount of money and I hope that the Government will urgently seek to solve this problem.

We need the clarity on business rate retention referred to by the noble Lord, Lord Kennedy. It was not mentioned in the Queen’s Speech. It may be that the Minister will tell us that it is going to be delivered through secondary legislation, and I hope that the matter will be clarified today. I also hope that we will hear of a commitment by Her Majesty’s Government to continue the fair funding review, which would ensure that all local councils, including poorer ones, will have enough resource to do their job properly.

We now need a national cross-party debate about the relative powers of national and local government, the consequential responsibilities that should fall on each of them, and the funding needed to deliver those responsibilities; that is, the overall funding available and the sources of that funding, be they national or local. The debate needs to be about partnership working between central and local government, based on mutual trust. I would suggest that it should not be led by slogans about excessive waste in local authorities, which today are frankly well wide of the mark.

The arrangements beyond 2020 will be a complex picture because so much in policy terms is unclear. The relationship between central and local government in terms of devolution has, as expected, become a patchwork with, for example, some combined authorities, some mayoral combined authorities, and powers in some policy areas devolved to some places but in others not devolved at all. Of course, this is what the relevant combined authorities have asked for. Broadly speaking, the level of current devolution is not really devolution at all. It might qualify as semi-devolution and it may prove to be a staging post—but, because it leaves so much power over resources with central government, it is hard to think of it as true devolution.

This picture is also complex because of the different structures in local government which can permit the duplication of overheads and occasionally conflict between tiers. Some parts of the country have unitary councils while others have two-tier structures. As the functions of local government change and budget cuts bite further, it will be necessary for councils to assess how they can reduce their overheads further, pushing ahead with, for instance, much more sharing of services—in which there are many examples of good practice.

Of course, the impact of cuts in central government support have been much greater in the poorer parts of the country, which are more dependent on the central government grant, and that has compounded the problem. Such cuts in areas of high need have become unsustainable and they no longer command public support. I would therefore urge the Government to reverse any plans they have to cut the budgets of local government even more.

I would venture to suggest that the overall crisis in funding will not be resolved until the problems surrounding adult social care are resolved, so let me start there. We need to pool budgets between the NHS and local councils. Joint but separate working is not enough; pooled working has become essential. The Dilnot review pointed to a way forward financially and I hope that the Government may still back it. I should add that I do not think it is appropriate to load the problems of adult social care funding on to council tax payers; council tax was never designed for that.

There is a crisis in local government and the reason is that it is under resourced for what it is expected to do and it is having to cut non-statutory services to pay for statutory services. There are huge stresses in policing, fire, social care and the support of children, as well as in universal services such as libraries, parks and environmental maintenance. All of this begs the question: what should happen?

First, we need to understand better what the public want. The public want greater local decision-making, so we need to be clearer about what “local” means. We used to have very small councils for a specific geographical area—often urban districts or rural districts. They had a strong local identity. There has been a tendency to amalgamate and make democratic structures bigger. The 1973 reorganisation was a case in point. Cities grew outwards and absorbed smaller neighbouring councils. But since 2010, with city deals and combined authorities, those democratic structures are getting larger. I wonder whether the time has come to look again at greater empowerment for smaller, local areas for defined services, building on towns and parishes.

In terms of money and resources, we should remember that members of the public think that they pay council tax to benefit from universal services—but, of course, it is far more complicated than that. I have come to the conclusion that we now need to address the issue of more council tax bands at the top end. That would bring in more income from council tax. I think we also have to engage much more in voluntary taxation. I am thinking in particular of expanding the role and powers of business improvement districts, many of which are now a huge success. We need to maximise the role of trusts and volunteers—the National Trust now has a role in parks in a number of councils—but I do not think that we can ever assume that they are always going to be a satisfactory replacement for public services. Councils need powers to raise other forms of taxes, too. Council tax referendum limits should be abolished and councils need greater flexibility on fees and charges, which will enable them to recover their costs, including their overheads.

There has been a lot of publicity recently about council borrowing powers. The noble Lord, Lord Kennedy, talked about the importance of councils investing in housing. He is absolutely right about that, and the removal of the cap would be a huge help. I had not realised until I read it in the Times earlier this week the extent to which local authorities are investing in commercial developments. It is one thing for people to invest in commercial developments in their own area in order to complete them; it is another for councils to become property developers. I was somewhat shocked to discover that, since 2015, councils have spent £2.7 billion on property—five times the level of the previous three years. It is almost as though something happened when the coalition Government came to an end. It is probably fortuitous, but the reasons for that fivefold increase in property deals need to be looked at, dare I suggest, by auditors—if the department is not already doing that.

I welcome the announcement by the Secretary of State of a housing infrastructure fund that will provide 100,000 new homes in sought-after areas—but, in my view, it is the responsibility of local councils to invest in their infrastructure and in housing as a priority, and not to invest in buildings sited in other local authority areas with which they have no connection.

To conclude, I understand that the Government have a problem with debt and the annual deficit, but they must now clarify how the funding gap will be addressed, their plans for business rate retention, the completion of the fair funding review and their willingness to empower councils to do more financially for themselves. It is poorer people who are suffering from the current level of cuts. I have concluded that we were right at the general election to urge a 1%—or rather 1p—increase in income tax to provide extra resource to pay for some of the services that I have been talking about. My party was right to have the courage to propose that 1p rise, of which I strongly approve.

Non-Domestic Rating (Rates Retention) and (Levy and Safety Net) (Amendment) Regulations 2017

Lord Shipley Excerpts

Monday 20th March 2017 Lords Chamber

[Lord Beecham (Lab)]

My Lords, I must first apologise to the Minister for missing the first minute of his speech; I hope it was not full of fresh information that I ought to be aware of. As far as I am concerned, and I think the same goes for my noble friend, there is no particular objection to these regulations. It is interesting, however, to hear about the proposed pilot schemes—I suspect that the good citizens of Surrey will be waiting with bated breath to see whether they will be included in the pilot scheme. Although the Minister cannot indicate the outcome of ongoing discussions with other authorities, perhaps he can tell us when a decision will be made.

Part of the problem faced by authorities, and by the Government themselves, is the delay in this revaluation—I think it should have occurred in 2015. Will the Minister tell us whether it will be possible to decide on and then stick to a regular period for revaluation? The longer the gap, the greater the impact appears to be, and that is certainly part of the current reaction.

There is also a real problem, not dealt with in these regulations, about the appeals process. The Local Government Association—I remind the House, such as it is, of my local government interests—points out that there have been more than a million appeals from business rate properties since 2010, and 200,000 of those appeals are still waiting to be decided. This has led councils to hold back £2.5 billion in reserves in case they have to meet their 50% share in respect of refunds; 50% is payable by councils and 50% is payable by the Government. The system is clearly creaking around what it is capable of resolving in relation to the appeals system. I wonder whether the Government will look at that system and at the funding that is required to be put in place when there are appeals.

Finally, one of the reactions to the announcement was to point out the strange apparent outcome that very large operations such as Amazon and Sports Direct, with their massive out-of-town sheds, get a very low business rate, whereas the shop on the corner and the pub in the middle of town pay a disproportionately high amount relative to those very large concerns. Are the Government looking at that anomaly and, if so, when will it be resolved? It certainly concerns anybody living in a city area, where business rates income will now be crucial to the services that the authorities can provide, and yet these large institutions, mainly outside urban areas, will both compete with those in our towns and cities and themselves have very little to pay by way of business rates. That anomaly should surely be addressed.

[Lord Shipley (LD)]

My Lords, I too am a vice-president of the Local Government Association.

The context of these regulations is one in which there is an increasing lack of confidence in the sustainability of local government finance over coming years. There are several reasons for this, which have been well documented. It is partly about rising demand and it is partly about reducing income. However, there is no doubt that there is simply not enough money to do all the things that local government needs to do.

Despite declining income, however, business rates have not been reducing, and they are very high in international terms. They have become a major burden for many small businesses, even for some that will gain from the revaluation. The situation has become acute for many high street shops and pubs. Competition through internet purchasing from retailers not in shopping centres and that have lower business rate bills has become a major source of concern.

It is true, as the Government keep reminding us, that this revaluation is revenue neutral overall. Three-quarters of businesses will not pay more, but that means, of course, that one-quarter will pay quite a bit more. I acknowledge that there are transitional arrangements, and they will be important. However, the revaluation still means very high bills for some.

Thirty years ago we had a local domestic tax, a local business rate and a revenue support grant from central government, with a strong needs-based element in the government grant regime. I think that that needs assessment is now in danger of being inadequately reflected in government thinking. Much has changed since business rates were nationalised almost 30 years ago, but one thing has not: need remains in both absolute and relative terms and should be fully reflected in government policy.

I draw the Minister’s attention to a comparison that I think is important, between corporation tax and business rates. Business rates raise around £28 billion and corporation tax raises around £43 billion. Corporation tax is being reduced to 17% by 2020, and in my view that reduction cannot be justified when business rates could be made lower. I think that the continued reduction of corporation tax helps bigger businesses—those that pay corporation tax—but smaller businesses that pay business rates but not corporation tax are getting a higher bill as a consequence of their exposure to business rates.

Building More Homes (Economic Affairs Committee Report)

Lord Shipley Excerpts

Thursday 2nd March 2017 Lords Chamber

[Lord Shipley (LD)]

My Lords, I first declare my vice-presidency of the Local Government Association. I strongly welcome the report of the Economic Affairs Select Committee on building more homes. I detect from the contributions this afternoon a broad unity of view about many of the conclusions of the report, which is welcome.

There have been—and reference has been made to this this afternoon—a very large number of reports in recent times on housing supply and the rising cost of housing, both for purchase and for rent. I think that the Government have finally realised that the time for just talking about the housing crisis must come to an end. I think that the White Paper is moving us in the right direction, although it does not itself provide a solution to a number of the problems affecting the housing sector. I will return to this later.

I pay tribute to the committee, of which I used to be a member, for its evidence-based report. It has been several months since it was published, but at least it has enabled the new ministerial team to examine why existing government housing policy has been failing and to adapt some of the committee’s conclusions.

We have heard a lot this afternoon about the context of rising homelessness and of homes being called affordable when they are not affordable to very large numbers of people in work. We have very high house prices when compared internationally and very high rents in the private sector. The private sector is building only around 150,000 homes a year. We have low numbers of self and custom-build homes. We have declining space standards and large numbers of planning permissions granted but not carried through. The planning system is underresourced. Reductions in social rents may have helped the Government’s finances, but they have impacted negatively on the affordability of building new social homes for rent and on supported housing. As has been pointed out, it can be difficult for local authorities to develop brownfield sites without higher levels of remediation grant.

I say to the Minister in particular that reference has been made to the sale of high-value council homes. I had hoped that, by now, the Government might have told us that that proposal had been kicked well into the long grass and would not be proceeded with. The White Paper is not helped in its intentions if the Government are to continue with their proposal to sell high-value council homes. I hope that the Minister may be able to tell us, if not this afternoon then sometime soon, that that damaging policy will cease.

The committee’s conclusion in this report is that 300,000 homes a year should be built. Reference has been made to the Government’s target of 1 million new homes by 2020, but the word “target” is incorrect. It is not a target but a commitment; it became a commitment in the last Queen’s Speech. The difficulty for the Government is that the private sector can build only half of the 300,000 homes that the committee believes are needed. So there will be a requirement on everybody else to build the additional homes that I think we now generally recognise are needed—and, be that in the Government’s figure of 225,000 to 275,000 or the 300,000 of the Select Committee, it is significantly higher than what we are building.

The committee rightly pointed out that the Government are helping those on the verge of being able to afford home ownership, whereas those who need secure low-cost rental accommodation have not been helped sufficiently. This is correct; the Government’s focus on home ownership, while valuable and important, has been too great in comparison to that on the social rented sector. The Chartered Institute of Housing has said that the Government commit only 4% of their housing budget on below market rent social housing. That 4% is simply not high enough.

The committee said, as many of your Lordships have said this afternoon, that local authorities must be incentivised to do more. They should be able to borrow using the prudential borrowing code; I entirely subscribe to that. There are ways in which local authorities are doing good things. Bristol’s new housing company is a good example of what can be done. However, while the Government will impose a new housing delivery test on local authorities, that test is mainly about planning, not building. Local authorities need greater powers over borrowing if they are to build.

Indeed, if local authorities and housing associations build more, that will reduce demand for housing benefit, which now stands at a very high level. In the interests of good public policy, it seems to me that building more homes for social rent would save on the total amount being spent by a different government department.

I was struck by the comments of the noble Baroness, Lady Wheatcroft, about the Public Works Loan Board. Of course, some local government pension funds may be investing in property for perfectly good reasons. For the rest, I would not wish to comment, not knowing the facts. However, the Minister might consider writing to all those who have taken part in this debate about the issue. It is about the future role of the Public Works Loan Board, it is about the powers of local authority pension funds to invest and what they can invest in, and it is about the powers of councils to borrow now against, first, their housing revenue account but, secondly, their general asset base. At the moment, there is not clarity about that in local government. It might help if the Government made a formal statement.

I am taken by the proposal for a senior Cabinet Minister to get more public land released. The figure has been cited that 3 million homes could be built on land that is currently publicly owned. That is a very large number. I subscribe to the view that there should be a Cabinet seat for the Housing Minister and I subscribe to the committee’s recommendation that the best-market-value rule when releasing public land should be relaxed. I shall return to that in a moment.

The Government’s proposals of an increase of 20% in planning fees will probably suffice for the time being. I have certainly been impressed by the work about new towns that the Government are now undertaking under the Neighbourhood Planning Bill, now approaching Third Reading. Useful comments were made about the National Infrastructure Commission and its role to ensure that housing is considered as part of our infrastructure.

The White Paper has some good things in it. I like the fact that the rule about the 20% starter home requirement in larger new developments has been relaxed. I like the proposals for build to rent. I like the proposals to make the affordable homes programme open to all tenures and to promote custom-build and self-build. These are all helpful, as is the housing infrastructure fund.

The problem remains finance. House prices are running at eight times average earnings, and fewer and fewer young people can afford to buy. Less than 40% of those under the age of 35 can now afford to buy, when just 10 years ago it was two-thirds. In the north-east of England, my home region, more than 70% of working renting families cannot afford to buy a new home, even with Help to Buy. Across England, that figure is 83%.

This takes me, almost finally, to land values. The planning system encourages speculation. Land is sold to the highest bidder, even by the Government. Developers can outbid other developers, then sit on the land to wait for values to rise so that they get their money back and generate profit. Where they build, they regularly succeed in getting the affordability element reduced. Unless this issue is addressed, the White Paper will not increase housebuilding by very much. I draw two conclusions.

First, we should tax undeveloped land. The committee said that powers are needed for councils to levy council tax on developments not completed within a set time. I concur with that. I also support land value taxation. It is time for the Government to review the tax system for undeveloped land. Secondly, I should like to think that public bodies, including government departments, should be prepared to sell their land at below market value to break the cycle of ever-rising prices. Treasury rules need to be re-examined because they do not work properly for the medium to long-term.

The latest British Social Attitudes survey states that 56% of people would support more building of homes in their area. That figure has doubled in the past decade. The Government have an opportunity. They should grasp the opportunity of that rising public support for home building.

Neighbourhood Planning Bill

Lord Shipley Excerpts

Committee: 4th sitting (Hansard): House of Lords
Wednesday 8th February 2017 Grand Committee

[Baroness Deech (CB)]

My Lords, I support the amendment and every word uttered by the noble Lords, Lord Kennedy and Lord Cameron. I am not exactly a drinker, let alone of real ale, even when it is warm, but living where I do I have sadly seen the onward march of more and more soulless developments. Much-needed housing—of course, there is a housing crisis—is often built contrary to the wishes of the locality and the people living there. With the march of housing, the hubs that have made living in certain parts of the country so agreeable have been lost. It is all the more important to keep the local pub, whether in a suburb or village, as more housing is added. Those pubs add to integration and help to cement a community.

I find it particularly upsetting, having participated in neighbourhood planning, that the wishes of the residents of a locality are so often ignored. It is very important, before any pub is removed or changed, that the local residents be consulted and that we all do our best to promote more integration and mixing as more housing is built, as it will continue to be in the years to come. I hope the Government will accept the amendment.

[Lord Shipley (LD)]

My Lords, I support Amendment 60 but speak to Amendment 61 in my name, which broadly reflects the amendment moved by Greg Mulholland MP in the other place a few weeks ago.

I too am grateful for the advice given by CAMRA. It has summed up the case in three lines:

“The removal of Permitted Development Rights relating to the demolition and change of use of pubs will substantially reduce the need for Asset of Community Value nominations and reduce the associated burdens on communities and business”.


There are other considerations about the rights of neighbourhoods and communities and so on, which I fully support.

The previous Government introduced the asset of community value register. It is particularly impressive that it has been reported that 2,000 pubs are now registered as assets of community value. It raises two questions: first, it could be argued that because 2,000 have been registered, the system therefore works. The other way of looking at it, which I prefer, is to say that if 2,000 pubs have been felt by their communities and neighbourhoods to need registration, that is a problem because the volume is so great. A simpler method of dealing with the problem is required.

I understand that the London Borough of Wandsworth has applied Article 4 direction in the borough. I am particularly interested in that as a solution. As I well know from having to introduce Article 4 directions in my own council in Newcastle years ago, it is a very complex procedure. Anyway, it is quite difficult to introduce Article 4 in a rural area; it suits an urban area better.

I hope the Minister will take this seriously, because we will be back to this on Report. There is a simple remedy. The amendment moved by the noble Lord, Lord Kennedy, and my amendment provide that simple remedy, which is to remove permitted development rights. If the Government did that, someone wishing to change the purpose of a pub to something else would have to apply for planning permission, which seems to me entirely reasonable. I hope that when we get to Report, the Minister will see the justification for this case.

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Moved by

[Lord Shipley]

65: Clause 14, page 13, line 13, leave out subsection (1) and insert—
“(1) Subsection (2) applies where a person (an “acquiring authority”) could be authorised to acquire land compulsorily under another enactment or under subordinate legislation.”

[Lord Shipley]

I shall speak also to Amendments 68, 72 and 73. This group is the first of several about the procedures to be followed by an authority taking temporary possession of land. Current legislation permits only permanent compulsory purchase. As an example of what I think the Government are intending, we could take the building of a bridge. There may be a permanent compulsory purchase order for the bridge itself with a temporary compulsory purchase order for the building compound to store equipment and materials for the period of the building works.

This group of amendments relates to Clause 14. Other groups will follow which address further issues around temporary possession. For the avoidance of doubt, I state that all the amendments in my name are probing amendments to help to improve and clarify the meaning of the Bill. I thank the Compulsory Purchase Association for its advice on what I shall say on this group and on later groups.

Clause 14 sets out the power for acquiring authorities to take temporary possession of land if they could otherwise be authorised to acquire interest in that land permanently, but it could also be an opportunity to codify various statutory instruments authorising temporary possession, and it may prove beneficial for powers of temporary possession—for example, for post-construction inspection and correction of minor defects—to be incorporated. Can the Minister confirm whether codification that would provide a single process for temporary possession might be introduced? Amendment 65 substitutes a new subsection which makes it clear that a single code is envisaged.

There are several government amendments in this group, but at present I think that the wording of the four amendments in my name in this group is more suited to the ambition of the proposed change. Amendment 68 contains words which may not be needed, and I would appreciate the Minister’s guidance on that. Amendment 72 clarifies and emphasises that temporary possession of land need not be taken compulsorily but can be by agreement. Perhaps that needs to be emphasised. Amendment 73 explains the rights and responsibilities of an acquiring authority and proposed paragraph (c) protects the rights of tenants, particularly where a tenant maintains an intention to resume occupation when the acquiring authority ceases temporary possession. I am very happy to listen to the Minister’s response and to look at this again when the government amendments have been incorporated in the Bill, and so I am happy to wait for Report before speaking further on this group. I beg to move.

[Lord Beecham]

My Lords, I shall speak to Amendments 69 and 75. They are pretty much self-explanatory. The former simply requires that guidance should be provided when there are temporary rights that can be granted at the same time over the same piece of land. Amendment 75 is rather more important because it provides that the section should not come into force until guidance has been published in relation to it. I assume that is the Government’s intention, and I hope they will accept that amendment.

[Lord Young of Cookham (Con)]

My Lords, the co-pilot is back in charge. I thank the noble Lords, Lord Shipley and Lord Beecham, for tabling their amendments to Clause 14. The noble Lord, Lord Shipley, made it clear that his amendment was probing. Before I move on to discuss these and the government amendments to this clause, it may be helpful if I begin with a brief description of Clauses 14 to 26, which introduce the new temporary possession power.

All acquiring authorities may need to enter and use land for a temporary period. For example, they may require land to store materials for a scheme or to provide access to a construction site, as the noble Lord, Lord Shipley, explained. The problem is that, currently, only certain acquiring authorities have temporary possession powers—for example, under special Acts which are needed for very large schemes such as the Crossrail Act 2008. Crucially, compulsory purchase orders cannot authorise temporary possession. There is no good reason for this difference, and it is unfair to those who do not have the powers. Clauses 14 to 26 seek to create a level playing field by giving all acquiring authorities the same power to take temporary possession of land. It may also be in the interests of those on the receiving end of a CPO to have the possibility of being deprived of their land temporarily rather than permanently.

In giving acquiring authorities this power, we shall ensure that those whose land is taken are fairly compensated and that there are appropriate safeguards in place to protect their interests. That is set out in Clause 19. For example, temporary possession will have to be authorised in the same way as compulsory acquisition. Also, in certain circumstances, owners and occupiers will be able to require the acquiring authority to acquire the land permanently instead of occupying it on a temporary basis, if that is what they want.

Government Amendments 66, 67, 70, 71, 74 with Amendments 105 and 106 and amendments to other clauses, which I shall deal with later, remove the requirement for the temporary possession to be linked directly to a scheme for the acquisition of other land either by compulsion or agreement. Decoupling is the word that the professionals have been using. The reason for this change is that there may be situations where an acquiring authority needs to take only temporary possession of land. For example, an acquiring authority may need temporary possession of land for a contractor’s compound when they have been able to buy all the land needed for their scheme by agreement, or they may need access to land temporarily to maintain a highway. That is the impact of some of our amendments.

Government Amendments 105 and 106 are consequential on Amendment 66; they simply remove definitions of terms that are no longer required. Non-government Amendments 65, 68 and 72, which were tabled by the noble Lord, Lord Shipley, also seek to remove the requirement for the temporary possession to be directly linked to a compulsory acquisition scheme. I hope, therefore, that he will agree they are unnecessary in the light of the Government’s amendments.

On Amendment 69, tabled by the noble Lords, Lord Beecham and Lord Kennedy, I agree with the noble Lord that we need to ensure that the interests of leaseholders are adequately protected in introducing this new power. However, I believe that that amendment is not needed, because we have already built in a safeguard which would deliver the same outcome that is requested, but in a more flexible way.

Amendment 69 would restrict the temporary possession power so that it could never be used when a leasehold interest would have less than a year to run after the land was handed back, even if that was the preference of the leaseholder, the freeholder and the acquiring authority. It sounds counterintuitive to prohibit that. The effect of this amendment would be that, if the land was essential to the delivery of the scheme, the acquiring authority would instead be driven to exercising the more draconian power of compulsory acquisition of the land permanently. However, as I have said, we have already built in a safeguard for leaseholders, which I believe will achieve the outcome that noble Lords are seeking. The safeguard is in Clause 17(3), which allows leaseholders to serve a counternotice preventing the acquiring authority taking temporary possession of the land. On receipt of the counternotice, if the land is essential to the delivery of the scheme, the acquiring authority can proceed as if the land were subject to compulsory acquisition and take the land permanently. In these circumstances, the leaseholder would, of course, be compensated for both the value of his lease and losses caused by reason of being disturbed from possession of the land taken. I believe this is a neater solution, which gives leaseholders the flexibility to decide what is right for them.

Amendment 73, tabled by the noble Lord, Lord Shipley, seeks to clarify what will happen when a tenant’s land is subject to compulsory purchase. As government Amendment 103 seeks to do the same thing—although our approach is different—I will speak to both amendments together. Government Amendment 103 provides that the terms and obligations under the tenancy, with the exception of the payment of rent and the length of the tenancy, will be disapplied to the extent that the temporary possession prevents reasonable compliance with them. Any expenditure which a leaseholder incurs as a result of the temporary possession would be claimed back from the acquiring authority. The noble Lord’s amendment, in contrast, provides that all the terms and obligations are unenforceable for the period of temporary possession.

The reason we have disapplied the terms and obligations only to the extent that the temporary possession prevents reasonable compliance with them is that there may be circumstances in which only a small part of land subject to a lease is also subject to temporary possession. In these situations, there may be no easy way in which to separate out the terms that relate to the land subject to temporary possession from terms that relate to the remainder of the land.

The second point of difference is the exclusion of the payment of rent and the length of the tenancy. We have done this because, again, where only a small part of a tenant’s land is required, making these terms unenforceable could result in a tenant having to pay an uncertain portion of the rent for the land not subject to temporary possession. The loss that would be compensated is not the rent payable for the existing lease, but any rent payable for alternative premises, as that is the loss that has been caused. Under the Government’s amendment, responsibility for paying the rent for the land under temporary possession remains with the tenant. However, the tenant will be entitled to claim compensation from the acquiring authority in relation to any expenditure which a leaseholder reasonably incurs as a result of the temporary possession.

The other point of difference with the noble Lord’s amendment is to do with proposed subsections (4) to (6), which make provision with regards to those who have protected tenancies under the Landlord and Tenant Act 1954. Occupiers with such a protected tenancy have a right to apply for the grant of a new tenancy, provided they remain in occupation. However, if their land is subject to temporary possession they will no longer be in occupation and will lose this right. Government Amendment 103 and non-government Amendment 73 both seek to preserve this right to renew the tenancy. However, in doing so, the government amendment imposes a requirement for the tenant to confirm in writing to both the landlord and the acquiring authority that they intend to resume occupation after temporary possession. I think it is clear that both amendments are after the same thing: greater clarity for tenants and landlords as to what happens during the temporary possession period, including the treatment of rent.

Finally, in this group, I will respond to Amendment 75, tabled by the noble Lord, Lord Beecham. The noble Lord made a very valid point, which I entirely agree with, that where the Government intend to provide guidance on the use of a new power, that guidance should be available by the time the provisions come into force. That is, of course, the Government’s intention. The particular element of the temporary possession provisions that the noble Lord has identified is in Clause 15(3)(a), which will allow both temporary possession and compulsory acquisition powers to be obtained concurrently for the same piece of land.

Although this so-called doubling-up of temporary and permanent powers can be authorised, it will not give acquiring authorities carte blanche to double up in all cases. It would not be fair to claimants if there was not a very good reason for an acquiring authority to make an order which included this doubling-up. It would not be wise to anticipate precisely what might be in the guidance at this point, but as I have just said, there would be a high bar to justify doubling-up. The most likely circumstances would be linear transport projects where the final design is not complete by the time compulsory powers are obtained. We know of a handful of orders in the last dozen years where this has been authorised, such as the Docklands Light Railway and the Nottingham tramway.

As for compulsory acquisitions, each case would be considered on its individual merits at a public inquiry before an inspector, and considered by the relevant Secretary of State, before a decision was made whether doubling-up was justified in the public interest.

I hope that I have been able to reassure the noble Lord, Lord Beecham, with a firm undertaking that the Government will be seeking views on the draft guidance and will publish it before these provisions come into force. I apologise to the Committee for a somewhat lengthy oration on these amendments, but there are quite a few of them. When the time comes, I will move government Amendments 66, 67, 70, 71, 74, 103, 105 and 106. In the meantime, I ask the noble Lord to withdraw Amendment 65 and for noble Lords not to press Amendments 68, 69, 72, 73 and 75.

[Lord Shipley]

I am grateful to the Minister for his reply. I draw his attention to two facts. First, the Government have brought 34 amendments for consideration this afternoon, this Bill having passed in the other place. Secondly, some of them were tabled quite late, and after I tabled my amendment. I understand the need for all this to be brought together for Report, so I beg leave to withdraw the amendment.

Amendment 65 withdrawn.

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[Lord Young of Cookham]

My Lords, we now move to the second group of amendments on temporary possession. Clause 15 deals with the procedure for authorising temporary possession of land, requiring it to be authorised by the type of authorising instrument that would be required for the permanent acquisition of land—for example, a compulsory purchase order.

Government Amendments 76 to 79 remove redundant wording in Clause 15(2) as a consequence of government Amendment 66 to Clause 14(1). Government Amendments 80 to 82 amend Clause 15(3) to clarify that the same land may be subject to both temporary possession and compulsory acquisition powers concurrently. We debated the need for guidance relating to the clause a moment ago on Amendment 75, tabled by the noble Lord, Lord Beecham, so I shall not repeat what I said about that. Government Amendments 83 to 85 and 87—the last also, happily, endorsed by the noble Lord, Lord Shipley—all remove redundant provisions in the context of the previous amendments. For example, Amendment 87 refers to “relevant land”: this is no longer needed because the concept of relevant land is removed by Amendment 66. I beg to move.

[Lord Shipley]

My Lords, Amendment 86 is in my name, and I want to ask the Minister a question. Clause 15 sets out the procedures for authorising temporary possession. It is not clear from the clause whether it is intended that there be a time limit for the life of a temporary power—for instance, three years for service of a notice post the confirmation of a compulsory purchase order. Do the three-year and five-year standards for compulsory purchase orders in statutory instruments apply, and does the power apply to post-construction maintenance during a defect period?

The Government’s amendments to remove superfluous words are helpful. I am not sure whether Amendment 87, which deletes subsection (7), is right—I am having second thoughts about it. I think it is right, but as the relevant land is the land required for the scheme, it seems appropriate to make it clear that temporary possession can be taken after action to secure the land required permanently. I would be grateful for the Minister’s comment.

[Lord Young of Cookham]

I may need to write to the noble Lord, Lord Shipley, about the specific issue he has raised on Amendment 87 and subsection (7) relating to relevant land. As I said, this is no longer needed, because the concept of relevant land has been removed by Amendment 66, with which we have just dealt. However, I will make some inquiries following his representations.

The noble Lord, Lord Shipley, has proposed in Amendment 86 that Clause 15(6) should be omitted. This is intended to be helpful clarification. It confirms that the authorising instrument—for example, a CPO—does not need to include the dates for any particular period of temporary possession. It would be difficult for an acquiring authority to do that, because it would not know the date of the confirmation at that stage. The cross-reference to Clause 16 points users to the provisions which specify the dates of temporary possession. The Government believe that there is no need for users of this legislation to be deprived of this clarification. He also asked a question about whether CPO powers would expire after a certain period. Again, I will write to him about this when I have made some inquiries. In the meantime, I hope that he will not move his Amendment 86.

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[Lord Kennedy of Southwark]

My Lords, I am aware that I have tabled a number of amendments to this section of the Bill. I am also aware that some detailed discussion has taken place outside the Chamber. I am generally content that we are moving in the right direction and do not intend to delay the Committee for long.

We welcome the statutory framework for dealing with temporary possession. Amendment 88 seeks to make it clear that an acquiring authority may serve one or more notices under the clause. I was concerned that that was not very clear from where we stand at the moment. I would like to hear a response from the noble Lord, Lord Young of Cookham, in respect of this amendment. I beg to move.

[Lord Shipley]

My Lords, I shall speak to Amendments 89, 91, 92, 93 and 94 in my name. These five amendments relate to Clause 17, which makes provision for a person affected by temporary possession to serve a counternotice to limit the total period which the temporary possession can last to 12 months in the case of a dwelling and six years in any other case. Leaseholders can also serve a counternotice providing that the acquiring authority may not take temporary possession. Having received the counternotice the acquiring authority must decide whether to accept it, withdraw the notice or proceed to take the land permanently.

As drafted, Clause 17 seems unnecessarily complex. The hope is that the Government might be able to simplify it without losing any of its statutory force. Regarding Amendment 89, Clause 17 applies wherever an acquiring authority gives notice of intended entry on to land for a temporary period to a person who is either the freeholder of the land affected or a leasehold owner. The clauses that follow seem to have a different counternotice procedure, depending on whether it is a freeholder or a leaseholder. So in connection with Amendment 89, is there a need to distinguish between leaseholders and freeholders? This amendment and the consequential amendments seek to avoid that and therefore to simplify the clause.

Amendment 91 refers to Clause 17(3), which allows a leaseholder to give the acquiring authority a counternotice to prevent it taking temporary possession of the land. It appears that this right is not available to freeholders, who can serve only a counternotice limiting the period of temporary possession. Surely, this right should be available to freeholders. This amendment therefore seeks to clarify the matter by stating:

“The owner may give the acquiring authority a counter-notice which provides that the authority may not take temporary possession of the owner’s interest”.


We then have consequential Amendments 92, 93 and 94. Clause 17(10) states that nothing in that clause,

“prevents an acquiring authority acquiring land compulsorily after accepting a counter-notice or withdrawing a notice of intended entry”.

My question is: should a permanent acquisition be available for temporary land unless a counternotice has been served requiring a permanent rather than temporary acquisition? Clause 17(8) is relevant in this respect. Amendment 94 would therefore leave out lines 38 to 40 on page 15. The concern is that landowners could potentially face a period of six years of temporary possession with the acquiring authority then deciding to acquire the land permanently. In the interests of fairness, the land should surely have been acquired permanently in the beginning. Scheme promoters should know how they wish to use the land and whether it needs to be permanently acquired from the outset.

[Lord Young of Cookham]

My Lords, I thank the noble Lord, Lord Kennedy, for tabling his Amendment 88. I appreciate that his aim in doing so was to make things clearer, an ambition which I fully support. However, on this occasion I do not think that an amendment is necessary because subsection (7) provides that Clause 16 must be complied with,

“in relation to each subsequent period of temporary possession”.

That makes it clear that acquiring authorities can serve more than one notice. Having said that, this is the sort of thing that could usefully be covered in guidance. We will update our compulsory purchase guidance in light of the reforms in the Bill, and in the light of what the noble Lord has said, I will ask for this matter to be looked at again.

Amendments 89 and 91 to 93 deal with the counternotice provisions in Clause 17. These provisions are an improvement on the current temporary possession regimes, which have no counternotice procedure in them. I thank the noble Lord, Lord Shipley, for tabling his amendments. No one would be keener than I to simplify all this, if it were possible so to do. I doubt whether it would be realistic wholly to redraft this clause between now and Report but I endorse his sense of direction. He is quite right to say that there is a difference between the treatment of leaseholders and that of freeholders. This is because the Government believe that there could be a greater impact on leaseholders than freeholders when their land is subject to temporary possession, as the leaseholder may be left with a useless lease at the end of the temporary possession period—for example, when there is only a short period left to run on the lease. We considered this in debate on Amendment 69.

Clause 17(3) affords leaseholders additional protections in these circumstances by giving them the option to serve a counternotice, as the noble Lord, Lord Shipley, said, providing that an acquiring authority cannot take temporary possession of their land at all. However, no such issues arise for freeholders. The justification for the temporary possession of the land will have been carefully considered on its individual merits at a public local inquiry before an independent inspector and confirmed only where it is in the public interest.

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Moved by

[Lord Shipley]

95: Clause 19, page 16, line 8, leave out “injury the claimant sustains as a result” and insert “damage the claimant sustains as a result of the temporary possession of the land”

[Lord Shipley]

My Lords, in moving Amendment 95, I will also speak to Amendments 96, 97 and 102. Clause 19 makes provision in respect of the payment of compensation to those who suffer loss or injury as a result of the exercise of powers of temporary possession, but there are concerns about a number of subsections in the clause. Amendment 95 addresses Clause 19(2), which provides a person—the “claimant”—with an entitlement to compensation in respect of,

“any loss or injury the claimant sustains as a result”.

I have two points here. First, would it not be better to replace “injury” with “damage”? Is there a legal reason why the word injury is used? Damage is of course more wide-ranging. Secondly, should the subsection be redrafted to make it clear that the loss or damage—or perhaps injury—must have been sustained as a result of the temporary possession of the land? The amendment would bring the drafting into line with the usual form adopted in clauses relating to compensation for the temporary possession of land, which typically state that the loss, injury or damage must have resulted from the exercise of the powers—I refer in particular to the Crossrail Act 2008. In addition, are those subsections still needed, given that other amendments are being proposed?

Amendment 97 refers to Clause 19(7), which is intended to clarify that, for the purposes of the statutory limitation period, time will not begin to run until the expiry of the last day of the temporary possession period. I understand that the Bill originally sought to achieve this objective by stating that a “claim for compensation” would “accrue on the last day of the temporary possession period”. The Compulsory Purchase Association’s view is that the original drafting would have caused problems, but that the revised drafting is not complete. The original drafting would have left claimants exposed to a potential argument that, because the claim was stated not to accrue until that time for the purposes of Section 9 of the Limitation Act 1980, they also had no cause of action enabling them to claim for compensation or refer the matter to a tribunal at any earlier time. Thus, in cases where temporary possession is to last a number of years, it could result in claimants having to bear losses without compensation for a number of years, which seems unfair.

The government amendment is intended to address that problem, but it may still permit an argument that, if the cause of action is to be treated as accruing on the last day of the temporary possession period for the purposes of the Limitation Act, notwithstanding that it would otherwise be regarded as accruing before or during the temporary possession period, the cause of action should also be regarded as accruing at that later time for other purposes, including the making of a claim or reference.

The advice that I have received is that an addition should be made to the subsection to confirm that the deemed accrual applies for the purpose of the Limitation Act alone. As such, I am advised that my drafting for Clause 19(7) helps to avoid doubt. The amendment states:

“for all other purposes a claim will accrue as the possible damages suffered as a claimant is not precluded from making a claim pursuant to subsection (2) prior to the last day of that period”.

I understand the complexity of this, and that the Minister may want to respond in writing; the 34 government amendments this afternoon reveal that this is a complex matter. I am not necessarily looking to the Minister to reply to this now. I just hope that before we get to Report, the matter can be clarified so that we have a Bill that is clear in its meaning and will not end up being challenged in the courts. I beg to move.

[Lord Beecham]

My Lords, speaking as a lawyer, although happily not practising, I see no need to amend the term “injury” to “damage”. Legally, injury embraces damage of all kinds. I would not go to extremes to defend the Government on this or any other occasion, but if the Minister felt disinclined to accept the amendment, I would not dissent from his judgment.

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Amendments 101 and 102 deal with the same subject. Government Amendment 101 makes clear that interest will accrue for each separate head of claim from the day after the last day on which that particular loss or injury occurs. This is fairer to claimants than treating all loss and injury as a whole. Amendment 102, tabled by the noble Lord, Lord Shipley, would mean that claimants could be entitled to interest on outstanding payments of compensation for losses that had not yet been incurred. In our view, that would be unfair to acquiring authorities, but I accept with alacrity his suggestion that I should pursue this matter further with him in correspondence.

[Lord Shipley]

I am grateful for the Minister’s clarification of that and look forward to further discussion and any correspondence that may help us reach Report with absolute clarity about what we are dealing with. I beg leave to withdraw the amendment.

Amendment 95 withdrawn.

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Moved by

[Lord Shipley]

107: Clause 27, page 21, line 24, after “scheme” insert “(or the prospect of the scheme)”

[Lord Shipley]

Clause 27 relates to the no-scheme principle. In moving Amendment 107, I wish to speak also to Amendments 109 and 111.

Clause 27 seeks to put the no-scheme principle in the compensation code on to a statutory footing. The Bill defines the no-scheme principle as,

“any increase in the value of land caused by the scheme for which the authority acquires the land is to be disregarded”.

Amendment 107 seeks to take this further to make the Bill state that,

“any increase in the value of land caused by the scheme or the prospect of the scheme”,

should also be disregarded. The Government have tabled a very similar amendment. I welcome that amendment and do not plan to say any more about it.

I turn to Amendment 109. New Section 6A(3) on page 21 of the Bill states:

“In applying the no-scheme principle the following rules in particular … are to be observed”.


This amendment seeks to delete the words “in particular” given that new Section 6A contains five rules which are clearly defined. I will come on to Rule 4 in a moment. If one has rules defining what the position is, why do we need the words “in particular”? That implies that there are other rules that might be considered and there is no indication as to what those might be. The current position is that only the statutory disregards can be taken into account in disregarding the scheme. This provides clarity over the valuation exercise to be undertaken. I hope the Minister will agree that “in particular” on page 21, line 28 should be taken out.

Finally, Amendment 111 relates to Rule 4. The purpose of scheme cancellation being on the valuation date is to avoid the need to speculate on what may have happened between the date of cancelation and valuation because they are the same. It is not clear what the purpose of Rule 4 is. It seems to be unnecessary and likely to create confusion, particularly in the context of the other four rules. I hope the Minister will be able to explain why it forms part of the Bill and why the words “in particular” need to appear in new Section 6A in Clause 27. I beg to move.

[Lord Kennedy of Southwark]

My Lords, I will be brief. In this group, I have Amendments 116, 117, 118 and 119. The first three seek to leave out “highway” on page 24, lines 14, 16 and 17, and insert “transport project”. We thought that would make the issue clearer. New Sections 6D(3), 6D(4)(a) and 6D(4)(b) in Clause 27 use “transport project” and I therefore did not understand why later in the same clause it was referred to as a highway scheme. Can the Minister explain why that is the case and if my amendments are not necessary? If they are, I hope he will accept them as it is odd to move from the wider and encompassing definition of transport project to the narrower definition of “highway”.

Amendment 119 seeks to provide further clarity by removing “announced”. In these sorts of schemes you get into arguments about when things were announced so we thought it would be much clearer to put,

“first proposed in consultation with the public”.

There will be an actual date on which a consultation is started and when papers and a clear plan are sent out. We thought this would be much better as we do not want disputes later because everyone is arguing about when the scheme was formally announced. That is the purpose behind the amendment and I look forward to the Minister’s response.

[Lord Young of Cookham]

My Lords, we have moved on to the no-scheme principle. The problem with this principle is that since it was first established it has been interpreted in a number of complex and often contradictory ways. Clause 27 is intended to clarify the position. It creates a statutory no-scheme principle and sets out a series of clear rules to establish the methodology of valuation in the no-scheme world. It also extends the definition of the scheme to include a relevant transport project in circumstances where land acquired in the vicinity for a regeneration or redevelopment scheme is facilitated or made possible by that project. We are extending the scheme because we want to ensure that an acquiring authority should not pay more for the land it is acquiring by reason of its own or someone else’s public investment.

I am grateful to the noble Lord, Lord Shipley, for explaining the need for Amendment 107. The Committee will have observed that it is similar to government Amendment 108, so I am pleased to say that I am in complete agreement with the noble Lord. It is entirely correct that increases, as well as decreases, in the value of the land caused by the prospect of the scheme should be disregarded.

Amendment 109 was also proposed by the noble Lord, Lord Shipley. He argues that the words “in particular” should be omitted from the introduction to the rules defining the no-scheme world as they imply that some other rules might also be in play. He argues that the rules set out in new Section 6A should be an exclusive list. The Government’s expectation is that in the vast majority of cases the application of the rules as set out will be sufficient to establish the no-scheme world. There may, however, be rare cases in unforeseen circumstances where the Upper Tribunal considers that the application of the rules alone would not give a fair result. Retaining the phrase “in particular” gives the tribunal sufficient flexibility in these rare cases to fall back on the underlying no-scheme principle set out in new Section 6A(2) and its own common sense to arrive at a fair outcome. While I appreciate the noble Lord’s point about the need for clarity, the Government’s view is that the Upper Tribunal should retain this flexibility in order to reach a fair outcome in such unforeseen circumstances.

With Amendment 111, tabled by the noble Lord, Lord Shipley, and government Amendment 112 we now move to consideration of the rules themselves. The noble Lord, Lord Shipley, argues that Rule 4 is unnecessary and should be omitted. The Government’s view is that it remains necessary in order to complement Rule 3. Rule 3 assumes that there is no prospect of the same scheme or any other project to meet the same or substantially the same need as the scheme underlying the compulsory purchase. Rule 4 assumes that there is no prospect of any other scheme taking place on the land concerned. As currently drafted, this is too wide, so Amendment 112 restricts Rule 4 to disregarding only those schemes that could be undertaken only by the exercise of statutory functions or compulsory purchase powers. This means that the prospect of schemes brought forward by the private sector would still be considered as part of the no-scheme world. This is a fine point of valuation practice. In the light of what the noble Lord said, I think that the Government should further consider this issue very carefully with the expert practitioners who may conceivably have been briefing the noble Lord to find a solution.

Amendments 116, 117 and 118 were tabled by the noble Lord, Lord Kennedy. New Section 6D(6) specifies that when the scheme to be disregarded under Rule 3 is a highway scheme, the reference to “any other project” includes another highway scheme to meet the same need as the actual scheme. This provision reflects the planning assumption in Section 14(5)(d) of the Land Compensation Act 1961. It is important that the assumptions for the no-scheme world and the planning assumptions that should be applied in that no-scheme world should be consistent. The current Section 14 was substituted by the Localism Act 2011. A similar provision was added to the original version of Section 14 by the Planning and Compensation Act 1991. The noble Lord put forward a powerful case that this clarification could apply equally to other transport projects. If it did, Section 14 would also need to be amended to keep the two sets of assumptions in step. I think that this is another issue which the Government should reflect on with expert practitioners.

Turning to the definition of the scheme that must be disregarded before compensation may be assessed, government Amendments 113, 114 and 115 make some small adjustments in the context of the extension of the scheme to relevant transport projects. These have arisen from discussions between the Government and the Greater London Authority and Transport for London, which have only recently been concluded. I am very happy to give details if noble Lords would like them, but as they are relatively small adjustments, I propose to skip that part of the text.

I now return to the amendments tabled by the noble Lord, Lord Kennedy. Amendment 119 seeks to clarify new Section 6E(3) which disapplies Section 6E for land bought after a relevant transport project was announced but before this Bill was published. If such land were to be included in a redevelopment or regeneration project in the vicinity of that relevant transport project, it would be valued as if the relevant transport project was not part of the scheme to be disregarded.

The noble Lord’s amendment is much more specific than the Bill as currently drafted. The Government’s view is that such precision may not be necessary. The provision refers to an event that has already happened, and it is quite possible that a project may have been announced in some other way than that specified by the announcement. If so, it would be unfair to restrict this provision because the announcement did not fit within the somewhat narrow definition proposed.

However, having said that, it might be possible to clarify, perhaps in guidance, exactly what is meant by an announcement. That is certainly something that I would like to reflect on. I invite the noble Lord, Lord Shipley, to withdraw Amendment 107.

[Lord Shipley]

My Lords, I beg leave to withdraw Amendment 107. I look forward to reading carefully in Hansard what the Minister has said, with a view to potentially coming back to this on Report.

Amendment 107 withdrawn.

--- Later in debate ---

[Lord Stunell (LD)]

I want to add my amateur voice to that of the professionals who have commented so far. At our previous sitting, we had an extended discussion about the sweeping provisions of Clause 12, making it a Henry VIII clause. The Minister went out of his way to reassure us about the very limited intent of Ministers in relation to that clause. One of the issues, which was perhaps not made very explicit in that debate, is exactly the point that the noble Lord, Lord True, made about the lack of public trust in the system, which the Neighbourhood Planning Bill and the Localism Act were specifically introduced to reverse. The Act seems to be doing so in places where it is taking root, which is absolutely excellent, and anything which would tend to undermine that trust and lead to uncertainty about the effectiveness of the new system is certainly to be avoided if possible.

I look at this from a pragmatic point of view, though I absolutely accept and endorse the constitutional point of view that has been put forward. With Clause 12 and Clause 38 we basically have a Henry VIII clause followed by a William I Clause. William I galloped through England laying waste to everything he saw, and that does not leave a very favourable impression of the direction of travel of the Bill. I hope that on top of any constitutional considerations, issues of news management, at least, might penetrate and make a difference to the Government’s approach.

My noble friend Lord Thomas said that there is surely some wording that could be used to make this a clause about owning up to mistakes. A phrase limiting its application only to cases where there was manifest error or omission would at least put on record and in the Bill its intended limitations.

[Lord Shipley]

I tried to add my name to this clause stand part Motion but unfortunately the queue was too long and I was not able to. I understand that mistakes can be made and need to be rectified. I again draw the Committee’s attention to the fact that we have, on day one of Committee, had 34 government amendments to a Bill which has passed to us from the other place. That shows that Bills have to be drafted better so that we do not end up with people wanting to change them because the right level of thought was not put in to them in the first place. In her emphasis on neighbourhood planning, the noble Baroness, Lady Cumberlege, had it absolutely right—a clause of this kind in a Bill to do with neighbourhood planning, which can, in effect, put a coach and horses through any aspect of it, is unacceptable. I hope that the Minister understands that, and I very much hope that this clause will not survive beyond Committee.

[Lord Beecham]

My Lords, there is a certain irony in a Henry VIII clause applying to Wales, given that the Tudor monarchy was based on Welsh lineage. I am also reminded of the lines of TS Eliot in The Hollow Men:

“This is the way the world ends

Not with a bang but a whimper”.

The Bill is ending in the reverse order. We have had a generally mild and constructive discussion for the past four days in Committee, but we end with something of a bang, because if the Government stick to their position, what is being perpetrated in the clause will lead to significant disagreement.

It is particularly important that the Government should listen to advice from the noble and learned Lord, Lord Judge. Others of us have our own views—we perhaps have a political approach, even those of us who are lawyers of a senior vintage, if I may put it that way. To hear the noble and learned Lord’s critique must surely give the Government pause for thought. It is simply unacceptable to insist on a procedure that leaves so much power in the hands of the Government effectively to ignore the obligations which ought to apply in relation to the Welsh Assembly, in this case, but in general to the operation of secondary legislation. In the few years that I have been here, that has time and again been shown to be defective as a mechanism for sustaining proper parliamentary consideration at the appropriate time of important measures with significant implications for various aspects of public policy.

I hope that the Minister will take this back and respond constructively, or secure permission to do so, to the views of this Committee and those of the Delegated Powers and Regulatory Reform Committee and, it appears—for I had not noticed its report—to take the views of the Constitution Committee into account. Obviously, he cannot give us any firm commitments tonight but I hope that, after consulting his colleagues, he will be able to satisfy the House by indicating that. Otherwise, it will undoubtedly have to go to Report and, if necessary, a vote at Report. I hope that we can avoid that because, on the whole, the Bill has proceeded in a fairly consensual way. Most of us have endeavoured to work with the grain of the Government’s policy. It would be a shame if that were in contrast with a rigid decision to stick with very unsatisfactory drafting right at the end of the Bill.

Combined Authorities (Mayoral Elections) Order 2017

Lord Shipley Excerpts

Thursday 26th January 2017 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, we move from the international to the local. The draft orders we are considering this afternoon, if approved and made, will provide the rules for the conduct of elections for directly elected mayors of combined authorities and the rules by which mayoral vacancies are to be declared, and the procedure for filling them through by-elections. They are essential to enable the first elections of combined authority mayors to take place in May 2017.

The two orders we are considering, if approved and made, will mark a further milestone in implementing agreed devolution deals to date. They are essential for ensuring that elections for the office of mayor can be conducted and any mid-term vacancies filled on a consistent and fair basis.

As noble Lords will be aware, the Government committed in their manifesto to implement devolution deals where there was local support and where such deals would result in benefit to local communities. These deals have been forthcoming. Devolution involves conferring significant powers and budgets on local areas that have agreed to have directly elected mayors, providing that essential single point of accountability for such major new powers.

I remind noble Lords that Parliament has approved, and we have made orders, establishing city region mayors in Greater Manchester, Liverpool city region, Sheffield city region, the West Midlands and the Tees Valley. Furthermore, orders creating such mayors in the west of England and for Cambridgeshire and Peterborough have been laid before Parliament to be considered. If approved, they will be in place in time for them to elect their first combined authority mayors in May. In all these cases, the councils have agreed and consented to having a directly elected mayor.

The orders provide first and foremost for the conduct of the elections for those mayors that will first take place in May this year. The rules will apply in those and subsequent elections. The second and smaller order provides for how vacancies in the mayoral office are to be handled should a vacancy arise following election. Both these orders have been debated in and consented to by the other place, with the vast majority in favour. This support reflects the vital nature of these orders to ensure that mayoral elections for combined authorities can go ahead in May.

Finally, for setting the wider context, orders that will confer devolved powers on these mayors once elected will come forward. The first such order was approved by Parliament before Christmas, devolving powers to the Greater Manchester mayor. Orders devolving powers to the west of England, Cambridgeshire and Peterborough, and the Tees Valley are before Parliament. We will bring orders in the coming weeks for the Liverpool city region and the West Midlands. We will also lay further orders for the Tees Valley and Greater Manchester.

On the specifics of the orders, I emphasise that they should be seen in the context of the full body of electoral law governing local elections throughout England. These orders do not seek to make piecemeal changes to this wider body of law. The rules set out in the Combined Authorities (Mayoral Elections) Order closely reflect the rules that apply to local authority elections, elections of local authority mayors and elections for police and crime commissioners.

The Combined Authorities (Mayoral Elections) Order makes detailed provision about the conduct of the elections for directly elected mayors of combined authorities. Although the order may seem bulky—running to some 151 pages—it is necessary to fully specify all the rules of these elections of combined authority mayors. This full specification of the rules is the approach we use for all other elections.

As I have said, these rules largely replicate the generality of election rules and apply them to the particular situation of combined authority mayors. Therefore, I simply highlight the four areas where special provision for combined authority mayors has been made, because the circumstances of these mayors is such that the standard rules could not appropriately be applied.

First, particular provision has been made for candidate deposits. These are the deposits that candidates must lodge and which are returned to the candidate if their share of the vote is more than 5%. The rules in the draft order provide that the deposit for a mayoral candidate is £5,000. This is the same amount as the deposit for candidates for police and crime commissioners. It is significantly greater than the £500 required for a local authority mayor. The difference reflects, and is commensurate with, both the larger size of the areas over which a combined authority mayor or police and crime commissioner will have jurisdiction and their level of responsibility.

Secondly, there is particular provision for nomination arrangements. This is the number of signatures that candidates are required to collect to be validly nominated for election. With this order, the requirement for candidates for election as combined authority mayors is to secure a minimum of 100 subscriptions—that is, signatures of electors. Moreover, at least 10 of these subscriptions must come from the area of each constituent council; in two-tier areas, from each district council within the area of the combined authority. In cases with more than 10 constituent authorities, candidates will still require at least 10 subscriptions from each area, and so in such a case will require more than 100 total subscriptions. This is a significant increase from the rule for local authority mayors, which requires candidates to secure 28 subscriptions. As with deposits, this increased requirement is commensurate with the increased constituency size and responsibilities of combined authority mayors. The requirement to obtain a number of subscriptions from each constituent area ensures that candidates secure support from the full range of areas, however diverse, within any combined authority. It would prevent for example, candidates being nominated who secure support, say, from one particular part of a combined authority area—perhaps the rural hinterland—but have no support in the urban core.

Thirdly, particular provision is made for candidate spending limits. This is the limit that restricts the amount candidates are able to spend on election expenses during the election campaign. For local authority mayors, candidates are limited to £2,362, plus 5.9p per registered elector in the local authority area. For a combined authority mayor, this limit is £2,362 per constituent council, plus 5.9p per registered elector within the combined authority area. This provision—with the majority of the funding being measured per capita— ensures that appropriate candidate spending limits are set across the range of mayoral combined authorities, which vary significantly in size. Total candidate spending limits under this provision also, when appropriately scaled for numbers of electors, align closely with the spending limit for candidates campaigning for election as Mayor of London.

Noble Lords will notice that all these candidate limits—for local authority mayors, combined authority mayors and Mayor of London—are lower than those for police and crime commissioner elections. This is because candidates for police and crime commissioner will need to spend more in order to communicate directly with the electorate, since in these elections there is no requirement on the returning officer to prepare an election address booklet covering all candidates to be delivered to all electors at no cost to the candidates.

Fourthly, this order allows for the creation of a combined authority returning officer—or CARO—to be appointed by the combined authority. This is similar to the provision creating a police area returning officer—or PARO—for police and crime commissioner elections, and ensures that there is an appropriate individual appointed to oversee the election as a whole.

It should be understood that in both of these roles, the respective returning officers are personally responsible for publishing the notice of elections, administering the nomination process, ensuring that candidates comply with the requirements regarding the content of their election addresses, collating and calculating the number of votes given for each candidate, calculating the result and declaring the result. It is therefore highly important that this role is carried out by a competent individual.

Turning to the Combined Authorities (Mayors) (Filling of Vacancies) Order 2017, this smaller order is necessary to establish the rules by which vacancies are declared in the office of combined authority mayor, and the procedure for filling these vacancies through by-elections. They follow exactly the procedures adopted for other types of local authority. Noble Lords will understand that these provisions are required to be in place in advance of the election of combined authority mayors in May 2017 to ensure that any subsequent vacancies can be appropriately and consistently dealt with.

In conclusion, the draft orders we are considering today are vital to ensure that the democratic elections to these important offices can first take place in May 2017, and that associated arrangements are in place in good time should any mid-term vacancies occur. It is these detailed rules set out in the orders before us today that provide the strong legal framework for these elections. It is such a framework that ensures that all can have confidence that the elections have been fairly conducted and that the outcome of the poll genuinely reflects the democratic wish of local electors. I commend both draft orders to the House.

[Lord Shipley (LD)]

My Lords, I welcome the discussion of these orders. I remind the House of my vice-presidency of the Local Government Association. I seek clarification on two points in one of the orders, because, broadly speaking, most of what is proposed is not contentious for us.

I have a question about the combination of polls, and my query lies with paragraphs 8.7 and 8.10 of the Explanatory Memorandum. The memorandum says, rightly, that when you combine polls, that produces cost savings. Given that this is a new election, can the mayoral elections be held on the same day as a general election? In other words, might we end up with three elections on one day? I note the following words in paragraph 8.10:

“Government is confident that electoral administrators will be able to effectively administer combined authority mayoral elections and other polls that they may be combined with”.


That says that the Government are confident, but what evidence were they given by electoral administrators? Running three elections at once is clearly more complicated than running two.

My second question relates to the election booklet that the Minister referred to. Is it the intention to distribute that election booklet alongside poll cards? Clearly, if it is a single process, that will reduce costs at a time when local authorities are having great difficulty in balancing their budgets. Having to pay for two separate distributions will be more expensive and unwieldy than if both are delivered together.

[Lord Kennedy of Southwark (Lab)]

My Lords, I refer the House to my declaration of interests—specifically, that I am an elected councillor in the London Borough of Lewisham and a vice-president of the Local Government Association.

As we have been told, the orders before us today, if approved, will provide the framework and rules for the conduct of elections for directly elected mayors of combined authorities, specifically for the elections taking place in May this year. The second order, as we have heard, deals with the process of addressing vacancies in the office of mayor and sets out how those will be dealt with. I am happy to support both orders before the House this afternoon.

I note that the first order contains matters such as the spending limits and the formula to calculate those limits, the number of voters needed to sign a nomination paper to make it a valid nomination, and other administrative matters which are quite normal for elections.

The noble Lord, Lord Shipley, has raised a couple of points and I shall be interested to hear the reply from the noble Lord, Lord Young of Cookham. However, he may be pleased to learn that in fact I have no questions for him in respect of either order and am content to approve both.

Combined Authorities (Overview and Scrutiny Committees, Access to Information and Audit Committees) Order 2016

Lord Shipley Excerpts

Thursday 26th January 2017 Lords Chamber

The draft order we are considering today is vital for ensuring consistent, robust and transparent accountability in combined authorities in time for the first combined authority mayors to take office in May 2017. I commend the order to the House.

[Lord Shipley (LD)]

My Lords, this a slightly lengthier discussion than we had on the previous two orders. It results from there having been great cross-party collaboration when the Cities and Local Government Devolution Bill passed through your Lordships’ House. That work developed the basis for the proposals now before us. Let me say at the outset that much of it is welcome.

For the avoidance of any doubt, I want first to ask the Minister to confirm that the order will apply to all combined authorities automatically and that, if there is to be a combined authority in future which does not have a mayor, the order will apply to it as well. I then have a few specific questions. When the Cities and Local Government Devolution Bill passed, we had established separate overview and scrutiny committees and audit committees—it was right to separate those two functions. But in the case of audit, I hope that the Minister can confirm that it will encompass risk, particularly investment decisions.

One function of overview and scrutiny will be to scrutinise risk, but there are advantages in audit committees having a clear risk function as well, because some investment decisions will be very big financial decisions. It was good to see from the list of consultees that the National Audit Office and the Centre for Public Scrutiny were consulted, because one of the aims that we had with the Bill was to ensure that value-for-money audits were done, as well as simply financial audits. Can the Minister confirm whether the proposals given to the Government by the National Audit Office and the Centre for Public Scrutiny have been incorporated in this order?

I have a further concern that there is to be no governance framework for the operation of overview and scrutiny committees. My questions are: how does an overview and scrutiny committee know what it needs to scrutinise? Who will tell it what it should review? Am I right in assuming that agendas and papers for the meetings of combined authorities will be made available, and that they will include both the public and private parts of those agendas? We need to be clear exactly what is proposed here. When the Bill was passed, there was a lot of concern about access to meetings. We do not want to see decisions being taken in lengthy pre-meetings of combined authorities, from which the press and public are excluded, with the formal meeting of a combined authority being very limited in time and content. I submit to the Minister that such an outcome would not be good for local democracy or for the success of mayoral combined authorities in the public perception.

The absence of a governance framework places a lot of responsibility on the shoulders of the committee members, in particular independent members, to ensure transparency and openness. I suggest to the Government that they should monitor the appointment of independent members. There is clearly a process, which we welcome, but I think the Government will need to monitor that appointment process to ensure that it is indeed wholly transparent.

I have a further query about timescales, which relates to the two months allowed for a combined authority to respond to an overview and scrutiny committee. The timescales, as I understand them, are these: an overview and scrutiny committee will call in a decision if it wishes to, which will prevent implementation for up to 14 days. When that committee has held its meeting, the combined authority or mayor must hold a meeting to consider what it has said within 10 days. Potentially, that gives 24 days for the total time taken to that point. However, a period of two months is then allowed for the combined authority to respond to the overview and scrutiny committee, to explain why it made its decision. That is too long. I have not understood why it should take two months. I would be puzzled if it needed to take more than a fortnight, but there may be a reason that I have not understood. I am happy to seek the Minister’s reassurance on this point.

Finally, I would like an explanation, if the Minister is able to give one, for the statement about protecting the overview and scrutiny committee’s independence in the Explanatory Notes. The relevant bullet point, at the top of page 4, says that,

“to protect the overview and scrutiny committee’s independence, the committee may not include any officer from the combined authority or the combined authority’s constituent councils”.

That sounds eminently right and reasonable. What I am not clear about is exactly how the overview and scrutiny committees will then be staffed. There will clearly have to be staff members present, writing opinions and papers for the attention of scrutiny committee members, which implies quite significant staffing. That may be fine, but presumably it also implies that the officers giving advice to the overview and scrutiny committee will potentially be required to give evidence to the overview and scrutiny committee. What power does an overview and scrutiny committee—which may not include any officer from the combined authority or the combined authority’s constituent councils, so there must be independent officers present—have to require an officer who has given advice to a combined authority to attend a meeting? I should be grateful if the Minister will explain that point.

[Lord Kennedy of Southwark (Lab)]

My Lords, again for completeness, I refer the House to my interests set out in the register in so far as they are relevant to the issues being debated. I should state at the outset that I am content with the order before your Lordships’ House and am happy to approve it.

Generally, the order brings combined authorities under arrangements similar to those that exist elsewhere in local government. The new combined authorities, which will elect their mayors this May, will have considerable powers over large areas of service delivery and policy that have a tremendous effect over people’s lives. The powers that it is proposed to give to these new elected mayors and combined authorities are, in some cases, not yet through their parliamentary procedures, such as bus franchising, which is being debated in the other place as it considers the Bus Services Bill. The noble Lord, Lord Shipley, raises some important points about how the procedures will operate in the future and I will be interested to hear the Minister’s response.

I am pleased about the measures in respect of overview and scrutiny, which can serve a valuable function. I have first-hand experience of this, so I hope that the House will allow me to explain with a local example how valuable the function is. I have told the House many times before that I am a councillor in the London Borough of Lewisham. I may not have mentioned that I am a supporter of and season ticket holder at Millwall Football Club. I and many other councillors, residents and campaigners—including Vicky Foxcroft, the Member for Lewisham Deptford, Neil Coyle, the Member for Bermondsey and Old Southwark, and the Association of Millwall Supporters—were concerned at the proposals for redevelopment around the Den, which would not deliver any social housing or enough affordable housing. The club was clear that that potentially put its future at risk in a part of south-east London where it has been part of the community since 1910. Councillor Alan Hall, Councillor Brenda Dacres and others on the overview and scrutiny committee were able to provide robust challenge to the proposals. Other cabinet members, including Councillor Joe Dromey, also opposed the plans, which in recent weeks had a considerable amount of publicity in the Guardian, the Evening Standard, the South London Press, Private Eye, Sky Sports and the BBC. I have been struck by how many members of the House’s staff have said to me as walked past, “Defend my Den, my Lord”.

Yesterday it was announced that the planned compulsory purchase of land leased to Millwall would not be going ahead and that the local authority wants to get around the table to seek agreement on the way forward in a manner that brings together the club, the Millwall Community Trust, which does a great job with children in the area, and others to secure the redevelopment by agreement. Overview and scrutiny played an invaluable role in achieving that turnaround, as did the Association of Millwall Supporters, by highlighting concerns and issues. That is a local example of effective overview and scrutiny. I am happy to support the order.

[Lord Young of Cookham]

My Lords, the Hansard report of what the noble Lord just said should be sent to the members of every overview and scrutiny committee throughout the country in order to get an insight into how these committees can effectively further local democracy.

I will deal with some of the questions that were raised by the noble Lord, Lord Shipley. First, yes, the template that we are setting out today will apply not just to the authorities already up and running but to all combined authorities, whether or not they have a mayor—so existing and future.

The noble Lord then asked about risk. The 2016 Act sets out the requirement to establish an audit committee and gives these committees the power to review and scrutinise the authority’s financial affairs, including the,

“risk management, internal control and corporate governance arrangements”.

He asked whether we would monitor the appointment of the independent members to make sure that they were genuinely independent. Yes, we will. As for times, these are maximum times, and I may be able to say a little more about that in a moment.

The noble Lord also mentioned the absence of a governance framework. The order provides the broad legislative framework, while the guidance, which the Centre for Public Scrutiny is preparing, will help each combined authority to develop its detailed framework and operational arrangements for scrutiny. Officials worked with both the NAO and the centre in the development of this legislation, and their proposals have largely been included. We will work closely with the CfPS on the guidance, which it is going to publish shortly.

On access to information and the ability to summon, the overview and scrutiny committee has access to information powers, including the power to require the mayor, officers and members of the combined authority to come before the committee and answer questions and give evidence. The combined authority will establish an O&S committee and the order requires that the majority of the members of that committee must be constituent councillors. It is for the combined authority to determine the size of the committee, taking into account the political balance requirement. It will be serviced by officers of the combined authority, who will indeed need to have the necessary resources to make sure that it can discharge its duties.

As to whether decisions will open to the public, the minutes of the committees are public, except that personal and confidential information, as defined in the order, will remain unavailable to the public.

We have dealt with the issue of holding the mayoral elections on the same day as a general election. There may be some other questions that the noble Lord asked which I have not answered, in which case I will write to him. He can get up and ask me again, but the chances are that I will still say, “I will write to the noble Lord”.

[Lord Shipley]

May I just clarify the Minister’s very helpful comment on officers of the combined authority attending overview and scrutiny meetings? The officers of a combined authority will administer the work of the overview and scrutiny committee. The Minister may prefer to write on this, but can they be the same officers as those who are administering the combined authority? In other words, there is a question about the independence of advice that is given to the overview and scrutiny committee. Who decides, for example, what gets on to an agenda of a meeting and how do the members of the overview and scrutiny committee know what they should be discussing? Presumably, the officers of the combined authority who are managing the work of the overview and scrutiny committee will tell them what that is, but I hope that when guidance is issued, it will be made absolutely clear that an overview and scrutiny committee must be given the maximum information possible to enable it to do its job properly.

[Lord Young of Cookham]

I think I need to write to the noble Lord. I understand the point he is making, which is that there could be a conflict of interest on the part of the employees of the combined authority who may be servicing the O&S committee but may also be employees of the authority doing something else, so one needs some form of Chinese wall to make sure that the O&S committee gets the information it needs, even if that may embarrass some of its fellow employees on the combined authority.

The combined authority must appoint a scrutiny officer whose role is that of scrutiny, which is helpful. As I say, perhaps I may write to the noble Lord to amplify the issues he has raised about conflicts of interest, Chinese walls and so on. I commend the order.