Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Lord McKenzie of Luton
Lord McKenzie of Luton
Before the Minister sits down, I will ask for clarification on two points. She said that anybody on housing benefit would be outwith the policy. What is the position of a tenant just on the cusp of housing benefit at the moment—but not in receipt of it—who, if charged a higher rent, is brought into the housing benefit system? Will that person then be in the system and immediately out? How is that going to work? Does using taxable income not inevitably mean that it has to be based on some “preceding year” basis, with all the complications of changing circumstances arising since?
Baroness Hollis of Heigham
Will the Minister confirm, or say that she still does not know, whether the final net money going to the Treasury after increased rents, the taper, fiscal drag—possibly modified by CPI—and the effect of local authority administrative costs will be nearer to £100 million a year as a contribution to reducing the deficit? Is it, frankly, worth it?
Welfare Reform and Work Bill
Debate between Baroness Hollis of Heigham and Lord McKenzie of Luton(10 years, 1 month ago)
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Baroness Hollis of Heigham
My Lords, to respond to the noble Lord, the latest estimate is that 60% or more of property sold under RTB is now in the private rented sector, it is no longer occupied by the people who bought it.
Lord McKenzie of Luton
My Lords, this debate focusing on six specific amendments has become quite broad and—dare I say it?—welcome. The noble Lord, Lord Kerslake, kicked us off by reminding us of the background to the policy—in particular, pointing out that it is a complete reversal of CPI plus 1%, with its 10-year guarantee, which was introduced only a year ago. The noble Lord, Lord Horam, made the point that Governments may be foolish to offer 10-year guarantees, but one would hope that, whatever the term of the guarantee the Government gave, it would be met, and certainly not broken after just one year.
The noble Lord, Lord Kerslake, reminded us of what the policy as now constituted will actually deliver. Rents will be 12% lower and £2.3 billion per year will be lost to housing associations and local councils by 2020. Given the current structure of housing benefit, we are effectively talking about almost a straight transfer of resources from social landlords to the Exchequer. There is also the prospect of having 43,000 fewer social rented homes by the end of the period. The noble Lord emphasised the importance of certainty for the financing of housing provision.
I will come to the specific amendments on co-operatives in a moment, but the noble Lord, Lord Best, said that there are only three options for housing associations: cut programmes, cut the revenue costs which add value to housing association tenants or reduce surpluses. The Government have got themselves in a bit of a jam by believing that just because authorities and housing associations have reserves, that is free money. That reserve is there to support other activities and the current borrowing of housing associations and authorities. My noble friend Lord Beecham told us about the practical impact of the policies on his authority, and also supported the amendment of the noble Lord, Lord Ramsbotham, on almshouses, which I will come to.
The noble Lord, Lord Horam, reminded us that we have to deal with the deficit. Of course we do, but why do we always choose to do so off the back of the most disadvantaged in our society? Why that route?
The noble Lord, Lord Scriven, made the challenging point: is this dogma or is it practicalities that we are getting from the Government? My noble friend Lady Blackstone asked whether the Government would be honest and tell us what they think the effect of the policy will be. We ought to hear the Government’s view on what this will mean for housing provision over the upcoming period.
We had a fascinating lesson from my noble friend Lord Triesman on long-term annuity financing, which is very long-term with small margins, so changes in revenue streams could easily tip it into not being available.
My noble friend Lady Hollis challenged the PM’s view on bulldozing sink estates and made the point that to make social housing work requires decent homes, decent jobs, stable communities and decent management, and I agree with all that.
Amendments 104C and 104D, tabled by the noble Lord, Lord Kerslake, have the effect of reducing to three years the period of the rent reduction. That would coincide with when the Government tell us that the deficit will be dealt with, but that remains to be seen. From 1 April 2019, or the equivalent date where the relevant years are determined by Clause 21(6)(a), the rent reduction provisions will not operate. Amendment 104E requires that registered providers increase rents by CPI plus 1% from April 2020 and also requires there to be a review of the formula rent arrangements to see whether there are prospects of higher increases or greater flexibility.
We support the need to have as much certainty as possible for the future so that registered providers can develop long-term plans, although we understand that the Government may be coy about supporting anything beyond April 2020. It is presumed that the noble Lord’s amendments would apply to those tenancies to which the rent standard currently applies and not more generally. We also support the requirement for a review of the impact of Clause 21 to see what flexibility might be required to address its consequences.
I think that the way the Bill would operate at the moment is that if there is silence on the year 2020 before we come to the new arrangements, the regulator’s ability to set the rent under the rent standard would come back into play because it is negated by Clause 27 only for when the rent reduction proposals are under way. That would deal with the year between CPI plus 1% for 2020 onwards.
Overall, the effect of the noble Lord’s Amendments 104C, 104D and 104E would appear to be that the base for future rent increases would be higher than the Bill currently provides. The loss of income to councils and housing associations would be ameliorated and the shortfall in the provision of new accommodation would be reduced, to the benefit of those in housing need and to the benefit of the public purse, which would otherwise be bearing the strain. Other things being equal, the housing benefit bill would be higher in the short term than would otherwise be the case, as would the cost to those tenants who meet all or part of their rental costs. Overwhelmingly, the focus should be on getting back on track as soon as possible the investment programme under way as part of the 10-year settlement, which is what the noble Lord’s amendments seem to achieve: therefore, we are happy to support them.
Amendment 108, tabled by the noble Lord, Lord Best, focuses on fully mutual housing co-operatives. Amendment 108A, tabled by the noble Lord, Lord Kerslake, focuses on accommodation which is excepted from the right to buy because of specific adaptations for disabled or elderly people. Amendment 109A, tabled by the noble Lord, Lord Ramsbotham, which covers almshouse charities, was spoken to by my noble friend Lord Beecham. These amendments should be supported.
The case on mutual housing co-operatives has been fully articulated, as one would expect, by the noble Lord, Lord Best. We heard in particular from the Edward Henry House Co-operative in Waterloo. It argues that the financial model for housing co-operatives is different from that of housing associations. They do not keep large reserves. The reserves are kept low because of the member-tenant role in running the co-op. The prospects for driving efficiencies is therefore limited. These co-operatives should clearly be an exception to the policy, as should community land trusts, which are a very small section of the sector.
It is understood that the exemption from the right to buy for adapted properties is not widely drawn. Is it the case that it would not apply to one-off adaptations and requires properties to form part of a development of similar homes and to have some sort of social service or extra care provided on site or nearby for them to be subject to the right-to-buy exclusion? If this is the case, such properties would appear to fall within the definition of supported specialised accommodation, which is the subject of a separate exemption which we are going to debate shortly. The Minister may care to comment on that. This begs the question of whether the right-to-buy exemption should be widened at all—but perhaps this is an issue for another piece of legislation.
The financial structure of almshouses is different again. Residents pay a weekly maintenance contribution, rather than rent, which is less than a commercial rate. The exception the noble Lord, Lord Ramsbotham, seeks is entirely justified, and it is presumed that any impact on savings would be negligible.
We are confronted with six amendments, each of which should be supported. We have had a very robust debate around the thrust of this policy, the problems it creates and the challenges it will create in providing decent housing for people who have no option but to rent.
Cities and Local Government Devolution Bill [HL]
Debate between Baroness Hollis of Heigham and Lord McKenzie of Luton
Lord McKenzie of Luton (Lab)
My Lords, as explained, Amendments 28 to 30 were basically driven by the health agenda. The facility for joint working arrangements, the transfer of functions subject to conditions or limitations, and providing for functions to be undertaken by the public authority on a continuing basis together with joint working seemed to us to be entirely reasonable. On the fundamental debate about the NHS we do not believe that this goes far enough, but that issue will be returned to on Wednesday.
Amendment 34, in my name and that of my noble friend Lord Beecham, is another attempt at clarity on the list of functions that the Government are prepared to consider as available for devolving under the provisions of the Act. We anticipated the answer that we got, and I will not prolong that at this time of night. I just ask: what is so wrong with some form of prospectus that would help local authorities to understand the criteria applied and the capacity that they may build? An annual report would help. I do not fully understand the Government’s reticence on this matter. My noble friend Lord Hunt has dealt with Amendments 31 and 32, and we look forward to the further consideration on Amendment 31.
I say to the noble Lord, Lord Low, that we appreciate the amendment that has just been moved. There is a great need in this area; we know that the social welfare advice system has been all but decimated—advice around benefits, debts, employment and housing—and it is a very difficult time. The noble Lord should be congratulated on the work that he did and the commission that he chaired. He is right on the fundamental point that combined authorities should be a forum within which a strategic framework could be put together to deal with these very issues. I take the Minister’s point that it is not the process of this Bill to prescribe that for each individual authority or the way that they should do it, but I hope that she will accept that it would be enabled by this process—indeed, it is quite an appropriate matter for a combined authority to address.
Amendments 71 and 72, as we have heard, would enable the transfer of public authority functions to certain individual local authorities. To reiterate a question asked by my noble friend, this would apply to any sort of authority—a district, county, unitary or single authority—and potentially the same type of powers that would be available more generally. It is an important change, which is welcomed, although we look forward to the DPRRC’s report when it comes out tomorrow. The change is achieved by the Secretary of State making regulations if it is considered that the exercise of statutory functions will be improved. As we have heard, they have to have the consent of the relevant local authority.
We acknowledge that the affirmative procedure will operate, and the order will be accompanied by a more detailed report, which we will debate in a moment. However, the underlying process is unclear—perhaps we will get some clarity from the report tomorrow. It does not seem to require any starting assessment by the local authority and the proposal then being made to the Secretary of State; that seems to have disappeared from the process. In practice that may end up as an iterative process, but if there is no right for the individual local authorities to make proposals to the Secretary of State for consideration which merits some response, what assurance do we have that this is an inclusive process? It starts from the other end of the process to the existing Section 109, so what creates an effective right for individual authorities with a case to be able to make that case and to be heard? I was anticipating an amendment from my noble friend Lady Hollis in this group but perhaps it will come in a subsequent one.
Baroness Hollis of Heigham
I apologise to my noble friend, but as my amendment was on the very different issue of council tax bands and I thought it was worth trying to explore that in greater detail, fairly late today I asked for it to be disaggregated. Therefore noble Lords will find that on the latest list of amendments Amendment 75A is at the very end, and it will be the last amendment to be debated on Wednesday. The noble Lord may have had an earlier set of groupings in which it was included; I pulled it out after the draft groupings had come out.
Lord McKenzie of Luton
I am grateful to my noble friend for that clarification. I will just say to the Government that where my noble friend leads, Governments eventually catch up.
Lord Shipley (LD)
My Lords, I do not wish to repeat anything that has been said on Amendments 31 and 32, because I am very happy with the debate we have had so far. I will draw the Minister’s attention to the very helpful words of the noble Lord, Lord Low, on Amendment 67, and will then take that and compare it to Amendment 34 and the list of public functions, which the Labour Party has identified as needed, and which I support. It starts to matter. We had a brief discussion in Committee around careers services and their role as regards the devolution of skills budgeting—what the exact responsibility of combined authorities would be as regards careers services. All that matters because it is not clear to all the organisations outside your Lordships’ House exactly what is in scope. Therefore the production of that list called for by Amendment 34 seems very important, because the points made by the noble Lord, Lord Low, were extremely important and appropriate.
Cities and Local Government Devolution Bill [HL]
Debate between Baroness Hollis of Heigham and Lord McKenzie of Luton
Baroness Hollis of Heigham
My Lords, although I am grateful to the noble Earl, Lord Listowel, for managing, with some finesse, to shoehorn housing into this debate on the cities Bill, I share some of the reservations of my noble friend Lord Beecham. In two-tier authorities and shire counties, one of the primary functions of district councils is the housing responsibility. Even if they have stock transferred their property to a housing association, as quite a high proportion has, the district council none the less remains responsible as the strategic authority, so to speak, in dealing with homelessness. That is complicated enough, and I think that the problem is going to get infinitely worse if the wretched housing association Bill progresses. That will fire an Exocet through our ability to meet housing need in localities, as we will lose not only the housing association stock but council housing stock to pay for the discounts—we will lose two rental properties to fund one discount and not one extra house will be built as a result. It will be completely disastrous, and I am sure that the noble Earl, Lord Listowel, will be fiercely engaged in that fight. I very much hope that he will be.
The problem is that, if this is the thinking of the noble Earl, I am not quite sure what distinction he is making between a combined authority and a unitary authority of three previous district councils. Housing is the main function. If this is where it is going, in alignment with the recommendations that will come with a combined authority for the development of the economy and so on, effectively, a unitary authority will be achieved in the name of adding more and more functions to the combined authorities, which are primarily about economic growth.
No one doubts that one responsibility of the combined authority will be to determine areas for housing growth, land development and land use. That is very different from taking on the responsibility for who gets what house due to local priorities. If that is taken away from the district council and given to the new combined authority, we will have effectively removed the responsibility for housing from a district council to a combined authority and would have to start inspecting houses of multiple occupation and all the rest of it to make it work. That would leave district councils virtually non-existent. That is my problem with Amendment 36A.
Although I am sure that Amendment 36B is well intentioned, my problem is with “affordable”. The research of my right honourable friend in the other place, John Healey, has shown that the two drivers of the housing benefit bill have been, frankly, the extension of the private rented sector, with its very high rents, and the displacement of social housing rents by affordable rents. Those two things alone are primarily responsible for the growth in housing benefit, neither of which adds a single property to the stock or houses a single additional person—they are displacement activities. All that is happening behind this amendment and may, I fear, be made worse by it. All the drivers will add to the welfare bill. The Government will then say that we must cut it by taking away the ability to make work pay and removing money from working tax credits because they are not willing to tackle the tax privileges of private landlords who are charging market rents or the issue of affordable rents, which is, in turn, driving up housing benefit bills in the social rented sector.
An infinitely more complicated set of problems has been opened up by the noble Earl’s amendments. None of us would dispute the outcomes that he is seeking, but I do not think that he can get there through this route.
Lord McKenzie of Luton
My Lords, we have considerable sympathy with the thinking behind both amendments from the noble Earl, Lord Listowel. They touch upon one of the most serious issues that confront our society—our housing crisis— which must engage the action of central government and local authorities. It is also prescient, given concerns expressed in the press this morning about the figures for child poverty rising for the first time in a decade. We know that the lack of affordable housing is a key driver of homelessness and that homelessness inevitably sits at the centre of disadvantage and deprivation. The major influences on a child’s life—family income, effective parenting and a secure environment—are all directly or indirectly influenced by a family’s housing conditions.
The question posed by these two amendments is what the role of a combined authority should be in addressing our housing crisis and reducing homelessness. There certainly could and should be a role, and the Greater Manchester Combined Authority has shown the way. In its case, the elected mayor has control of a £300 million housing investment fund and powers over strategic planning, including the power to create a statutory spatial strategy for the CA area. There are somewhat convoluted arrangements for administration of the housing investment fund, but it has the prospect of delivering 10,000 to 15,000 homes over the period—a real contribution. Powers to create a spatial strategy for the area are particularly useful, given the demise, as my noble friend Lord Beecham said, of the former regional spatial strategies and the weakness of the duty to co-operate.
There are two issues, however, with the noble Earl’s amendments. Indeed, all noble Lords who have spoken today have, in one way or another, touched upon those issues. We should be mindful of the current requirement for local authorities to ensure that local plans meet the assessed needs for both affordable and market housing and that neighbourhood plans can supplement this. Further, important legislation is already in force that places a general duty on housing authorities to tackle homelessness, however difficult that is in the current circumstances. We would not wish to undermine these important responsibilities and local priorities, but it might well be appropriate to build on these requirements at an overarching strategic level. One way or another, those points were made by the noble Lord, Lord Shipley, and my noble friends Lord Beecham and Lady Hollis.
Certainly the prospect of a combined authority having spatial planning powers across an area could be a considerable advantage in creating a coherent housing framework. However—I am sure that the Minister will make this point—the approach suggested is prescriptive. Doubtless it will be said that there is nothing to prevent a combined authority seeking these powers by agreement, and I hope that the Minister will confirm that the Government would not be shy of agreeing such arrangements.
Baroness Williams of Trafford
My Lords, Amendments 36A and 36B would insert two new clauses into the Bill that place statutory duties on the Secretary of State to undertake reviews of the advantages and disadvantages of placing a duty on combined authorities to reduce the numbers of homeless children and families in housing need, and give combined authorities responsibility for affordable housing in their area and associated borrowing powers. These amendments would also require the Secretary of State to lay the report of these reviews under the clauses before both Houses of Parliament.
At the outset, I must say that housing is a priority for this Government. In our manifesto, we committed to building 200,000 starter homes and more affordable housing. We are putting in place £38 billion of public and private sector investment to help ensure that 275,000 new affordable homes are provided between 2015 and 2020. This means that we will build more new affordable homes than during any equivalent period in the last twenty years.
A couple of noble Lords asked about the definition of “affordable”. The detail is set out in the national policy planning framework, and it is, broadly:
“social rented … and intermediate housing, provided to eligible households whose needs are not met by the market”.
However, within that, there is broad scope around what affordability means in different places to different people.