Local Government Finance

Baroness Penn Excerpts

Tuesday 21st November 2023 Lords Chamber

[Baroness Taylor of Stevenage]

To ask His Majesty’s Government what assessment they have made of the impact on local government finance of increasing demand for emergency and temporary accommodation.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Penn) (Con)]

Local authorities deliver vital homelessness services and we recognise that the increasing demand for temporary accommodation places pressures on councils. That is why, taking together the 2022-23 and 2023-24 local government finance settlements, we have increased the funding available to local government in England in real terms. In addition, we are providing over £1 billion to councils over three years through the homelessness prevention grant.

[Baroness Taylor of Stevenage (Lab)]

My Lords, I welcome the Minister to her new role and greatly look forward to working with her. Please can we express our very best wishes to the noble Baroness, Lady Scott, for her continuing recovery?

There has been a rapid and dramatic increase in homelessness, with over 104,000 households currently in temporary accommodation—the highest number since records began in 1998. This created a budget pressure of £1.6 billion for councils in 2021-22. So many well-respected sector experts, including the Local Government Association, the District Councils’ Network, Citizens Advice, Crisis and London Councils, have made representations to the Chancellor in advance of the Autumn Statement, pointing out that the key drivers of this increase are the failure to upgrade local housing allowance in line with inflation and a spike in Section 21 evictions. What assessment have the Government carried out of the impact of the freeze on local housing allowance?

[Baroness Penn (Con)]

My Lords, as with all benefits, we keep the local housing allowance under review. The noble Baroness also mentioned Section 21 evictions, which, as she knows, are being reformed through the forthcoming Renters (Reform) Bill that is making its way through the other place and which we will see here shortly. I return her welcome and look forward to working with her across the Dispatch Box. I also look forward to my noble friend Lady Scott joining me back on the Front Benches soon.

[Lord Scriven (LD)]

My Lords, throwing asylum seekers out of hotel accommodation at short notice only moves the issue to local councils, which are legally obliged to accommodate asylum seekers while their asylum applications are processed. What assessment have the Government made of the total cost of this unacceptable cost-shunting to local authorities?

[Baroness Penn (Con)]

My Lords, I would not agree with the noble Lord’s characterisation of the situation at all. While people’s asylum applications are being processed, they are in Home Office-provided accommodation. Some of that accommodation is hotel accommodation, which is in no one’s interest—not that of the people who are accommodated there nor that of the taxpayer. The Government are working hard to reduce the backlog in asylum applications and to move people on from hotel accommodation. My department is working closely with the Home Office and local councils to make sure that that process is as smooth as possible.

[The Lord Speaker (Lord McFall of Alcluith)]

My Lords, Lord Campbell-Savours is participating remotely.

[Lord Campbell-Savours (Lab) [V]]

Why should people pay inflated rents to private landlords who are coining it in conditions of scarcity? Is not the answer to secure selectively land for housing development at agricultural prices, as has happened in parts of Europe, in particular Germany, and to back up that land purchase policy with a mass building programme of housing for both rent and purchase, but under a new form of title which restricts speculative gains and yet protects the value of freehold title? Speculative markets in land are denying millions a home.

[Baroness Penn (Con)]

My Lords, I believe that part of the solution to this problem is an increase in supply and quality in the private rented sector, which our Renters (Reform) Bill will help to deliver, and also in the affordable housing and social housing sectors. That is why this Government have put so much money into the affordable housing programme, to increase the supply of that housing and relieve the pressure that we see on temporary accommodation.

[Baroness Lister of Burtersett (Lab)]

Following on from the question asked by the noble Lord, Lord Scriven, will the Minister impress on her colleagues in the Home Office the urgent need to review the current operation of the move-on period for newly recognised refugees, which is forcing many of them into rough sleeping and homelessness? They have been given as little as seven days’ notice to quit their Home Office asylum accommodation, with serious knock-on effects on local authorities also.

--- Later in debate ---

[Baroness Penn (Con)]

As I said to the noble Lord, Lord Scriven, my department is working closely with the Home Office and local councils to ensure that the process for moving people on from hotel accommodation is as smooth as possible. As I also said, we recognise that the work that we are doing successfully to reduce the backlog in asylum claims puts pressure on other parts of the system, which is why we have increased resources there too.

[The Lord Bishop of St Albans]

Both the noble Lord, Lord Scriven, and the noble Baroness, Lady Lister, have raised the really troubling issue of asylum seekers leaving accommodation and being made homeless. In the Government’s strategy, Ending Rough Sleeping for Good, there was talk about having a transparent and joined-up system. What plans do His Majesty’s Government have to ensure that homelessness policy and asylum policy are working together so that we can minimise this dreadful problem?

[Baroness Penn (Con)]

My Lords, as I have said, my department is working closely with the Home Office and local authorities on this issue. Local authorities have already moved thousands of families out of bridging accommodation and into long-term accommodation. We are also providing £750 million to the local authority housing fund, which is being used to buy or create new housing stock to accommodate, for example, Ukrainian and Afghan refugees who have been offered refuge here and now need somewhere to move on to. But it will also help to improve temporary accommodation for families owed a homelessness duty. That is an example of some of the longer-term action that we are seeking to take to alleviate some of these pressures.

[Baroness Butler-Sloss (CB)]

Are the Government thinking of supporting prefab houses, and if not, why not?

[Baroness Penn (Con)]

My Lords, the Government are a big supporter of modern methods of construction, which I think is the broad equivalent of prefab houses. We seek to see more houses built using those methods of construction. As the noble and learned Baroness knows, it can be a very efficient way in which to produce new homes.

[Lord Naseby (Con)]

I welcome my noble friend to her new role. I suspect that every Member of your Lordships’ House is aware that there is a chronic shortage of accommodation and in the supply of social housing. Against that background, now that she is in a position to have a look at the whole of this area, I hope my noble friend takes time to do that, and see in particular whether we can bring forward more social housing to address the huge need that we have at this difficult time.

[Baroness Penn (Con)]

My noble friend is absolutely right that there are a number of different actions that we need to take to address homelessness. We have the action on homelessness prevention strategy and the rough sleeping strategy; that is backed by more than £2 billion over three years, in addition to the increase in councils’ core budgets that I mentioned at the beginning. But we also need to look at the underlying supply of affordable and social homes, which is why we have the affordable homes programme in place. We are committed that that will continue to deliver large increases in the number of affordable homes available in this country.

[Lord Sahota (Lab)]

My Lords, last year, local authorities spent £1.5 billion on temporary accommodation, which is up by 9% from the previous years. This is just one of the reasons that so many councils are on the brink of bankruptcy. When will this nightmare come to an end? It is cut after cut, since 2010. When will it end, and when will local government get some help?

[Baroness Penn (Con)]

The noble Lord talks about cut after cut. Since 2019, local authorities have had a real-terms increase in their core spending power, taking into account higher levels of inflation than anticipated at the time. In addition to that, we have provided money for the homelessness prevention grant and the rough sleeping strategy, and in addition to that we have provided the £750 million that I referred to in answer to the right reverend Prelate to begin to address some of the longer-term solutions to how we address housing supply in our country.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, there are avenues that the Government are not exploring. We have an increasing amount of retail accommodation which is now empty and an increasing amount of office space in many cities which is not being utilised. What is the Government’s policy around trying to put that to good social purpose? Why are they not thinking about trying to create public-private partnerships to use those, rather than worrying too much about looking to new builds?

[Baroness Penn (Con)]

My Lords, I believe that that is the case. The Government are committed to revitalising our high streets, whether that is rejuvenating existing commercial property or making the best use of it in the local circumstances.