Lord Beecham
Main Page: Lord Beecham (Labour - Life peer)Housing and Planning Bill
Lord Beecham Excerpts
Viscount Younger of Leckie
My Lords, I shall speak to Amendments 78B to 78YW, tabled in the name of my noble friend the Minister. They amend the housing administration regime, which is intended for use in the extremely unlikely event that a large or complex housing association becomes insolvent.
Let me first reassure noble Lords that a robust regulatory framework is already in place for registered housing associations. The regulator will retain its existing powers to help a housing association in financial difficulty. Housing administration is in addition to existing powers, not a replacement. The regulator’s existing powers have meant that there has only ever been one insolvency case in the sector. However, housing associations have become more complex and have significant levels of private debt—about £65 billion in total.
The review of the near insolvency of Cosmopolitan housing association found that the regulator’s powers may not be enough if a large, complex housing association gets into financial difficulty. That is why we have brought forward legislation to introduce an administration regime for housing associations.
I have to beg your Lordships’ patience as I explain the detail of the amendments. Insolvency law is a technical and complex subject but none the less important. I assure the House that officials have been working with lenders, insolvency practitioners, valuers and housing associations on these amendments. The amendments are necessary to address issues raised by them and to clarify how the regime would work.
Amendments 78C to 78N, 78R to 78YF, 78YU and 78YW concern the two objectives of housing administration and necessary consequential amendments. The first objective is the same as a normal administration process that applies to companies. The second objective, which is expressly subordinate to the first, is to retain the social housing within the regulated sector.
We would like to retain social housing stock in the regulated sector but recognise that, if there is an insolvency, this may not always be possible. While the administrator’s primary duty is to the creditors, if this duty can be fulfilled while keeping all or some of the social housing in the regulated sector, that is what the administrator must do.
Amendment 78P introduces a new clause. Sometimes planning obligations under Section 106 of the Town and Country Planning Act 1990 do not apply if a mortgagee enforces security over the land. The proposed new clause puts the housing administrator in the same position as a mortgagee in possession.
Through Amendments 78YG to 78YK, 78YM, 78YN and 78YQ to 78YT—I hope that your Lordships are still following me—the courts cannot allow the winding-up of a housing association without the regulator being notified 28 days in advance. These amendments allow the regulator of social housing to waive this 28-day notice period once they have been notified if they so choose. Waiving the notice period will allow other insolvency procedures to begin more quickly.
Amendment 78YV removes the ability to apply normal administration to a housing association that is a registered society. After consideration with the sector, we decided that this was unnecessary if housing administration was in place. There was also a risk that normal administration could follow housing administration, resulting in lenders not being able to access their security for over two years. Amendments 78YL and 78YP are consequential to Amendment 78YV.
Amendment 78Q sets a time limit of one year on housing administration and sets the parameters for applying for an extension. The appointment period and circumstances for extension are now aligned with normal administration. The Bill did not previously have a time limit. This change provides more certainty for lenders on when they would be able to enforce their security if housing administration fails to resolve the insolvency.
Finally, I am bringing forward Amendment 78B to make it clear that if social housing provided as a result of financial assistance given by the Government is sold by a housing administrator out of the regulated sector, the Homes and Communities Agency cannot recover that assistance from any successor in title. I hope that we never have to use these housing administration provisions and that the housing association sector continues to be financially robust. However, it is prudent that we are prepared for the unlikely event of a large or complex housing association becoming insolvent. I commend these amendments to the House.
Lord Beecham (Lab)
My Lords, I do not know whether other noble Lords have been watching it, but there has been a very interesting series on television of a Danish drama called “Follow the Money”, which would be an appropriate title for this group of amendments. That series had the benefit of subtitles and, with all due respect to the Minister, I must say that we could all have done with some subtitles, not necessarily on the day but in the form of a briefing note that could have helped us get our heads around this complicated and arcane topic.
I raise one issue with the noble Viscount. I understand, having been so advised by Shelter, that the Bill originally provided that in the event of insolvency of a housing association the first priority would be to maintain social housing in the sector and secure a transfer to another housing association. The amendments collectively before us make that objective secondary to the interests of the creditors. Therefore, the properties might simply be sold off rather than continue to be held within the social housing sector. Will the noble Viscount indicate whether he or the Government take that as an acceptable position? What would the potential impact be in the event of this crisis emerging with any particular association? Why was it necessary to change the original thrust of the Bill’s proposals and downgrade that priority of maintaining the social housing stock in favour of dealing with the needs of the creditors?
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I rise with some trepidation to speak against government Amendment 78P. I heard what the Minister said about hoping that there would be no insolvencies, but the Government appear to be expecting a number of registered providers to become insolvent during this Parliament and for the marketplace to have fewer larger housing providers. That will mean that some of the smaller ones will go to the wall.
On Amendment 78P, the land over which there is a current planning permission belonging to a registered provider that has now become insolvent would be sold on. Presumably, that would be to a developer for it to carry out the extant planning permission. However, the Section 106 planning obligations that the local authority in good faith had attached to the granting of the application, in order to serve both the existing communities around the site and the residents who would move into the proposed dwellings once the site been completed, would be waived. I fear that this is gerrymandering on a large scale and does not serve the communities within the local authority concerned at all well.
Of course, removing the planning obligations means that either the developer gets a bargain or that the housing administrator is able to get a higher price for the land. Either way, the local communities will suffer as no leisure or community facilities will be provided which were the subject of the original planning application. I fear that this is penny-pinching and shabby in the extreme.
Lord Porter of Spalding
My Lords, I had no intention of speaking at this point because I have an amendment in the next group, but we need to stop perpetuating this myth that social housing is subsidised by the taxpayer. Well-prepared, well-delivered social housing is a financial benefit for this country. All the money we have mortgaged in those properties is about a third of its total value. If we are truly progressive we should be looking at how we sweat the asset that we already have tied up in there. There is no need for the Treasury to put fresh money into it. We just need to utilise the existing stock in a way that maximises its benefit for the whole country. That said, I will sit down now, as I am waiting to speak later.
Lord Beecham
I congratulate my worthy successor as chairman of the Local Government Association on disabusing his colleague of the notion I referred to—that the taxpayer is funding council housing and subsidising people who should not be subsidised. It is simply not true, and I am very glad that the noble Lord, Lord Porter, made that point.
I and all on our Benches support the amendments in the names of the noble Lord, Lord Kerslake, and of my noble friend Lady Lister. I also endorse the comments of the noble Lord, Lord Shipley. He made the valuable point that we talk too much of “houses”, or, as I think Churchill once described them, “units of accommodation”—not, he thought, an appropriate phrase—but we ought to regard them as homes. In that context I remind the noble Lord, and other noble Lords, that homes with a spare room are also homes. They, of course, are subject to the bedroom tax. We do not want to reopen that debate, but it is analogous, really, to the way in which the Government look at social housing.
The Bill’s provisions about secure tenancies—in effect turning them into insecure tenancies—say a great deal about the Government’s professions of localism and their attitude to council housing. As other noble Lords said, councils were given the power by the previous Government to allocate properties on the basis of a two-year to five-year tenancy. I shall come back to some findings on that in due course, but they currently have that choice.
We take a diametrically opposite view from the Government, who simply replace the decision-making of local authorities by imposing their own solution. Local authorities should be free to determine their policies in this and other areas, subject to a requirement to provide, where relevant, at the least a basic level of service and entitlement, whatever the service may be. The Government approach the issue from the other end: councils should do only what the Government condescend to allow them to do. When it is convenient for the Government to pass the buck—as, for example, in the case of abolishing the council tax support scheme—they will do so, but when councils do not wish to subscribe to the Government’s distaste for the provision of council housing they have to conform.
Heriot-Watt University recently published an interesting study under the somewhat daunting title Welfare Conditionality—Sanctions, Support and Behaviour Change, dealing with the issue of fixed-term tenancies as provided by Clause 113 of the Bill. These have, as we have heard, been an option for local councils since the Localism Act 2011—a misleading title if ever there was one. Now they are to be compulsory, subject to the possibility of extension, on any future tenancy. The report avers that, taken together with pay to stay, the Government’s vision is one of,
“catering … for the very poorest on a temporary basis”.
Many councils that adopted the concept of two-year to five-year lets are regarded as being “disillusioned about their merits”, not least with regard to,
“the scope for using them to generate additional social lettings in high demand areas”,
and there is scepticism about the use of the mechanism to promote social mobility or positive tenant conduct. There is a suggestion that behaviour policy lay partly behind the scheme, so you would reward people by allowing them to stay in the property beyond two to five years if their behaviour was appropriate.
The latter point has been a factor in the promotion of the concept, but one for which there is little evidential support, the Heriot-Watt report says. Several academic authorities are quoted, on the other hand, as supporting the view that security of tenure has been an essential element of social housing. Yet this is already threatened by the total benefit cap for families with more than two children, who could find even social housing rents unaffordable. In any case, some two-thirds of all social housing, council and housing association properties are offered with a probationary period, but only 13% of new general-needs lettings were made on a fixed term basis in 2014-15. Interestingly, the advice from the Department for Communities and Local Government was originally to let for five years, with a two-year term as an exceptional alternative. Indeed, most local authorities that have taken advantage of that option have let for three to five years—the latter in effect now becoming the maximum, rather than the minimum, term under the Bill’s provisions.
Even where housing associations adopted the option, the report discovers growing disillusionment—especially where, as in high-demand areas like London, shortage of housing makes finding alternative accommodation exceedingly difficult—while the costs of managing the process were becoming disproportionately high. Those costs, of course, have to be met from within the housing revenue account and therefore by tenants in general. Conversely, there are areas of lower demand where it simply makes no sense to make people move on. Of course, the impact on householders and on communities can be considerable. Why should tenants invest in their homes if they have only limited tenure? Where, given the shrinking availability of affordable social housing to rent, are they supposed to go? If to the private rented sector, at what cost to them or the taxpayer if housing benefit has to be paid to cover the higher rents? Does not such pressure also feed through to ever-rising house prices?
The amendments in this group seek to minimise the damage to what has been a key contributor to the well-being of individuals, families and communities, namely the provision of decent, affordable, secure homes—as legitimate a part of overall housing provision as owner-occupation. Of course, as many other countries, not least in Europe, demonstrate, we have among the highest rates of home ownership of any country in Europe. Choice should not be confined to those who can afford—with or without generous subsidies, in the case of starter homes—to buy, but should be available to those who cannot afford it or who do not wish to buy. They are not second-class citizens. The Government should recognise that in the provisions they make in the context of tenancies in the social housing sector.
Lord Beecham
I am grateful to the Minister. As she will know, we have the last day of Report on Monday and Third Reading is on Wednesday, which gives us very little time to consider amendments that the Government may table. They may be perfectly adequate —one lives in hope, if not expectation—but they may not, and we and other Members may want to table amendments for Third Reading, so we really need to know what the Government are doing by Monday at the latest, because no amendments can be tabled after Tuesday. If we can have an assurance about the timing, that will be very helpful.
Baroness Evans of Bowes Park
My Lords, we are acutely aware of the timing issues, so yes, I give that assurance. I fear that it may mean that we will be working more closely together over the coming days than we have been already.
Lord Beecham
“(c) separate plots on which gypsies, travellers and travelling showpeople can have both residential accommodation and space for the storage of equipment”
Lord Beecham
My Lords, I move the amendment, which is in my name and that of the right reverend Prelate the Bishop of St Albans, the noble Baroness, Lady Bakewell of Hardington Mandeville, and my noble friend Lady Whitaker, and shall speak to Amendment 94, in the names of my noble friend Lady Whitaker and the noble Baroness, Lady Bakewell.
The amendments, which were discussed in Committee, are designed to make explicit reference to the housing and other needs of the Gypsy and Traveller communities. The Housing Act 2004 required housing authorities to assess the accommodation needs of Gypsies and Travellers and allowed the Secretary of State to provide guidance on how this duty has to be carried out. That was effected in 2007.
The Bill dispenses with that requirement on what I can only regard as the specious grounds that it is unnecessary in the light of the fact that housing authorities are under a general duty to consider housing needs and that the Government are consulting on guidance to local authorities in relation to Gypsies and Travellers. As I pointed out in Committee, however, the 2004 Act provision was promoted because it was apparent that the requirement of the earlier Housing Act 1985 on councils to consider the housing needs in their district with respect to the provision of further housing accommodation was not being implemented for this exceptional community. In reality, in too many areas, no provision was being made at all, or some of it was patently inadequate. I cited at the time the views of the Planning Officers Society, which believes that the change will provide an excuse for reluctant authorities not to make provision.
Concerns were also expressed by the All-Party Parliamentary Group for Gypsy, Travellers and Roma, the Catholic Association for Racial Justice, the chairman of the GLA Housing Committee, and the eminent QC Mark Willers, and important observations were made by the EHRC. The latter observed that the rate of homelessness in the community was as much as 20% and that the provision in the Bill might well be in breach of Article 8 of the convention, Articles 4.2, 5 and 27 of the European Framework Convention for the Protection of National Minorities, and Article 2 of the International Covenant on Civil and Political Rights. It pointed out that the useless impact assessment in this Bill—the adjective is mine, not the commission’s—failed to deal with the equality impact, despite this actually being required by Section 149 of the Equality Act.
Deep concerns were expressed in Committee by the right reverend Prelate the Bishop of Southwark and the noble Baronesses, Lady Whitaker and Lady Young of Old Scone, and the noble Lord, Lord Stunell. The noble Lord, Lord Younger, who is to reply tonight, sought to allay these profound misgivings in Candide-like fashion, but it is impossible to conclude that the Government—if not the Minister personally, and I acquit the Minister personally—have not been motivated by the desire to mollify those who simply do not want provision to be made for this small and vulnerable community.
Replying to a letter from the Chair of the GLA Housing Committee protesting about the proposed change, the noble Baroness, Lady Williams, stated that,
“the clause seeks to remove the perception that, because Gypsies and Travellers have specific mention in legislation, they somehow receive more favourable treatment”,
that the Government want councils to assess the needs of communities as a whole and that,
“Gypsies and Travellers are not separate members of our communities”.
With all due respect to the noble Baroness, who is happily not in her place at this moment, this is simply disingenuous. They are groups with special needs that have too often been ignored, hence the 2005 Act. The Bill’s provision is a sop to those who do not wish to recognise these special circumstances.
In Committee, I referred to an organisation called Planning Direct, which actually boasted of its success rate of 100% in preventing the development of Gypsy and Traveller sites for parish councils. It is that approach that the Bill will be interpreted as implicitly supporting, whatever emollient words Ministers might utter. How much better it would be if they endorsed the positive and, as it turns out, cost-effective policies of councils such as Leeds, which take their responsibilities under the 2005 Act seriously, to the benefit not only of the Gypsy and Traveller communities but of society as a whole.
It really is important that the Government acknowledge that it is necessary to cater for the needs of these communities. Simply assuming that they will be catered for by merging them into the general provisions of the Housing Act does not meet the circumstances of the case. Too often, there is hostility at local level to such provision, which has to be sensitively sited and developed—I quite understand that—but, frankly, what the Government are doing here is going to make it more difficult for the needs of this group to be met and easier for people to object to it. It will provide cover for a rather unpleasant streak in our social and political life, and I hope the Government will think again.
Viscount Younger of Leckie
I believe I answered the question earlier by saying that there is an obligation to look at the needs of all the population including, particularly, those of Gypsies and caravan and houseboat dwellers. If local authorities are failing in their duty fully to assess—I am sure there are very few—the law is in place for redress to take place.
I was attempting to answer a question raised by the noble Lord, Lord Beecham, who said that the equality impact assessment failed to deal with the equality impact. The decision to introduce the clause was made with due regard to the Equality Act 2010. There is a requirement for local authorities to assess the needs of everyone, including those with protected characteristics. As I said earlier, this clause does not change that.
The noble Baroness, Lady Bakewell, raised the experience in Wales, where there is a legal duty to provide sites. We do not believe that this is necessary because our planning policy for Traveller sites is clear. Local planning authorities should identify and annually update a supply of sites to provide five years’ worth against locally set targets. I hope that also answers more fully the question from the noble Lord, Lord Stunell.
Finally, the noble Baroness, Lady Bakewell, asked whether the clause contravenes legal obligations on equalities. I may have addressed this through answering the question from the noble Lord, Lord Beecham, but the decision to introduce the clause was made with due regard to the matters set out in the Equality Act. I hope that, with these explanations and assurances, the noble Lord will withdraw his amendment.
Lord Beecham
My Lords, I listened with interest to the noble Viscount. It seems to me that the Government are adopting a Janus-like posture, wanting to give one impression to the community affected and another to the general community. I do not find that particularly palatable. We would be sending the wrong message if we simply accepted the Government’s position, and I wish to test the opinion of the House.