Mr Peter Pike (Burnley, Labour)

I remind the Committee that with this we are discussing the following:

Government amendments Nos. 4 to 7.

Government amendment No. 10.

Amendment No. 221, in

clause 8, page 6, line 39, at end add—

'(d) their function under this Part in responding to emergency or urgent situations.'.

Government amendments Nos. 11 to 15.

Government amendment No. 20.

Government new clause 4—Emergency remedial action.

Government new clause 5—Notice of emergency remedial action.

Government new clause 6—Recovery of expenses of taking emergency remedial action.

Government new clause 7—Emergency prohibition orders.

Government new clause 8—Contents of emergency prohibition orders.

Government new clause 9—Appeals relating to emergency measures.

I believe that Mr. Davey had the Floor when the Committee adjourned this morning.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

Thank you, Mr. Pike. It is a great privilege to welcome you to the Chair, but I believe that I had sat down, and that the Minister for Housing and Planning was nearing the end of his comments—indeed, it is possible that he had sat down and that we were getting close to a decision. That is my recollection.

Mr Peter Pike (Burnley, Labour)

And here I had hoped to hear some scintillating comment from the hon. Gentleman. I call the Minister.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

Let me concur in two respects with the hon. Member for Kingston and Surbiton (Mr. Davey). First, I, too, extend a warm welcome to you as Chairman, Mr. Pike. I have had the pleasure of serving under your expert, wise and benevolent chairmanship on many occasions. I look forward to you exercising all those wonderful qualities in our proceedings. Secondly, I concur with him that I had concluded my observations.

Amendment agreed to.

Amendment made: No. 4, in

clause 1, page 2, line 4, leave out 'ones' and insert 'kinds of enforcement action'.—[Keith Hill.]

Question proposed, That the clause stand part of the Bill.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

Several issues have not been covered under the two groups of amendments, and I would like to examine them now.

I welcome the new rating system. A lot of research and consultation has gone into it, and most outside experts and local authorities say that we are moving towards getting it right. There are some details from which we shall try to iron out the final wrinkles—we will come to them in the next and other clauses—but it is worth putting it on the record that the system is an improvement. However, there may be an argument to be made in relation to a later set of amendments on how we should introduce the version 2 guidance, because that version has not yet been piloted and tested. Overall, the experience of piloting version 1 has led to some improvements—as, of course, has the Select Committee's report.

I have a pretty fundamental question about the process for the Minister. There is a debate about adopting a numerical system that relies on calculations to produce a number, and about the extent to which that will allow environmental health officers to exercise discretion and judgment. The old system was very much judgment-based, although there were lots of guidelines and advice. In the early stages of developing the new system, the Government tried to operate a purely numerical system, but the experience of the version 1 pilot caused them to change to a system that aims to combine numerical assessments and judgments. Perhaps the Minister can say a little bit more about that on the record.

Although there are references to it in the guidance—which is great reading for people who are having problems getting to sleep at night—it would be good if the Minister clearly told those environmental health officers who are worried by the new numerical system that their judgment will decide whether something is a category 1 or a category 2 hazard. That is important, not only to assuage their concerns, but because the Minister knows that if it were just a numerical value that determined how the rating system worked, there would be a danger that legal challenges would focus on the details of the calculation.

Although the version 2 guidance notes are admirably clear, the idea that the calculation is incontestable would not stand up in court. There is a great deal of judgment within the calculations, so there would be problems pretending that it is totally scientific and numerically led. Of course, the Government have moved from a single figure to a banding system, about which we will say more during the debate on the next clause. However, even if something falls into one of the bands, it is still ultimately the judgment—not the score—that puts it there. That point must be clarified. It is important that the Minister puts that on the record, because it will be fundamental to how the system is introduced and administered.

Although we now have the version 2 guidance, I should like the Minister to make it clear that the Government are taking a flexible approach to operation. In an earlier response to the hon. Member for South Holland and The Deepings (Mr. Hayes), the Minister said that it was important to show that there is certainty in the framework. I agree. However, we want flexibility within certainty. In other words, if the version 2 guidance tell us that the system is not up to snuff, and the Government have the powers under the Bill that I think they do, we should ensure that the system can be tweaked in the light of the experience of the implementation of version 2.

There are other points to be made about the system, but I shall make them in relation to other clauses. I shall focus on the principal issues arising from the shift from the old fitness standards to the new rating system. If the Minister can reassure the Committee that it is not just a calculations-based system, we should, in principle, let the clause stand part of the Bill.

Dr Brian Iddon (Bolton South East, Labour)

I warmly welcome the introduction of the housing health and safety rating system. I am sure that most people agree that it is a big improvement on the existing housing fitness system. I particularly welcome the emphasis on safety as well as health and the introduction in more than 24 categories to which inspectors will have to pay attention of items such as lead pipes, asbestos, radiation, carbon monoxide, and so on.

Section 606 of the Housing Act 1985, which requires local authorities to submit a written report to the authority on the unfitness of properties and the potential for clearance of those properties, and requires the authority to consider the reports, will be repealed and replaced by clause 4 of this Bill, which we shall discuss later. That only requires local authority officers to inspect premises on receipt of a complaint from a justice of the peace, or a parish or community council. My right hon. Friend the Minister has already explained to a small degree how that would work.

I am mainly concerned about the costs, which are highlighted in the regulatory impact assessment of the Bill and reported on page 29 of the Library research document. It states that

''The annual total cost, in England and Wales, of works carried out''

by local authorities to meet the requirements of the new HHSRS scheme

''is estimated as approximately £260m, at 2001 prices.''

Costs under the present housing fitness arrangements are £470 million. There is a staggering difference of £210 million, with the sum decreasing from present to future. I am concerned about that, but there might be a simple explanation for it, and that is what I seek.

To put the point another way, over a 30-year period the net present value of complying with the new scheme is calculated to be £4.8 million, compared with £8.7 million for the housing fitness standards. That is a considerable difference. I hope that we will not spend a lot less on the needs of people who live in poor-standard housing.

I am sorry if I have put my right hon. Friend on the spot. I can wait for the answer to my question if he has not got it for me now. However, I am concerned about those figures.

Mr John Hayes (South Holland & The Deepings, Conservative)

I shall raise three issues at this juncture. First, I will say a few words about the contribution of the hon. Member for Bolton, South-East (Dr. Iddon). He makes an important point, which was not lost on the Opposition when we were studying the documents to which he referred. We will have another opportunity to discuss the matter, as there are later amendments on issues relating to the training and resourcing of local authorities to deal with enforcement matters. However, there is an incredible quality to the savings projected in the documents, and that raises a concern, which the hon. Gentleman articulated, about whether there will be adequate resources for us to make improvements, rather than stand still—or, indeed, move in the wrong direction.

The second issue relates to the comments made by the hon. Member for Kingston and Surbiton. There is a problem relating to specificity. There is a tension between having an appropriate discretion to deal with matters with sensitivity—I am sure that those responsible for enforcing the measures will want to exercise that—and having a system that is sufficiently clear that everyone understands what they have to do to enforce it, and those at the other end of process understand what is being forced upon them. In this morning's sitting the Minister for Housing and Planning talked about objectivity and transparency, but that transparency is best delivered by a system that is clear and easily understood, and in which things are well defined. The numerical system that has been proposed might satisfy those entirely proper concerns.

Although I take on board the point made by the hon. Member for Kingston and Surbiton, having examined the matter and the relevant documents, and having received the briefing that was made available to hon. Members, I am inclined to be in favour of a clear numerical system that everyone understands and that can be applied with consistency. I say that not least because while it is important that there is discretion to take account of local circumstances, it would worry me if different local authorities dealing with the same

landlord but different houses were applying entirely different systems. Although it is important to be flexible, there is a strong case for consistency. On Second Reading, I said that it would be unacceptable if a landlord with houses in several different areas were subject to a range of different regimes. We can discuss that when we come on to later parts of the Bill on licensing and so forth.

That point also applies to fitness standards. It would be inappropriate if there were a wide range of fitness standards that are applied in different ways by different authorities. I do not think that the hon. Gentleman was implying that, and he certainly was not advocating it. However, it may be the consequence of his well meaning but perhaps misplaced concerns.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

Let me be clear. I think that the numerical framework is helpful in terms of providing direction and a system that aims to be transparent and fair for different properties and different landlords. I do not think that achieves that aim, but my real concern is that if decisions were to rest simply on the numerical score, the result would be a charter for lawyers. It would also prevent the professional judgment of environment health officers on the ground from being exercised. Yes, we need the new system to ensure transparency and fairness, but ultimately we need to allow a trained professional to exercise discretion about which property is put into what band. Can the Minister reassure us about that?

Mr John Hayes (South Holland & The Deepings, Conservative)

I am always anxious to be fair to the Liberals, despite my instinct not to be. The hon. Gentleman made a sensible point about considering the response to the evaluation of version 1, which is detailed in the consultation enforcement guidance document that is available to us. It deals specifically with the experience of local authorities in applying hazard assessments. If the hon. Gentleman remembers, the professionals who are involved in trialling such an approach expressed concerns about lacking ''confidence in scoring hazards.'' Although on the surface, that argument seems in support of the hon. Gentleman's argument, it may underline a simple lack of confidence in assessing hazards. That is a new area for some officers who will be involved in such matters. I do not underestimate the change in culture that will be required or the retraining. Furthermore, the hon. Member for Bolton, South-East referred to the resource implications.

I come now to my third point, although the hon. Member for Kingston and Surbiton has made it more quickly. I refer to assessing how such matters bed down. We are becoming more sophisticated about the way in which we assess housing and how we judge fitness, so the changes are appropriate. To repeat what I said this morning, however, given their complexity and the trial that they will undoubtedly be put under, it is important that matters are reviewed so that, if necessary, adjustments and changes can be made.

This stand part debate gives us an opportunity to press the Minister on such matters. We want him to give us a more clear response. His first answer to my intervention was lamentable. I am glad that you were

not in the Chair to hear it, Mr. Pike. He said, ''The Government review everything.'' Crumbs, my son could have come up with that response—and he is only three. The right hon. Gentleman's second answer was slightly better than that. He said that perhaps it was appropriate to look again at such matters. He gave us a generous, but slightly woolly, assurance.

Perhaps under pressure from the hon. Member for Kingston and Surbiton and others on his Benches who have made thoughtful comments about the clause, the right hon. Gentleman might give us a firmer undertaking than that. Given the proper spirit of good will that has underpinned our contributions to the debate and the general view in Committee that the move is helpful although testing, we might receive a formal pledge that the Government will undertake a proper review in which the matters can be discussed intelligently, and make the appropriate changes to ensure that the provisions work properly.

Mr Robert Syms (Poole, Conservative)

I shall be brief. I support what the hon. Member for Bolton, South-East said about costings. If they have not done so already, perhaps the Minister's civil servants will look at page 29 of the Library brief about respective costs. Perhaps I am being cynical, but it is difficult to believe that the new system will save money over the old system, especially when we read the complexities in the documentation that we have been given. The Committee needs to receive a few more figures on the likely compliance cost and the cost on local authorities.

We have been told that the Government have committed themselves to funding fully any new burdens, but we are not entirely sure what those burdens are. The Office of the Deputy Prime Minister said that it had no firm estimate of the likely cost of administering the new system, although its regulatory impact assessment comes up with certain figures. The figures in the Library brief are quite startling. The brief sets out the cost of the proposed system as against that of the existing system, and suggests that over a period there will be savings of nearly £4 billion—presumably to landlords rather than to local authorities, although perhaps not.

It is difficult to know what is the most appropriate part of the Bill under which to mention the matter, although no doubt it will be apposite to do so when we are talking about local enforcement and some of the charges that local government will have to levy. The subject needs to be fleshed out a little more; otherwise, our friends in local government will beat me over the head with a telephone directory and say, ''You went through the whole Bill, and look at what it's going to cost Poole'' and ''You allowed the Minister to get away without giving us some decent figures on what the system will cost us.'' The reality is that we do not have enough information to make a judgment. If we are to hold the Government to funding the new burdens fully, we need more figures and information on cost and compliance cost.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

Let me begin by expressing my gratitude for the broad support for the new system extended by the hon. Members for Kingston and Surbiton and for South Holland and The Deepings. The hon. Member

for Kingston and Surbiton asked what he described as a question about process. The hon. Member for South Holland and The Deepings asked about the clarity of the system and the process. I absolutely agree with him about the need for consistency of application of the regime; that reflects the importance of guidelines and training.

In response to the questions about process, let me take the Committee through the procedure. Rather like Max Bygraves, I want to tell the Committee a little story. [Interruption.] I think that I have rather revealed my age with that observation. The vast majority of the Committee are far too young to recognise that name.

I ask the Committee to imagine the process by which the environmental health officer or the surveyor inspects premises. The Committee is probably clear by now that action by the representative of the local authority will be based on a three-stage consideration. First, there is the hazard rating, determined under the health and safety rating system. Secondly, there is consideration of whether the authority has a duty or power to act, which is determined by the presence of a hazard above or below a threshold prescribed by regulations—category 1 and 2 hazards. Thirdly, there is whether the judgment is the most appropriate means of dealing with the hazard, which was raised by both hon. Gentlemen.

The purpose of the assessment is not to set a standard but to generate objective information in order to determine and inform enforcement decisions. The health and safety rating system assesses—and let me slightly correct my hon. Friend the Member for Bolton, South-East, who is highly expert on the subject—29 categories of housing hazard. The system provides a rating for each hazard. It does not provide a single rating for the dwelling as a whole or, in the case of multiply occupied dwellings, for the building as a whole.

A hazard rating is expressed through a numerical score that falls into a band, and there are 10 bands. Scores in bands A to C are category 1 hazards, and in bands D to J are category 2 hazards. The thresholds between bands D and C is 1,000, or an equivalent risk of death over a year of 1:1,000. The hazards that can be assessed include the major hazards found in the home: damp, cold, radon, fire and falls. The health and safety rating system assessment is based on the risk to the potential occupant who is most vulnerable to that hazard. For example, stairs constitute a greater risk to the elderly, so that group of people is considered the most vulnerable in assessing stair hazards. The very young are susceptible to low temperatures, as are the elderly. A dwelling that is safe for both those groups, who are most vulnerable, is safe for all. The surveyor gathers the facts.

The hazard is scored using the details of any deficiencies. That requires two judgments to be made: first, on the likelihood of an occurrence that could result in harm over the next 12 months; and secondly, on the range of possible outcomes. The assessment takes account of the average likelihood of a hazard occurring in a particular type of dwelling. The range of

outcomes extends from death or serious injury to visits to the doctor for persistent but non-threatening conditions. Classes of harm are weighted.

For the benefit of the hon. Member for Kingston and Surbiton, the inspector uses his or her professional judgment to relate the circumstances that they find to the average circumstances for that type of dwelling, and to ascertain how far above or below the average are the conditions in that dwelling. The hazard score is the sum of the weightings for each class of harm, multiplied by the likelihood of an occurrence and the set of percentages showing the spread of harms. That is set out in chapter 3 of version 2 of the HHSRS guidance. In assessing the severity of a fall hazard, the surveyor will consider the steepness of the flight of stairs, whether there is a handrail and any defects to it, and whether there are other defects in the vicinity of the stairs. The inspector will consider the impact of a fall on an elderly person, and find out whether the surface is hard or giving and whether there is glass.

The courses of action that are available to authorities where they have either a duty or power to act are as follows: to serve an improvement notice, which performs a similar function to a repair notice; to make a prohibition order, which closes the whole or part of a dwelling, restricts the number of permitted occupants or suspends those types of notice; to serve a hazard awareness notice; and to make a demolition order or declare a clearance area. The hazard rating is based on the most vulnerable potential occupant. Authorities will be able to take account of the vulnerability of the actual occupant in deciding the best course of action to take to deal with the hazard. The system will ensure that all the hazards that are typically found in a house can be assessed, thereby enabling the authorities to prioritise and target the most serious hazards that it finds in the local stock. That is a proportionate response. As a consequence, landlords will not be asked to carry out unnecessary work.

Let me say a little more about judgment reports and flexibility. I should like to emphasise that the environmental health officer's assessment of the property, which will generate a score, will be based on their professional judgment of the condition. We do not accept that that approach is flawed. The population base data are provided to inform the judgments; they provide national averages for likelihoods and outcomes of a particular property type. The officer will undertake the assessment of the property based on its condition and use the data to produce a score based on his or her judgment. We do not agree that it is impossible to apply the research findings to practical decision making. The data are produced on the best evidence available.

Environmental health officers who currently, and predominantly, carry out existing fitness standards have to make judgments based on an assessment of condition. That requires an understanding of cause and effect. We are not asking them to make quantitative judgments; that is a function of the health and safety rating system scoring stage. The professional judgments should be qualitative and informed by the hazard scores. I assure the hon.

Member for Kingston and Surbiton that we are confident that an enforcement decision based on assessments made under the system can be defended in court.

I have dealt with that matter at some length—but in response to hon. Members' questions on the process. I hope that my reply has been helpful.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

The Minister was helpful. I should like to clarify whether the Government's consultants who reviewed the system, DTZ Pieda Consulting, made it clear that when evidence went to court it should be primarily descriptive rather than numeric, so that the officer would explain to the court the nature of the hazard. It is important, given Pepper v. Hart, to press the Minister. Would the court be focused on the description of the hazard provided by the officer, or should the court be more minded to take account of the numeric value that the officer had calculated?

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

The hon. Gentleman tempts me, but I have a degree of trepidation in presuming to make a judgment about the way in which the courts would respond to such an issue. I am not a legal person. However, my understanding is that it is the role of the courts to make a judgment about the reasonableness of behaviour. On this question I defer to my legal colleagues, at least on this side of the Committee Room. If they decide to intervene in my support I shall be extremely grateful; I hope that otherwise they will remain silent. That is the basis on which the court is likely to make a judgment. If I were to venture an answer to the hon. Gentleman's question, it would be upon description rather than the score that the court would make a judgment. However, that is an absolutely tentative response on my part.

Mr Edward Davey (Kingston & Surbiton, Liberal Democrat)

I am not trying to score a debating or political point; I just want to know the answer. I understand why the Minister chooses his words very carefully. However, it is pretty important, both in this clause stand part debate and when we discuss clause 2, to be clear about what the Government intend. If more weight is given to the numerical value, we risk seeing clever barristers unpicking the calculations, looking at average population criteria and all the rest that is wrapped up in the guidance—no disrespect to barristers, such as the hon. and learned Member for Redcar (Vera Baird)—possibly causing local authority lawyers to go to great expense, increasing the cost of the system. It is very important that we have clarity on this issue; otherwise, we could be creating real problems in terms of implementation.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

In at least one respect I can set the hon. Gentleman's mind at rest. In due course we will table amendments that will change the judicial process, as it were, from the court system—extremely expensive, as he rightly says—to what we hope will be a more expert and cost-effective body, namely the residential property tribunal; but more of that later.

I confess that I am slightly winging it here. I shall now consider the circumstances in which the action will proceed through the judicial or quasi-judicial process. It would be about the appropriateness of the enforcement action. That action would be based on

the identification of a danger in a property. Essentially, that would be based on the culmination of the process I described earlier. The culmination of that process—of the inspector, surveyor or environmental health officer going into the property—is his or her judgment.

I believe that the court, or whatever, would make its judgment on the basis of the propriety of the description and not of the score. If I am wrong about this—although I have encouraging indications from the silent ones, to whom one hardly dare refer—I will confess my error to the hon. Gentleman and to the Committee.

The hon. Member for South Holland and The Deepings pressed me again on the issue of review. He found my earlier response to be, in that grand parliamentary phrase, made up of weasel words. I am not sure that he will find my response now very different. I assure him that we will continue to review the system and monitor how it works out, with a view to making adjustments. In due course, it may be appropriate to add hazards to the list. However, as for a formal, proper review with a report to Parliament, no, I will not make such an undertaking at this stage. Nevertheless, I assure him that we will keep a very careful eye on the process. If changes have to be made, we will make them and report them to the House in one way or another.

My hon. Friend the Member for Bolton, South-East and the hon. Members for South Holland and The Deepings and for Poole (Mr. Syms) raised questions of cost. While I have been describing the health and safety rating system, inspiration has winged its way to me and I am now in a position to attempt at least an answer to the question of the costs to local authorities under the new system compared with the fitness standard. I think that I am right in saying this to my hon. Friend: the costs that he quotes—from the Library note, I think—relate to the compliance costs for landlords, not to the operational costs. Compliance costs are estimated to be lower, because hazards are often inexpensive to put right. For example, a window catch or frame may be enough. We estimate that the start-up costs for authorities are between £4 million and £5 million. That is for training and the kit, which may involve IT or be paper-based. We anticipate that the ongoing costs will be about the same and we have said that we will make the appropriate allocation to local authorities as part of the local government financial settlement.

Mr John Hayes (South Holland & The Deepings, Conservative)

Let me be absolutely clear about the financial issue. My hon. Friend the Member for Poole has helpfully passed me some inspiration too—if that is the euphemism that we are to use. As I glance again at page 29 of the Library paper, I am surprised by what the Minister has said about compliance costs. The paper does say that

''the cost of complying''

with the new standards

''is calculated as £4.8bn, as compared to £8.7bn''.

It goes on to talk about the costs to local authorities. I want to get this absolutely clear. The Minister tells us that compliance with the new standards will represent

a massive saving to landlords, so the new fitness standards will be much less expensive for people to implement. That rings a few alarm bells. I do not want landlords to pay any more than they should—heaven forbid; I used to be one myself. However, we are being told that the new system will cost landlords a fraction of the cost of the old one, and I am concerned about that. Is the implication that there will be some deterioration? I think that that would be the public's view, if they were to discover these things by reading the record of the debate—which they surely will, in great detail and with real enthusiasm.

Mr Keith Hill (Minister of State (Housing and Planning), Office of the Deputy Prime Minister; Streatham, Labour)

I feel that I need to respond to that, as it appears that my own Department's regulatory impact assessment is quoted in those figures.

We are not in the business of reducing the necessary investment that we expect landlords to make with regard to the condition of their properties; that goes without saying. Nevertheless—I make this point as a possible explanation for the figures, assuming that they are accurate—we have always said that the new system provides a more targeted and selective approach to dealing with hazards in building. It is important to remember that one weakness of the old fitness test standard was the fact that it required the identification of one or other of the nine defects and prescribed a series of responses but—this was the crucial difference between the old system and the new—it did not relate the hazard to the occupant of the premises. We will say a lot more about that. To that extent, the new system has a less broad-brush approach to dealing with hazard. It is more precise. It identifies the impact of a hazard on the occupant, and it might therefore produce fewer costs for landlords.

We believe that the report refers to the cost of works carried out, not to local authority costs. We think that it states what I have maintained, which is that dealing with hazards can be reasonably inexpensive. As I have said, it is our contention that the new system provides more discussion to tailor work. I am grateful for that further item of inspiration, which largely points up what I was able to work out myself.

The hon. Gentleman has raised an important issue, and it is incumbent on me to offer a more detailed response. I undertake to do so in due course, if the Committee will be patient.

Question put and agreed to.

Clause 1, as amended, ordered to stand part of the Bill.