New Clause 9
Welfare Reform Bill
12:00 pm
Danny Alexander (Shadow Minister and Disability Spokesperson, Work & Pensions; Inverness, Nairn, Badenoch and Strathspey, Liberal Democrat)
I beg to move that the clause be read a Second time.
The new clause may be slightly technical but it makes an important point. It would amend ground 8 set out schedule 2 to the Housing Act 1988, with which members of the Committee will be familiar. Private landlords and housing associations can use ground 8 to seek possession of accommodation let on an assured tenancy when a tenant has arrears of more than two months’ rent. Unlike other rent arrears grounds for possession, ground 8 is mandatory: the court has no discretion to decide whether it is reasonable to make an order for possession.
The proposed amendment to ground 8 in the new clause is designed to give the courts discretion in cases where housing benefit issues are outstanding—for example, the court can decide to adjourn the case or to suspend an order for possession. I believe that that will help to ensure that tenants are not evicted from their homes due to non-payment, or delay in payment, of housing benefits.
The Minister will be aware of the present position on delays in housing benefit decisions and the problems that can sometimes cause. The average time taken to process a new claim for housing benefit in 2004-05 was 36 days and the worst-performing authorities took approximately 117 days to process a new claim. I know that those are 2004-05 figures and that the Government have been trying to improve them. In fairness, it is worth noting that one of the benefits of the local housing allowance pilot areas has been the speeding up of administration and the processing of claims. Having said that, if one looks at the different pilot areas, one can see that there is quite a degree of variety in the times taken to process and administer claims.
Certainly, the worst-case scenario of it taking 117 days to process a new claim takes us well beyond the two months’ arrears which currently allows possession to be sought under ground 8. Faced with such an application, the courts would have no choice, even if there was an outstanding housing benefit claim and all the evidence suggested that once that claim was processed, it would result in an award being granted. The way in which ground 8 is framed gives a court no option but to enforce possession. It important to say that under ground 8, a court has no discretion to refuse an order, whatever the reason for the arrears. It is unable even to adjourn the case. Ground 8 is open to private landlords and housing associations that use assured and assured shorthold tenancies but not to local authorities.
The inclusion of ground 8 in the 1998 Act was originally designed to stimulate the private rented sector and to make it easier for private landlords to recover their property. However, since 1993, private landlords have been able to gain possession of shorthold tenancies quickly and without a hearing under section 21 of the 1988 Act. I am sure that the Under-Secretary will be aware of the 2004 case of North British Housing Association v. Matthews, which explored in some detail the problems relating to ground 8, but I shall refresh the Committee’s memory on the point because the case starkly illustrated the problems caused by ground 8.
The housing association brought possession proceedings under ground 8 despite being aware that the tenant had an outstanding housing benefit claim. A county court judge decided that he had no choice but to grant an outright possession order. However,Ms Matthews subsequently received a backdated payment of housing benefit, which completely cleared her arrears and, what is more, put her rent account into credit. The Court of Appeal heard that where ground 8 is involved, the county court had no power even to adjourn the hearing for a short period to await a housing benefit payment. The Court of Appeal was troubled by that situation. Lord Justice Dyson concluded:
“It is a sad feature of contemporary life that housing benefit problems are widespread. To a substantial extent these are no doubt the product of lack of resources. But we do not consider that the non-receipt of housing benefit can, of itself, amount to exceptional circumstances which would justify the exercise of the power to adjourn so as to enable the tenant to defeat the claim. We acknowledge that this conclusion will lead to tenants who are in receipt of housing benefit having no defence to a claim for possession in circumstances where they are not at fault. The statutory scheme is, therefore, potentially draconian in its application.”
That is fair comment on the current powers.
The Under-Secretary, who is, like me, a Member for a Scottish constituency, will be aware that the Scottish Parliament and the Scottish Executive have already introduced measures to prevent the eviction of tenants with rent arrears caused by housing benefit problems. Section 12 of the Homelessness etc. (Scotland) Act 2003 amended ground 8 in almost precisely the same way as is proposed in new clause 9. However, section 12 goes further, requiring the court to have regard to non-payment or delay of housing benefit in deciding whether it is reasonable to make an order for possession under other rent arrear grounds.
The new clause may be technical in nature, but it has important implications. I am sure that everyone in the Committee who is concerned about social justice wants to make sure that where there are administrative problems with housing benefit, they do not leave the court with no choice but to order possession. I therefore hope that the Under-Secretary will accept the new clause, or make it clear that the matter is something on which the Government will table amendments in due course.
I am grateful to Shelter and Citizens Advice for their comprehensive briefing and background information on this important matter, and I look forward the Under-Secretary’s response.