Clause 6 - Compliance directions

Housing and Planning Bill – in a Public Bill Committee at 4:45 pm on 19 November 2015.

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Photo of Helen Hayes Helen Hayes Labour, Dulwich and West Norwood 4:45, 19 November 2015

I beg to move amendment 78, in clause 6, page 4, line 10, at end insert—

‘(6) Before issuing a compliance direction, the Secretary of State must take account of any local housing and planning documents based on an assessment of local housing needs.”

It is a pleasure to serve under your chairmanship, Sir Alan. There is a long-established principle that both planning policy and planning application decisions should be taken within a national framework in the context of considering local need. The coalition Government prioritised localism through neighbourhood planning and objectively assessing housing need. The Bill imposes a new obligation on councils in relation to starter homes, with absolutely no regard to objectively assessed local need. The new obligations do not cover other forms of affordable housing.

The Minister said a number of times that he sees starter homes as part of the mix. The Opposition support that, but it does not make sense, in that context, that such strong duties are being imposed on local authorities, in relation to starter homes, with no comparable measures to protect any other form of housing. Local need varies dramatically across the country. In each of my two boroughs, 20,000 people are on the waiting list for a council home. We have heard witness after witness query the lack of local discretion in the Bill for individual local authorities, and that is what the amendment would address.

Turning to some of the evidence we have received, the respected voluntary sector organisations Shelter and Crisis said that in most parts of the country, lower-income households would not be able to afford starter homes. They said that starter homes will primarily help couples without children and those on average or above-average salaries. They will be inaccessible to families on or below the Government’s national living wage in all but 2% of council areas. For single people on average wages or lower, only six local authority areas will have affordable starter homes.

The Home Builders Federation states:

“There is potential for market distortion if the numbers of Starter Homes that ministers are targeting to be built actually come onto the market. The effect is likely to be highly localised and could impact upon the saleability of units on new sites”.

The Royal Town Planning Institute states:

“Now not only is social rent and shared ownership potentially driven out and replaced by starter homes up to £250,000 in price, but this appears to be obligatory and not open to local negotiation. This lack of discretion may affect delivery.”

PlaceShapers states that it supports measures to increase home ownership

“but do not believe that this should be at the expense of those who also aspire to get on in life but are unable to afford to buy a home of their own.”

It believes that it should be left to the relevant planning authority to make decisions as to the mix of new homes.

All those comments are from respected organisations across a range of sectors saying that there is a need for more local discretion. The amendment would give local authorities a necessary safeguard by requiring the Secretary of State to take account of local need before issuing a compliance direction. That would help to ensure that the Government and the local authority are considering the same housing needs assessment and would give a safeguard that all types of tenure—the Minister says that he believes in all types of tenure—can be supported.

If local needs are overridden by the Government, the consequences will be serious. A reduction in the supply of homes for those on lower incomes risks exacerbating unaffordability and increasing the housing benefit bill. Combined with the housing benefit cap and the lack of regulation in the private rented sector, it will lead to an increase in homelessness. London already houses 49,000 households in temporary accommodation at considerable cost to the public purse. Without the amendment, which would create a safeguard that local needs would be considered, there is a considerable risk that the Bill will deliver new homes while ignoring the needs of those with the greatest housing need. That will make the housing crisis worse and cost the public sector more.

Without the amendment, there is also a significant democratic deficit. In London, borough planners have to take account not only of their local plans, but the London plan. All of that can be trumped by the new national-level requirement that is not subject to examination through a local plan process. How can the Minister be sure that Whitehall will know what is best in each locality and housing development? I do not think that he can. The amendment simply seeks to ensure that the new homes that are delivered, whether they are to rent or to buy, meet local needs.

The Minister has stated that the mix of tenures, among other things, will continue to be a negotiation between the developer and the local authority. If he is not willing to support the amendment, will he please explain how that will be the case? How is the Bill compatible with localism? How will the Bill not result in a reduction in the social housing provided for those in the greatest housing need?

Photo of Brandon Lewis Brandon Lewis Minister of State (Communities and Local Government)

Clause 6 provides for a compliance direction if a local authority is failing to comply with its starter homes duties. Where the council has a policy in a local development document that is incompatible with the starter home duties, the direction would say that that policy must not be taken into account when certain planning decisions are taken. The hon. Lady gave some figures and details that we heard in evidence from Shelter last week. We outlined after that session, and earlier today, that the figures for new build homes in constituencies around the country simply do not stack up to back that argument.

The compliance direction must set out the Secretary of State’s reasons for making the direction and must be published.

It is important that we deliver the starter homes so that people have an opportunity to buy a home of their own with the 20% discount. That will open up home ownership to a new range of people who aspire to own their home but have been locked out of the market probably for the best part of a decade now.

We have considered carefully how best to frame the compliance direction. The new statutory duty on councils to support starter homes should have teeth, otherwise it will not deliver the housing opportunities for first-time buyers that are so badly needed. We want to ensure the compliance direction presents a strong incentive to councils to support the delivery of starter homes, but we also want to ensure that local plans continue to shape planning decisions for an area. We want local plans by, for and with local people.

As drafted, the direction would act on a policy or part of a policy that is being used to prevent delivery of starter homes. The remaining planning framework for the local plan would remain in force. Communities will continue to shape development in the area, and this is a reasonable and balanced approach. The direction would not act on a neighbourhood plan policy or a London plan policy. I want to reassure hon. Members that it is our firm intention that the compliance direction is a backstop provision. It would rarely be used, but it can act as a strong incentive to deliver. There are other examples of planning law where a sanction exists to act as an agent of change, but it is used sparingly.

The planning performance regime, introduced in the Growth and Infrastructure Act 2013, has already driven quicker decisions on applications for major development, from 57% to 76% in 2015. Only three councils have had to be designated, two of which have already been lifted out of that category as performance has improved. I want to reassure hon. Members that a compliance direction would be issued only after very careful consideration of the evidence by the Secretary of State. Councils must report on their actions to support starter home delivery under the requirements in clause 5. This will be core evidence, but there will be the opportunity for councils to submit further evidence to the Secretary of State. Any exceptional circumstances could be considered at this point.

The hon. Member for Dulwich and West Norwood spoke to her amendment to require the Secretary of State to take into account planning documents based on an assessment of housing needs. The local plan will contain valuable evidence on housing need. As plans are updated, we would expect the evidence to consider the needs of first-time buyers. Up to date, the Secretary of State could choose to take such evidence into account. However, this sanction is about the statutory duty to promote the supply of starter homes. We will set out clear guidance as to how councils should work to fulfil this duty, but this is not a negotiable ask; it is a clear legal requirement to support starter homes for first-time buyers. If we are to achieve a real difference for first-time buyers—the step change we need and want to see—we must ensure all locations do everything they can to deliver those homes for first-time buyers at a rate they can afford.

The Secretary of State should have discretion as to what evidence is considered. If there is overriding evidence that the council has done everything it can to comply with the starter homes duty, but has not been able to deliver, that could be taken into account. The element of discretion is necessary to ensure we have an effective and operable sanction. I hope that with that assurance the hon. Lady will withdraw her amendment.

Photo of Helen Hayes Helen Hayes Labour, Dulwich and West Norwood

I thank the Minister for his response. However, I find it astonishing that he appears not to be listening at all to evidence from a range of very respectable organisations that are all involved in the delivery of  housing and deeply concerned about it. Councils across the country, including London Councils, which has given its support to the amendment, are deeply worried about the compliance direction. They are particularly worried about its use in order to trade off the needs of one type of housing need against another type of housing need.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Housing)

My hon. Friend is making a powerful point. Drastic action could be taken by the Government, which is likely to ensure that local authorities, in seeking not to be subject to a compliance direction, will indeed prioritise the delivery of starter homes above everything else. That is our concern.

Photo of Helen Hayes Helen Hayes Labour, Dulwich and West Norwood

I thank my hon. Friend for her intervention. She makes a very powerful point. I would like to return to the amendment as we progress through the Bill, because it seeks a simple assurance that local democracy will be the overriding consideration in the delivery of housing across all layers of decision making on housing. I beg to ask leave to withdraw the amendment, but I will not hesitate to come back to the matter at a later stage.

Amendment, by leave, withdrawn.

Ordered, That further consideration be now adjourned. —(Julian Smith.)

Adjourned till Tuesday 24 November at twenty-five minutes past Nine o'clock.