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Moved by Lord Best
75A: Clause 78, page 34, line 17, at end insert—
“( ) The regulations shall not apply if the Secretary of State determines that the cost for a local authority of assessing the incomes of its tenants would be disproportionate to the additional rental income achievable from this provision.”
My Lords, Amendment 75A would enable the Secretary of State to exempt a local authority from the requirement to raise rents for those earning over £30,000 outside London, or £40,000 in London, if the administrative costs of collecting the extra money would absorb a disproportionate amount of the extra cash. What would be disproportionate in terms of the cost of assessing incomes and collecting the extra rent? I accept that this is subjective but surely if more than one-third or more than 40% of what is obtained in additional rent goes on securing that additional rent, a line must have been crossed. If charities spend 40% of the donations they raise on raising the money in the first place, they come in for huge criticism. High earners could rightly protest if so much of the extra rent serves no useful purpose at all.
Is it likely that admin costs really could absorb up to 40%—or more—of the extra income raised? We have heard just how much work is likely to be involved in obtaining these higher rents. If the same cost as for housing benefit claims was possible, using the housing benefit team to do the job, it seems from the evidence we have had from a number of local authorities that the cost would be between £30 and £40 for each household investigated. Around one-third of tenants, on average, would have to be assessed as these are the tenants not receiving housing benefit. That is a smaller number than the numbers for housing benefit, so there would be fewer economies of scale and higher costs than for administering HB. With universal credit comes the change to the councils’ role, with councils having a smaller role in its administration, and piggybacking on the housing benefit process will no longer be possible, quite apart from the complications of the interaction between universal credit and housing benefit, as set out by the noble Baroness, Lady Hollis. So the admin costs for the higher rent regime will rise.
Let us take the figure as being somewhere between £30 and £40 a throw, not forgetting that there are set-up costs, such as the new computer program, and the costs of the appeals system, as well as the costs of returning overpayments of rent and compensation when mistakes have been made. The £30 to £40 per tenant not on housing benefit looks tight. Now let us consider the circumstances of an individual local authority. In an area of relatively high incomes for council tenants and a big gap between council rents and market rents—that sounds like central London—there may be some serious money to be raised. Conversely, in an area of low incomes for almost all council tenants and only a narrow gap between council rents and market—private rented sector—rents, there will be very little extra money to collect from higher earners.
I will try an example. In an unnamed local authority in the northern half of England, market rents are only £20 per week above council rents, and never more. The most that could be gained here from a higher earner is £1,000 per annum, which would be payable by any tenant earning more than £40,000, on the basis of the 10p in the pound taper. No tenant would be paying more than this, however high their income goes. We know that an average one-third of tenants will need to be assessed because they are not claiming housing benefit but we also know that nationally only 7% will actually be earning above the £30,000 threshold—£40,000 in London.
In my example, a smaller proportion than nationally will be in the higher earners category, perhaps 3% instead of the national figure of 7%. So for every 100 tenants, assessments will be necessary for 33— one-third—and extra rent will be collectable from seven, perhaps in this case only three because the area has fewer high earners. The 33 being assessed will cost, say, £1,200 per annum. The three will contribute, not the maximum of £1,000 per annum—£20 per week—but, perhaps, £300 per annum, yielding £900 per annum for the three of them, which is less a return in extra rent than the administration costs in my—possibly fairly extreme—northern local authority example.
The point is that there will be cases, even if they are not as extreme as that, in which even if there is not an actual loss from the system, there will be very slim pickings from this new arrangement. If the local authority, as in this amendment, was able to make the case to the Secretary of State that it is simply not worth collecting the money on this basis—costs are going to be higher than the revenue or at least 40%—then it seems entirely sensible that the Secretary of State would be in a position to say, in that case we will not proceed on this basis, it is not worth the candle. I beg to move.
My Lords, I support the amendment of the noble Lord, Lord Best. I will also speak to Amendment 81A, which I supported, and 81B, which I put forward and lead on. These amendments go to the fundamental question for local authorities of whether the costs they will incur will be properly recognised within the arrangements. As has been well put by the noble Lord, Lord Best, in some instances the costs may make the whole policy not worth putting in. In fact, we may find—depending on the outcome of all this—that the costs will raise a question about the whole policy. However, at the very least, in different housing markets it most certainly will raise questions. Therefore, it is absolutely right to say that in circumstances where it clearly does not make sense to implement the policy in terms of costs and benefits, there is provision to not proceed with it.
The other two amendments seek to be very clear that administrative costs will be covered. I speak specifically to Amendment 81B. Within the draft Bill, it says the Minister “may provide for deductions” to cover costs. In other words, it is a permissive choice for Ministers whether or not they make these deductions. It seems inconsistent with the intent of Government and therefore the amendment does something very simple, which is to change the “may” to a “must”, to put it beyond doubt that, as this is a government policy which local authorities are being asked to implement, they must properly provide for the costs of implementing that policy.
This is the key. First, in order to access the information about incomes, the net has to be cast wide—effectively ask all tenants to secure information about less than 10% of the tenants. That is the first point. Secondly, if this is operated in a fair way there will be complexity. There is no doubt about that. The noble Baroness, Lady Hollis, very precisely pointed to one of the issues of fairness: if people’s income changes, in the interest of administrative simplicity you might say, “We won’t change the rent”, but that would be extraordinarily unfair if people have lost jobs or changed roles and their income has changed significantly.
As we know, in the labour market that we work in, people can see their incomes as householders change very rapidly indeed—from one week to the next, as I said earlier. Therefore, you have complexity. You have complexity about the different benefits within the system, about the makeup of families, and about how you assess who the higher earners are within those families. With that complexity comes cost. It is an absolutely logical consequence of seeking to introduce a fair system.
Does the noble Lord agree that with complexity also comes error? Some of us who, when at the other end of the building, spent a lot of time helping constituents deal with housing benefit queries and difficulties are well aware of the delays and problems in that system and foresee something at least comparable when this system is brought into play.
The noble Lord makes a very powerful point. With any new system—or indeed with very mature systems, such as housing benefit—there are huge risks of error and cost in correcting it. I have run a housing benefit system and know just how easy it is to run into difficulties with it. I also know how costly it is to run because of the complexity of individual circumstances. We are here creating a whole new parallel system of assessment that sits alongside those for universal credit, housing benefit and so on. It will be new, and we will not establish a lot of the detail until we have run it. That, by the way, is why I still feel strongly that a pilot to test the operation of the system would be very valuable, not least because it would tell us how much cost is involved and what are the potential error rates.
It is essential, first, that we recognise that this may not be worth doing nationally, and certainly not locally. Secondly, we must give comfort in the Bill to local authorities that their costs will be covered. Thirdly, we must recognise that if this is to be a genuinely fair system, it will come with complexity and significant cost.
My Lords, I support Amendment 75A, to which my noble friend Lord Stoneham has added his name, and Amendment 81A, to which I have added my name. Earlier, we debated at great length the cost to local authorities of administering pay to stay. The system appears disproportionately bureaucratic and, as we are uncertain how implementation will work, it will be extremely costly to sort out.
Housing, revenue and benefits officers are already working to full capacity. I have yet to ask the officers on my council just how many more of them they think they will need to administer this system. As we have heard, the absence of any detail means that no one can be sure that the additional rental income will cover the cost of administration. Local authorities should not be out of pocket. There is very little detail on the scheme and no transparency, and it seems that the Government are just transferring costs to local authorities.
On market rents, we have heard that there will be a flat rate of income. When tenants reach that rate, they will be assessed to pay market rents on a sliding scale. However, we have not heard anything about whether the taper will stop at a lower or higher level of rent. Will the market rent be assessed local authority by local authority, or will it be a flat rate? The Secretary of State is yet to tell us. Will tenants paying additional rent on the taper in the north stop paying at a lower level than those in the south-east, where the taper may carry on for some time, because market rents are much higher?
It is not surprising that local authorities are gaining the impression that the Government do not value them or the contribution that they make to their areas. I am very disappointed that we have so little detail at this stage on this very important clause, and I support the amendments.
My noble friend has raised an extremely important point relating to market value assessment. I wonder whether the Minister would like to comment on the fact that the DWP has market rents determined for housing benefit purposes, which is a hotly contested topic in many areas. Perhaps she would let us know whether that is indeed the benchmark that is intended to be used.
My Lords, the noble Lord, Lord Best, referred to an authority—I did not know whether it was a mythical authority or a real one that he was not prepared to identify. I can tell him that in the county of Cumbria, there are a number of authorities that would fall within the basic case that he was making: certainly Carlisle District Council; Barrow-in-Furness; probably Copeland, which is in Whitehaven; and, apart from the lakeland part of the districts concerned, certainly Allerdale.
When I asked councillors in Cumbria the other day what the level of rent was in the private sector of houses that had been sold off, I was told that there was very little difference—a marginal difference—maybe a fiver or a tenner on a property. So what are the costs to be incurred? The Bristol brief, which I assume everyone has received, goes into a little more detail. It says that even though very little detail is given in the Housing and Planning Bill, as a minimum the scheme would have to include income verification, data matching, measures to discourage and combat fraud, dealing with inquiries, market rent setting, rent accounting, audit processes for the additional rent raised and processes for internal and external review. That does not include appeals and overpayment recovery. There is an additional factor: investigation. We know that the departments concerned with the benefits system have investigators, which cost money. I am presuming that local authorities, particularly where they have substantial housing stock, if they are to meet the Government’s targets on these matters, will have to employ people to carry out this work. These all add to the administrative costs of implementing the scheme in areas where the differences between the private sector rent of a former local authority property and the local authority rent are only marginal.
That leads me to the view that the Minister should very seriously consider Amendment 75A, because it at least allows local authorities to have in mind what those costs would be and whether they should not proceed to pursue people in the circumstances that will arise.
My Lords, this group of amendments, as we have heard, concerns the payment of rental income to the Secretary of State and seeks to deal with issues for both tenants and local authorities that the blanket application of the policy may create. Amendment 75A, which was moved by the noble Lord, Lord Best, and supported by me and the noble Lords, Lord Kerslake and Lord Stoneham of Droxford, seeks to give the Secretary of State the power to disapply the policy if it becomes clear that the costs of assessing the incomes of local authority tenants would be disproportionate to the additional rental income achievable from this provision. From what we have heard already, in many low-wage areas this assessment would be a complete waste of time and money, and achieve next to nothing. This would give the Secretary of State an easy and convenient way out of the mess that has been created.
Amendment 81A in the name of the noble Lord, Lord Kerslake, the noble Baroness, Lady Bakewell of Hardington Mandeville, and my noble friend Lord Beecham, seeks to ensure that the full administrative cost of undertaking this exercise for the Government will be taken into account and deducted from any payment made to the Government. Again, I cannot see how the Government can really resist this; otherwise they are expecting local authorities to do all the work for them, pay them the money and bear all the costs. That does not strike me as very fair at all.
In Clause 84(3), the Government have given themselves in effect a get-out-of-jail-free card by saying that the regulations may provide for deductions to be made to reflect the administrative costs of local authorities. That is just not fair. Amendment 81B proposed by the noble Lord, Lord Kerslake, and myself, would change “may” to “must”. This an important change which needs to be made.
When I was looking at the Bill, I spotted Clause 84(5), and we tabled Amendment 82. Clause 84(5) says:
“The regulations may provide for assumptions to be made in making a calculation, whether or not those assumptions are, or are likely to be, borne out by events”.
That is utterly ridiculous—a kind of “think of a number and double it” clause. It is absolutely ridiculous that that is in a Bill before your Lordships’ House. If it was not so serious, it would make you laugh. When you think back to Clause 73, no wonder the Government are seeking to keep the money collected, even though they may have taken too much, because they may have made totally ridiculous assumptions in arriving at the figure in the first place and may have collected too little. They are seeking protection through this clause, and it has to go.
I shall draw my remarks to a close but, as this is Committee, I may intervene further during the response from the noble Baroness, Lady Evans of Bowes Park.
My Lords, this this group of amendments primarily concerns the treatment of administrative costs for local authorities. We have already given a firm commitment to allowing local authorities to recover a reasonable amount of the costs of operating the policy, and hope that commitment is welcome.
I begin with Amendment 75A, on the assessment of household income and the costs involved, which seeks an exemption for local authorities when the cost of doing the assessment is more than the rental income likely to be received. Under the policy, tenants are likely to be asked to declare their household incomes. We do not want this to be a time-consuming process. The department is working with local authorities on the options for how income is defined, building on the experience of other departments in bringing forward income-based assessments, such as tax credits, universal credit and housing benefit. Our consultation response confirms that tenants on housing benefit would be excluded from the policy, which will significantly reduce the caseload of local authorities. We are working through the options in relation to universal credit, and engagement with local authorities is important here. We will think through carefully the issues that noble Lords raised about areas in which the additional income would be less than operating the cost of the policy, because we agree that that is an important consideration, although details could be set out in regulations if necessary.
Amendment 81A asks for administrative costs to be met. We have given a reassurance on this, subject to an assessment of the actual costs of operating the policy, and will provide an update following the conclusion of engagement work with local authorities. Officials have a regular working group with local authority offices to test the implementation plans and costings; as noble Lords have said, there will be different issues in different parts of the country. That will directly inform the secondary legislation. We are absolutely committed to having front-line experience inform policy, for the very reasons that noble Lords have raised.
To conclude this group, Amendment 82 deals with the approach to returning money to government. The options, as we have outlined, are to do so based either on actuals or on a formula. We need the flexibility to put in place the most appropriate approach, and are dealing with local authorities in this matter; that will be part of the discussions with the implementation group. I hope that the commitment to provide local authorities with a reasonable amount of admin costs and the engagement that we are having with local authorities to make sure that they are involved in forming policy will encourage the noble Lord to withdraw his amendment. But of course we welcome further discussion on any of these points and are happy to meet noble Lords who would like further information or discussion on these matters.
Why on earth should we be pleased that the Government will allow local authorities a reasonable proportion of their costs to be reimbursed? The whole of any profit will go to central government. Yet apparently the costs of raising that money may be divvied up in whatever proportion the Secretary of State judges reasonable. That is unacceptable. If we are supposed to be raising money for the Chancellor of the Exchequer, he should pay the full costs of so doing.
I am grateful for the Minister’s assurance on covering the costs. I would have thought, therefore, that putting “must” in rather than “may” would not of itself cause any particular issues, given that that is the Government’s intent here. What would be helpful is if we could, when the Government firms up the taper, have a clear analysis of the potential income that is likely to be raised and the likely costs of collecting that income.
As my noble friend Lady Hollis has said, can the Minister when she responds say why it is reasonable costs and not all the costs that have been incurred? It is totally unfair if local authorities have to bear some of the costs and all the profit—as my noble friend said—goes to the Government.
Can the Minister also comment on Clause 84(5)? It is an absolutely ridiculous clause the way it is written. It needs to be improved, rewritten or taken out.
I thank noble Lords for their questions. As I have said, the Government are committed to helping cover reasonable costs. We will work with local authorities to make sure that their thoughts are fed into this process; that is the position we are taking.
Yes, I know that is the position, but can the Minister tell us why it is not full costs? That is the question we are asking.
There are many things to be taken into consideration and, as I have said, we will discuss with local authorities how best to implement this.
I thank the noble Baroness for what she said about taking serious note of the possibility that in some areas there is not a viable level of market rent to support action, and I urge her to take that back to the department and think it through carefully. Clearly quite an important consideration is the calculation of the market rent in a particular area. As I mentioned in my attempted intervention a few minutes ago, at the moment there is a Department for Work and Pensions assessment of market rent for the purposes of the payment of housing benefit, which I believe is something like the lowest quartile of the property available in the local reference area. Certainly, that causes real difficulties in some areas such as my own in Greater Manchester that have higher local market rents. That illustrates a problem I think the department will have in assessing this. If the ceiling were taken at the DWP level it would mean that plenty of areas would not be as viable as they might be if a higher level were taken. Correspondingly, if a higher level is taken you will have the paradox of those on housing benefit being limited to one market value in the area and those who are paying higher rents as a result of this being judged by a different market level in the same area. I just want to alert the Minister to some of the problems that could lie ahead, certainly in my own borough of Stockport and, no doubt, in many other places as well.
I want to follow up my noble friend’s well-spotted point that I had not picked up on. Clause 84(5) says:
“The regulations may provide for assumptions to be made in making a calculation, whether or not those assumptions are, or are likely to be, borne out by events”.
Likely to be borne out by events? Can I just ask the Minister a very simple question which I think might allay our fears? If the Government have got it wrong, do they reimburse local authorities?
We fully intend to reimburse local authorities for reasonable costs and need to establish which costs are relevant. We would not expect the Government to write a blank cheque. We expect that some local authorities may be more efficient than others. To reiterate, we will reimburse all reasonable costs.
My Lords, I thank all noble Lords who have joined in the debate. I thank the noble Lord, Lord Kerslake, who reminded us of his earlier amendment asking for a pilot scheme. If ever I saw a case for a pilot, this is it. Surely we need to test this out on the ground in a few places to see what the costs and the realities are.
I am grateful to the noble Baroness, Lady Bakewell, and to the noble Lord, Lord Campbell-Savours, who listed all the things that have to go into the administration of the scheme—processes for verification, data matching, combating fraud, market-rent setting and the rest.
I am grateful for the support of the noble Lord, Lord Kennedy of Southwark, and I am also grateful to the noble Lord, Lord Stunell, who made the point that an artist rather than a scientist may be behind the definition of “market” in the context of market rent. However, the Minister has given us some reassurances and I want to pin a good deal of hope on them.
The recovery of reasonable costs leaves the matter open. I was a bit alarmed by the impact statement coming up with a figure which I calculated to be about £15 per case, which is about half what is currently spent on housing benefit cases. I think that we will see a higher figure for these cases than for housing benefit cases. The figure of £15 given in the impact statement looked rather low, but no doubt that is all to play for and it is the Government’s intention that costs will be fully reimbursed. Possibly more important is the recognition by government that there will probably be some cases where it is not worth going out and collecting the money because the administration costs will exceed, match or be very close to the amount that will be raised. I am sure that the Local Government Association will have a good deal to say about this and that there will be some tough negotiations there, but I think that we are left with some hope that, where the administration costs are disproportionately high, the Government will not proceed with the scheme. I beg leave to withdraw the amendment.
Amendment 75A withdrawn.
Amendments 75B to 76A not moved.
Clause 78 agreed.
Clause 79: Meaning of "high income" etc
Amendments 77 to 79A not moved.
Clause 79 agreed.
Clause 80: Information about income
Amendments 79B to 79D not moved.
Clause 80 agreed.
Clause 81: HMRC information
Moved by Lord Beecham
80: Clause 81, page 35, line 27, leave out paragraph (c)
My Lords, this group deals with the supply of information by HMRC in respect of the income of tenant households, as enshrined in Clause 81. The clause states that HMRC may disclose such information for the purpose of enabling a housing authority to determine whether it is obliged to charge a tenant a specific rent level and for determining what that level should be.
Subsection (2) provides, reasonably enough, that the information may be disclosed only to a local housing authority, the Secretary of State or a body with which the Secretary of State makes arrangements for the information to be passed between HMRC and local housing authorities, but it also, somewhat mysteriously, provides that it may be disclosed to,
“a public body that has been given the function of passing information between HMRC and local housing authorities”.
It is one thing for HMRC to supply details to a local housing authority but quite another for it to do so to some as yet undefined organisation—in the words of the Explanatory Notes,
“a single body nominated by the Secretary of State to act as the ‘gatekeeper’ for this purpose”,
albeit that HMRC has agreed to this procedure. Perhaps the Minister will indicate whether there was a proper consultation with HMRC or whether it was simply asked to frank the proposal.
What exactly do the Government have in mind? Why is an intermediate body required? What form is it likely to take? What will it cost? Who will foot the bill? What costs are likely to fall anyway on HMRC in supplying information and on councils dealing with it? Should personal information of this kind be made available to anyone other than the housing authority?
Moreover, is there not a major problem with this concept in that many people’s income varies widely during the year? Can HMRC keep up with the fluctuating incomes of zero-hour contract workers, the self-employed, the part-time employed and people working variable hours, some weeks with overtime, some not? How easy would it be to take into account unearned income? Will non-taxable income—for example, from ISAs—be taken into account? What happens during periods of illness or unemployment?
At the other end of the scale, what if the tenant has substantial capital yielding, at present interest rates, only modest income? What happens when all these questions arise not just with tenants but when other members of the household have earnings?
The organisation Social Housing Under Threat points out that the Commissioners for Revenue and Customs Act 2005 contains a presumption against disclosure of information which is, by that statute, limited to organisations which are public bodies. In this case, it points out that bodies which are not public and the Secretary of State will have the power to permit disclosure to a private company to handle the transfer of this sensitive information. It assumes—perhaps the Minister will comment—that disclosure would involve a much larger subset of tenants than will actually be liable for higher rents to ensure that no one is failing to disclose their higher income. After all, it is not obvious that without a provision to test more widely everybody who might be eligible to pay more would be detected. The organisation finally observes that disclosure to housing associations will flow from decisions as to whether or not they will charge higher rents for their tenants—going well beyond, therefore, any concept of public interest and accountability.
Why was this matter included in the consultation of October last year? What discussions have taken place with the Information Commissioner about the proposals? Will HMRC, with all its present problems and evident failings, be up to the job of providing timely and accurate information—and, again, at what cost? These questions all need answering.
Amendment 80 simply removes the ability for HMRC information to be channelled through some government-appointed gatekeeper, no doubt selected from the usual suspects of Capita, G4S, Serco and the like. We need more information before we can safely approve the proposals as they stand. I beg to move.
My Lords, I am very worried about this amendment and wish to speak briefly to it. I foresee some junior employee in one of these private companies sitting there with, on his or her desk, the most personal information about individual council tenants and their incomes. I find that utterly deplorable. I am astonished that Conservative Members of this House and the other place did not object to this. Historically, certainly when I was in the Commons, whenever there was an argument about the revealing by the Inland Revenue, as it was at the time, of information outside the government department, there was always a storm of protest. But people seem to presume that this is acceptable on this occasion. I wait to hear the Conservative Members of this House and government supporters challenge all the implications that lie behind this clause.
This is wrong. I would also like to know the detail. Will there be a regulation—I am sorry to have to ask for a regulation now—which defines precisely the nature of the details to be provided by HMRC? Where subsection (2)(d) refers to,
“a body with which the Secretary of State has made arrangements for the passing of information between HMRC and local housing authorities”,
are those bodies to be defined somewhere? We presume that they will be private companies, but are there other organisations which have not been mentioned which we might wish to consider when we come to Report?
My Lords, my name is attached to Amendment 80A, but I fully subscribe to the points that have been made so far about Amendment 80. A range of issues is involved and the Government would do well to think very carefully about that. I will come back to that in a moment.
On the assumption that HMRC has a role, Amendment 80A simply says that,
“an arms-length management organisation, tenant management organisation or local housing company wholly owned by its local authority which is managing social housing” should also be counted in terms of being bodies which can receive information from HMRC. It is not clear in the Bill so far that that is the case. I suspect that is an oversight, but I look forward to the Minister’s confirmation that that indeed is the case.
There is, however, a broader issue about the role of HMRC. There is the role of third parties getting access to private information and the control of that.
That has been very well put by noble Lords in this grouping so far. However, there is another one which I think has to be looked at very carefully. That is how the information flows from HMRC in the first place, the reason being that with tax returns, for example, it may be straightforward for many individuals but for some, perhaps self-employed people, it may not be, and people have to file tax returns months after the tax year, so there could be significant levels of fluctuation in people’s income.
We have heard all the arguments around this, of peaks and troughs during the year and so on. A lot of thought needs to be given to this issue about the security of data and the bureaucracy that is being created. We heard in the last group about reimbursement of costs to local authorities for the work they have to undertake. Of course, there are ways of getting round this—a number have been suggested. I hope the Minister will take very seriously the fact that we do not want to create an enormous bureaucratic structure to deal with this when there are simpler methods to achieve the objective.
My Lords, I am sure that all noble Lords will be pleased that this is a smaller group than those we debated earlier. It concerns the role of HMRC in relation to data sharing on income.
The noble Lord, Lord Beecham, asked if we had consulted with HMRC and the Information Commission. I can confirm that we have.
I will start by outlining the purpose of clause 81. The power has been taken to enable data sharing between Her Majesty’s Revenue and Customs and local authorities if it is necessary to verify the income details provided by tenants. This could be achieved directly between HMRC and local authorities, or the Government could choose to set up a body to make the transfer of data simpler. Noble Lords have raised concerns about private companies using income from tenants for purposes other than verification. I can reassure noble Lords that there is no intention to share the details of tenants directly between Government and private companies.
I hope I will give further comfort to the noble Lord.
The HMRC data-sharing powers allow a sharing of income information for the landlord’s purposes under this policy only. If the landlord shares the information with anyone else, powers in the Bill could see criminal proceedings brought against them.
It may be that noble Lords have in mind that local authorities already contract their services out to private companies to collect personal information on income, and that they may do the same for the operation of this policy. Those authorities which contracted out services would have very clear rules in place about that function. The powers in the Bill do not cover that function. I therefore assure noble Lords that we take data security very seriously.
Amendment 80 would remove the subsection which allows HMRC to disclose information to a public body which has been given an intermediary function between HMRC and local housing authorities. I thank the noble Lords, Lord Kennedy and Lord Beecham, for this amendment, as it gives me an opportunity to provide greater clarity over the subsection’s purpose. The intention is to enable data sharing by HMRC and local authorities for the purpose of income verification in the most appropriate way. The clause enables the function to be passed to a public body to act as a gatekeeper of information.
We are developing our thinking around how this function would operate in practice if it is needed. We want to retain flexibility in the Bill so that we can put processes in place to help local housing authorities implement the policy in a streamlined and efficient way. This may involve the creation of a public body to carry out that function on behalf of others.
The aim of this provision is to make the process as simple as possible to implement if HMRC needs to share information. I hope that noble Lords will understand that, should it be necessary to do it via a public body, that option should be available.
How does the possibility of a private organisation being involved fit with the requirements of the 2005 Act? Is a private organisation somehow to be made into a public body to carry out the function? I do not see how that works.
It could, but it could not share it. Anyone who holds data on another person is obviously restricted by certain rules. In this case, I have made it very clear that it is a criminal offence for that body to share data about the tenant to anyone other than, let us say, HMRC.
They might know the address of the property. I do not know whether data protection rules would allow all the detail on that person to be shared or only the relevant detail relating to their income.
My Lords, Serco, Capita or Liberata, the companies that I was citing earlier, are currently administering housing benefit. That is because, to some extent, the tenants seek housing benefit. But the Minister seems to be saying that, when it comes to pay to stay, they cannot have that information and that only local authorities can. Yet, as we know, particularly where household income is dependent on the second earner, tenants will move from a position of claiming HB, which protects them from pay to stay, to not needing HB, whereupon they may be exposed to it.
Secondly, it will produce huge problems in the role of universal credit. Some people on UC will be claiming HB, and that information from the local authority side may be run by Serco. Other people will be claiming UC but not claiming HB, but that information will have to come presumably only from the local authority back to DWP. I really cannot see how that can work.
The noble Baroness will accept that if someone is in receipt of housing benefit, this will not apply to them anyway, so I am not quite sure what she is driving at.
My Lords, tenants on housing benefit may have that benefit administered by Capita, Serco or Liberata. When those tenants seek housing benefit, they know that their finances will be scrutinised. I have never known it to happen that HMRC information is needed to do that. But when instead you are dealing with pay to stay, you have got to go to HMRC to get reliable information. What that means is that people who move between HB and pay to stay or those who are claiming UC with HB at some points and at other points not will be moving between both the private companies collecting information and local authorities which, as the Minister has said, will exclusively hold HMRC data. It cannot work.
My Lords, I am not sure that I entirely follow the noble Baroness, but that may be my deficiency rather than hers. Local authorities hold vast swathes of data about various things. I know also that the holding of data is tightly controlled, particularly in terms of sharing. I would say therefore to noble Lords that to share data more broadly than is allowed is already a criminal offence.
My Lords, I do not know how their information could possibly be scrutinised by a private employer because it is shared between HMRC and the public body.
Perhaps I may interrupt the Minister in order to ask the Bill team or someone to check on the applicability or otherwise of the Commissioners for Revenue and Customs Act 2005 in relation to this matter because I do not think that any of us are really in a position to confirm what the position is. I think that this needs proper legal advice.
I most certainly will do that, and I now know what the 2005 Act is; I defer to the noble Lord’s knowledge in that.
Amendment 80A seeks to put into the Bill a reference to arm’s-length management organisations; that is, tenant management organisations and local housing companies, in relation to the bodies that HMRC information can be passed to. I understand the intention behind the amendment, but I believe it to be unnecessary. Local housing authorities which have outsourced part or all of their housing management functions to another body such as an ALMO will have done so under powers in the Housing Act 1985. The Act provides that any function performed under such an agreement shall be treated as if it were done by the local housing authority. Therefore, when that housing management function includes functions related to implementing the policy for high-income social tenants, such as determining and setting rents, an ALMO or other body would be treated as if it were the local housing authority. In short, the reference to “a local housing authority” in Clause 81 already includes a body carrying out that housing management function on behalf of the council.
Once again, I hope that my reassurances—although I am not sure they have—have been enough to persuade the noble Lord to withdraw his amendment.
My Lords, I beg leave to withdraw the amendment.
Amendment 80 withdrawn.
Amendment 80A not moved.
Clause 81 agreed.
Clause 82: Reverting to original rent levels
Amendments 80B and 80C not moved.
Clause 82 agreed.
Clause 83: Power to change rents and procedure for changing rents
Amendment 80D not moved.
Clause 83 agreed.
Clause 84: Payment by local authority of increased income to Secretary of State
Amendments 81 to 82 not moved.
Clause 84 agreed.
Clauses 85 and 86 agreed.
Clause 87: Private providers: policies for high income social tenants
Amendment 82A not moved.
Clause 87 agreed.
Clauses 88 and 89 agreed.
Moved by Lord Bassam of Brighton
82AA: After Clause 89, insert the following new Clause—
(1) Upon the coming into force of this Act, the Secretary of State must undertake a review into the effect that Chapters 3 and 6 of Part 4 will have on community cohesion within all local authority areas.
(2) A report on the review must be published, and laid before each House of Parliament, no later than six months after the coming into force of this Act.”
My Lords, these amendments would require the Secretary of State to give consideration to the issue of community cohesion—something that has come up several times in the debate on pay to stay this evening—and to consider family life when considering the measures in this Bill on rents for so-called high-income tenants and the ending of secure tenancies. They would require consideration to be given at the end of a fixed-term secure tenancy to the effect of not granting another tenancy, and the effect that that would have on family life—for example, whether a child is forced to move school and whether the family has to move away from local amenities they rely on or a family support network. They also require the Government to undertake a review into the effect that the pay to stay and ending of secure tenancies provisions in the Bill will have on community cohesion.
A council home does not simply provide a roof over one’s head. It enables a sense of belonging to a community, particularly a community that is inclusive of people from different and diverse backgrounds. My argument is that the measures in this Bill put this severely at risk. There is a risk of bringing this cohesion to an end. Shelter estimates that 113,000 affordable council homes will be lost as a result of this Bill. The Local Government Association analysis suggests that some 80,000 council homes will be lost by 2020. That in itself could drastically change the make-up of many of our communities. Add to that the number of people who will have to leave their homes as a result of the pay to stay provisions, and we are looking at the serious dismantling of communities across our country.
I think it was the Minister who said earlier that some 46,000 households in London would be affected by pay to stay. My guess is that we need to double that to get an estimate of the impact across the country. Put these figures together and the multiple impact of pay to stay and the ending of secure tenancies, and we will see big changes to the make-up of many of the communities that currently benefit from social housing. It will be particularly apparent in areas—many in London—that have extremely high market rents. In these areas council housing is even more vital to maintaining a mixed and cohesive community, providing housing in the area for people who would otherwise be forced out.
I argue that a community can thrive only if there is housing in the area for those who need to work there—the people who work in local shops, post offices and schools. If people have to live miles away to commute in to provide services for those who can afford to live in the area, we lose all sense of balance in the community and it is hollowed out. It is unsustainable. We can see it happening now in many London boroughs as private rents soar and people cannot afford to stay and live there. Council housing is supposed to even out this imbalance and to help those who cannot afford market rent, but also to allow people to live in mixed communities.
Under the Bill, households that reach the Government’s threshold of just £40,000 in London and £30,000 outside London will be forced to pay market rents or to leave. Market rents in boroughs such as Camden are completely out of reach for most working households, so what will happen to those now classed as “high income”? We will see people having to leave the areas that they have lived in for years and places in which they have built their lives and their children’s lives. The cost will be not just social break-up of communities, but a financial cost to the state, because when people are forced to move away from the social support networks that they have built up—away from families and friends, those who look after children or share caring—it becomes a cost. They will have to rely more heavily on local authority services.
To bring it down to individual households, just think of the potential damage that these provisions can do: parents unable to plan for their children’s schooling; friendships broken off every few years; few friendship groups and poorer community support networks, which currently thrive. I wonder whether the Government have given any thought at all to the impact on schools. What if a council decides on setting secure tenancies at three years at a time? Parents with children face the prospect of moving three, perhaps four times during the schooling of a child. It does not take much imagination to see how disruptive that can be for a family. Think, too, how disruptive it will be for the school, with a constantly revolving door of pupils and families, never knowing who or how many will be on the school roll from one year to the next. I ask this simple question: has the DCLG thought to talk to the Department for Education? If it has, what has the department said in response? Was this consideration ever factored into an impact assessment?
The Bill is a series of unintended consequences piled up as a cover for action designed to solve problems caused simply by lack of low-cost housing. The very least we can do is invite the Secretary of State to think about this measure and its impact on community cohesion, in particular on schools and families. The Bill, with its emphasis on reinforcing social housing as a tenure of last resort, runs the risk of taking us back to a world of rigid divisions in society. Worse than that, it would entrench them. Surely we should be encouraging mixed communities, full of people with different talents. Pay to stay, mixed in with short-term tenancies, will lead to social housing for just the very poorest. It will further stigmatise a form of tenure and, combined with short-term tenancies, create perpetually insecure families facing a series of costly moves.
I do not think the Government have thought through the long-term impact of the legislation, nor the multiple impacts of different changes that the Bill will bring in. If we are serious about community cohesion—something that the Prime Minister in particular has laid great store by in the past, with his plans for the big society—the very least we can do is begin to understand the long-term impact and the consequences of divisive and socially damaging legislation of this sort. I beg to move.
My Lords, two amendments in the group are proposed by my noble friend Lord Bassam of Brighton. As we heard in his contribution, they concern community cohesion and the effects of the pay-to-stay policies on it. Amendment 82AA would require the Secretary of State to undertake a review into the effect that the ending of secure tenancies and the pay-to-stay policies will have on community cohesion. Amendment 82GAB would require the landlord, at the end of the fixed-term tenancy, to consider the effect that a decision not to grant another tenancy would have on family life and community cohesion.
These seem very sensible amendments and should be of no concern to the Government. In fact, they should be fully in tune with the Government’s thinking. We might all have our own definitions of community cohesion; for me, it is as set out by my noble friend Lord Bassam of Brighton. It is where there is a common vision and a sense of belonging—family life and a role for everybody in the local community. It is where we have rights and responsibilities, a breaking down of barriers, a building of trust and the creation of a community.
If a consequence of the Government’s policies is a breakdown of that cohesion, then the result would be something that nobody in this House would want. All that these amendments ask for is, first, a review by the Secretary of State that will help to develop policy and provide valuable information on the effect of what they are doing, and, secondly, a duty on the landlord. My noble friend Lord Bassam of Brighton is right when he says that mixed communities are best, with people doing a variety of jobs in their locality. It makes the place work better if they live locally, rather than being forced to move away, with the impact that that has on families and their development. I hope that, even at this late hour, we will get a positive response from the Minister. As it is Committee, of course, I might intervene further in the noble Baroness’s response.
My Lords, I also support my noble friend’s amendments. Like him and many others in this House, I have been a local authority leader. Many of us have been housing chairs, possibly on the way to becoming local authority leaders. Whenever we went round on what we used to call site visits, we could tell the stable community estates. They were the ones with no graffiti and no litter; in which people had carved out gardens around the base of flats or had put carpeting down on the public stairways. In those flats, there was no petty level of criminality; there were no rent arrears and no yobbing youths setting fire to mattresses in the garages. The community policed itself, and that was because there were people of a wide age range, a wide income span and a wide set of occupations and retirement. Those estates worked, and were the core—the heartbeat—of my city. As Nye Bevan said, they were part of the,
“living tapestry of a mixed community”.
That is what we all want.
I, and perhaps the Minister and other people in this House, have been around the inner-city estates in Detroit, the outskirts of Washington and so on. I saw areas there where, if you get a job, you leave your home; so nobody gets a job except recycling the drugs economy or working on the streets. In these estates, children are in families that are broken and damaged in all sorts of ways; young men go around in groups and gangs, intimidating those who wish to stay. There is a permanent, transient population of the down-and-out, the derelict, the destitute and those with mental health problems. I have been there and seen it: I did not work in it like Obama, but I have spent time there.
If first you have a bedroom tax that forces tenants with larger homes to move because they cannot pay the rent and have to downsize, and disabled people lose their community networks of support; and if secondly you have pay to stay, so that those who could be an aspiration and an inspiration for the young people in the community, who have the knowledge of where jobs may be, and who could help those young people into the labour market, will have moved on; and, if thirdly, on top of that, we are going to have five-year tenancies—and, as my noble friend said, parents who worry would start planning their move with their children in advance, to ensure that their child goes to school—in the process we will strip out the support networks for disabled, older and frail people, and the support networks where people understand the problems that a family with an autistic teenage daughter or son would have. Either they will be sent on their way or they will voluntarily have to move.
Is this what we want? Behind it, as far as I can tell, the thing that is motivating the Government seems to be that council housing is a scarce resource; it is heavily subsidised by the taxpayer and therefore, if at all possible, we should move people on and out, irrespective of the damage to the communities, to make way for those on the waiting list who might be in even greater need because we are not building enough social housing for those other people to enjoy.
This is the wrong solution to a description of the wrong problem. We need social housing and stable communities. When it suits the Prime Minister he talks about the value of civic society—I congratulate him when he does so—and of communities on our estates. He talks about the value of the knowledge economy of those in work helping people to come into the labour market. As we know, most jobs do not go through the jobcentre at all but through networks of local knowledge. Strip that out and I promise that you will send those estates spiralling down until in a decade or 20 years you will look at our equivalent of Detroit’s inner city. You will wonder how this happened and what we now do about it.
My noble friend in the first part of her contribution reminded me of the work done by Lewisham Council. In Crofton Park we have the Ewart Road Housing Co-op. That is just the sort of estate that my noble friend talked about at the start. It is a wonderful place that is well run by the tenants. There are people of different ages living there. People have lived there since they were first moved on, there are new people and there is a long waiting list. It is clean, well run and an absolute pleasure to walk round. It is wonderful—and just the sort of place put at risk by the policy we are debating today.
My Lords, unlike my noble friends Lady Hollis of Heigham and Lord Bassam of Brighton I have not been a housing chairman. The last time I was on a local authority was 40 years ago when I was a mere member of the housing committee. My experience of these matters is more limited than theirs but I want to fix on one word in all this: “review”. What does “review” actually mean here? What will be taken into account by these local authorities? Will they take into account the ability of a tenant to maintain a clean home, their ability to be a good neighbour, ethnic diversity, whether the property is overcrowded, whether there have been complaints by neighbours, or whether they are happy with the employment arrangements for the family involved?
We have some form in this matter. I remember when Lady Porter ran Westminster. She cleared people out of local authority property so that she could sell it off. If I remember rightly, I was one of those who went to the district auditor at the time. The reality is that, exactly as my noble friends said, this will lead to a transient population moving into inner city areas—I have no doubt that in the end they will be crisis areas. At the moment, these areas succeed only because they have a wide social mix. The Government are destroying the social mix that makes these areas work. No doubt the Government will be blamed for that at some stage in the future.
My noble friend reminds me of Lady Porter and her activities in Westminster some years ago. Am I correct that her policy was called Building Stable Communities?
My Lords, Lady Porter—sorry, Dame Shirley Porter—was a bit before my time but I certainly do not think that any of us would want to emulate some of the practices that went on then. No one could want cohesive communities more than I do. It is part of my government brief and the sort of thing I promote every single day, so I certainly agree with the sentiments behind the amendments of the noble Lord, Lord Bassam. I also apologise to him because I started speaking to his amendment in a previous group when he was out of the Chamber and had not even spoken to it.
The noble Lord seeks a published review into the effect that the policies on income and rent setting and restricting lifetime tenancies will have on community cohesion in local authority areas. In the case of income and rent setting, I have already expressed our intention to keep the policy under review and I have also explained my views regarding the detrimental effect that low rents for households on high incomes can have on a community.
The provisions that will restrict lifetime tenancies—to which we will turn in more detail soon—will restore a sense of fairness to social housing, ensuring that it is properly focused on those who really need it for as long as they need it and that those who need long-term support are provided with more appropriate tenancies as their needs change over time. I am convinced that this is a better way to create strong and cohesive communities than continuing to grant tenancies with lifetime security to households who may only have a short-term need. Without these changes, families would continue to be trapped in overcrowded council homes, and older tenants whose children have left home would continue to occupy homes which may no longer be appropriate for their needs, while hundreds of thousands more remain on waiting lists without any hope of ever getting a council house.
The noble Lord has also tabled Amendment 82GAB, which would require local authorities, when they carry out the end-of-tenancy review, to consider the effects that not granting a further social tenancy would have on family life and community cohesion, and whether it would result in a child having to change school. I will say more about the end-of-tenancy review when we discuss the provisions on secure tenancies, but we would definitely expect social landlords to provide longer tenancies to families with children of school age and we will provide guidance to make this absolutely clear.
Is it the Government’s intention that these blocks of five-year secure tenancies can just carry on being renewed?
My Lords, that is absolutely correct. If a child was at school, clearly the situation would not have changed.
What is the purpose of these five-year tenancies if it is the Government’s intention that local authorities continue to allow five-year blocks of tenancy to persist? What does it actually achieve? It is not getting to grips with the problem—which the Minister seems to think is there—of spreading this scarce resource. Rather than having these false dates when tenancies just get renewed, the real answer is surely to build more housing so that the people whom the Minister is concerned about can come off the waiting list into social housing.
My noble friend is right: the answer is both to build more housing and to check, at review intervals, whether the housing that is being provided for a family continues to meet their need or whether they need something else. That is the purpose of the review.
Will the Minister assure me, and the Committee, that no family with children at local schools will ever be asked to leave a council home under one of these secure tenancies?
The guidance will be absolutely clear on children of school age. We can think of every permutation and combination of family circumstances, but if there were six children, five of them had left and only one was still at home, there might be a conversation about the family downsizing within the local area—but the continuation of the child’s education would be paramount.
My Lords, that is a very good question. The timeline of the guidance will all be before us by the end of this week.
I am reassured by some of what the Minister has said, but to be able to test the Government on this, we need to see the guidance. This is a deeply worrying set of provisions for many tenants. The interaction between family life, secure tenancies and people’s aspirations when they live in a local community is very intense. This is creating a sense of insecurity on many of our council estates.
It is also a disincentive for people to invest in their homes, which they do now. They not only look after their homes but improve them. If you are not sure of being able to stay on as your child gets to the point of leaving school, or if you are a couple living in a house and your five years is coming up, is that not likely to result in a decline in the investments that people make in their homes which do huge credit to many tenants now?
My Lords, I have seen many different types of social housing, some of which is incredibly well looked after and some of which is not well looked after at all. Living somewhere for a long time does provide incentives but one of the biggest incentives—I know I will hear a “Boo!” go round the Committee—is when someone buys their home. I can tell when someone has bought their home because those houses are immaculate.
They may be immaculate for five years or seven years and then when you go round the estates you can see the houses that were bought by council tenants, which were then sold on into buy to let. So there are two stages, and I can assure the Minister that in many estates the buy-to-let running down of property infuriates not only council tenants who did not buy but council tenants who did and stayed.
My Lords, I just cannot agree with that point. I believe that people who have bought their own homes take great pride in them. But on that we shall agree to differ because it is 10.15 pm.
The point I was making is that I can tell a house that has been bought because generally these are in very good condition. I am not starting to make the argument about houses that are then sold on through subsequent sales, I was just making a comment to the noble Lord, Lord Bassam, about people taking pride in their homes. I am sorry to restrict the noble Baroness but I do not want to be diverted on to that point.
My Lords, we will be coming to that, if the noble Lord will bear with me. I have some news for the noble Lord, Lord Bassam: the guidance will be published in time for the commencement of the provisions.
I am sorry, my Lords, that is absolutely idiotic. The guidance will be published at the time at which the legislation is implemented—does the Minister really mean that? Surely we have to see that guidance before it is implemented.
My Lords, we will see the guidance before it is implemented but I am just saying that it will be published in time.
I am grateful that the noble Lord is grateful. I do not believe that providing social housing on a long-term basis to households that may experience only temporary need is a good use of scarce social housing, and I do not think it is likely to lead to strong and cohesive communities.
I am not going to give way. If the noble Baroness wants to come back later, she can, after I have finished.
The noble Baroness, Lady Hollis, talked about protecting the rights of those in most need. Local authorities will be able to provide an appropriate level of stability to those with longer-term needs, such as the disabled and older people, through the granting of further social tenancies, whether in the same or a different, more suitable, social home. I have outlined how the provisions in the Bill will restore a sense of fairness to social housing, ensuring that it is properly focused on those who really need it.
Amendment 82GAE, tabled by the noble Lords, Lord Kennedy and Lord Beecham, seeks a published review of the effect of the policies on income and rent-setting and restricting lifetime tenancies,
“on levels of homelessness and rough sleeping in each local authority area”.
I thank the noble Lords for their amendment and for raising the issue of homelessness. I agree it is important that the Government do all they can to reduce the number of homeless households. The Government have always been clear that we are committed to supporting the most vulnerable people in our society and one person without a home is one too many. That is why we have maintained and increased both central and local government funding over the next four years. However, while I sympathise with the intention behind the amendment, I believe it may be unnecessary because local housing authorities already record and review the incidences of and prevention of homelessness and rough sleeping, and must produce a homelessness strategy.
I think there is a typo. We are on the wrong clause.
Can I check if I am yet again speaking to amendments that we have not got to? Amendment 82GAE is in this group. Would noble Lords like to discuss it or withdraw it?
Will the Minister be really clear about guidelines? This is about regulations and guidelines. I am now looking at the policy fact sheet, which the department published. It makes it clear that there is going to be a single set of regulations for these measures, that is, the phasing out of lifetime tenancies. However, the regulations will be subject to the affirmative not the negative procedure. Could the Minister confirm that fact? It then says that the regulations will be developed in discussion with local authorities and the regulations and provisions in the Bill will come into force early next year. That, therefore, is early 2017. It is therefore easy to share the guidelines that will be written because there is from now approximately 10 months for those guidelines to be shared.
My Lords, to help noble Lords with this Amendment 82GAE, we are going to speak to it in its place, which obviously will not be tonight.
It clearly is a mistake and I really apologise if my noble friend has waited all this time.
I was trying to say to my noble friend that I had come into the Chamber. I do not particularly wish to intervene, but we have patiently gone through six days in Committee and we have had many opportunities to look at groupings. I think it is a courtesy to the House if noble Lords who have a problem with the groupings—which are published, they are out there, and we pick them all up—make clear before that they are not happy with the groupings. Otherwise, I think the House is entitled to expect things that are grouped together will be discussed together.
If it helps the Minister, I have a Whips sheet from Thursday and the grouping of that amendment is not on there. It is a typo. Thursday’s sheet has the two amendments down in the name of my noble friend Lord Bassam but this paper has been worked on and has appeared today. I do not produce the Government’s Whips sheet for debates but Thursday’s sheet, which we signed up to, has my noble friend’s two amendments and nothing else.
Would noble Lords like to hear it tonight or on Thursday? I am not going to waste any more time on this; I will finish my comments where I should have finished them and say to the noble Lord, Lord Shipley, that when I have guidelines guidance, I will be happy to share it with him.
What I am trying to get at is that if the regulations have to come to your Lordships’ House under the affirmative procedure, will she explain the guidelines at that point rather than keeping them separate from the regulations?
I think that I should probably be withdrawing my amendment. I can see that the noble Baroness is troubled and waiting for something to happen.
I have been very intrigued and quite interested by what the noble Baroness has had to say. I was a little bit reassured, but I sat there thinking about it a bit and I am not as reassured as I was. When I left home to go to university in 1972, I left my poor mother in her council home on her own with a spare bedroom. Had this ridiculous piece of legislation been in place at the time, no doubt she would have had a visit from her local council inviting her to move to yet smaller accommodation. That is not a particularly constructive way to approach things. Nor do I think that it would have been in her interest or that of the local community, because she was a bit of a terrier in her place.
This is a seriously deficient piece of legislation that does not achieve what we really need to do here, which is to create more social housing for people to access, rather than spreading what we have ever more thinly on a recycling basis, forcing people out of their homes and communities. That was really the point behind my amendment. I shall give it further thought before we get to Report, but the Secretary of State ought to think long and hard about the whole issue of community cohesion. It is good that the noble Baroness is the policyholder for that, because I can see that it is something that she cares passionately about. Perhaps she, too, along with the Secretary of State needs to reflect on the issue.
I should like to help my noble friend here, because I think he has misread my amendment. The review is one that the amendment calls for—from and by the Secretary of State, not the local authority. I beg leave to withdraw the amendment.
Amendment 82AA withdrawn.
Clause 90 agreed.
Amendment 82B not moved.
Schedule 4: Reducing social housing regulation
Moved by Viscount Younger of Leckie
82BZA: Schedule 4, page 115, leave out line 3 and insert—
“31A_ The Housing and Regeneration Act 2008 is amended as follows.
My Lords, at this somewhat late hour and after another long day in Committee, I am pleased that I can provide a further break for the Minister, although this is a technical amendment and somewhat brief, so there may not necessarily be time for ice-creams.
This is a consequential amendment relating to the abolition of the disposal proceeds fund, which is one of the deregulatory measures in the Bill. Certain properties developed with public funding are subject to the statutory right to acquire. This consequential amendment maintains that position by defining public funds without referencing the disposal proceeds fund. These amendments to Schedule 4 will ensure that that is the case. As I said, this is a technical amendment resulting from the concerns of the Office for National Statistics about public sector control over housing associations and the deregulatory measures being introduced to address those concerns. I beg to move.
Amendment 82BZA agreed.
Moved by Viscount Younger of Leckie
82BZB: Schedule 4, page 115, line 5, at end insert—
“32A(1) Section 181 (meaning of “publicly funded” for purposes of provisions about right to acquire) is amended as follows.
(2) After subsection (2) insert—
“(2A) Condition 2 is that—
(a) the dwelling was provided wholly or partly by a person using an amount for purposes for which the amount was required to be used by an HCA direction under section 32(4), and
(b) before giving the direction the HCA notified the person that any dwelling so provided would be regarded as publicly funded.”
(3) In subsection (3), for “2” substitute “3”.
(4) After subsection (3) insert—
“(3A) In relation to a private registered provider, the reference in subsection (3) to its disposal proceeds fund is to its disposal proceeds fund before the abolition of that fund by Part 3 of Schedule 4 to the Housing and Planning Act 2016.”
(5) In subsections (4) and (5), for “3” substitute “4”.
(6) In subsection (6), for “4” substitute “5”.”
Amendment 82BZB agreed.
Schedule 4, as amended, agreed.
Clauses 91 to 97 agreed.
Schedule 5 agreed.
Clauses 98 to 110 agreed.
Schedule 6 agreed.
Clauses 111 and 112 agreed.
Clause 113: Secure tenancies etc: phasing out of tenancies for life
Debate on whether Clause 113 should stand part of the Bill.
My Lords, I am opposing the proposition that Clause 113 should stand part of the Bill. Clause 113 introduces Schedule 7 and concerns the phasing out of secure tenancies. The effect of the clause and schedule would be to permit councils to grant tenancies only for a fixed term of between two and five years. Local authorities, of course, have the option to issue fixed-term tenancies already, but for some reason the Government are seeking to go further and want to prevent councils from issuing what they call tenancies for life. I just see them as secure tenancies, where, in order to remain in the property, the tenant has to comply with the requirements in the agreement: pay the rent, keep the property in good order, not be a nuisance neighbour et cetera.
Why do the Government want to dictate to local authorities what sort of tenancies they can issue? As has been said many times before, it does not seem to apply along with the policy of the big trumpeting of localism only a very short time ago in your Lordships’ House. Of course, that is a whole area of policy that the Government seem to have gone very quiet on in this Parliament.
When the noble Baroness, Lady Evans, responds to the debate, it would be helpful if she could outline how the proposals in this section of the Bill would help people on low or modest incomes—the sort of people who are likely not to be able to afford to buy their own home, not to be a beneficiary of the starter-homes plans, and not even to be able to take up the right to buy. All this does is provide greater insecurity for tenants in these circumstances. How does it help tenants, help their children, or enable people to prosper? How is it in any way beneficial to them? I am struggling to think of one reason. I will be grateful if the noble Baroness could help me out in that respect when she responds.
I have told your Lordships’ House many times before that when I was about eight years old we moved into a council property. I am the oldest of four children. I was lucky enough to get my own bedroom. Both my parents worked. My mum was serving school meals and my dad was running a post room. Both my parents worked hard and paid their bills, but we never had the insecurity or worry as a family that our tenancy might expire at some point in the future. How is this policy beneficial for families in social housing on modest incomes today? The amendments in this group seek to improve the proposals from the Government and provide tenants with different possibilities, all of which are better than what is offered by the Government.
Due to the late hour, I will leave it to other noble Lords to speak to their amendments in this group and comment at a later stage when appropriate. As this is Committee, I will of course intervene on the Minister if necessary. I beg to move.
My Lords, I speak in support of this group, and specifically speak to my own amendment 82BA. It is a great shame that we reached this very important issue at this stage of the evening—an issue that will have a profound impact on the future of social rented housing. Why do I say that? At the core of the offer to a new tenant is that this becomes their own home. They do not own the home but it becomes the place they regard as home. The reason they feel that way is that they have a secure tenancy for an indeterminate period. Moving to this model of tenancies will change that experience. It will make it feel not like their own home but—however we wish to dress it up; however much we issue guidance on renewal after two or five years—a temporary home. That is the reality of this. We will overnight have changed the nature of the social contract, if you like, with social tenants.
This is not a small issue. It is a very profound issue, and it has to be seen alongside the other changes that we are making to social rented housing, as I have said in previous debates. Because of the forced sale of high-value assets, the opportunity to move to a bigger home is constrained. Pay to stay will mean, as we have just debated, significantly higher rents for tenants on relatively modest incomes, in reality. We will move to the end of the affordable rented programme by 2018. Then we add this final amendment, which essentially removes mandatorily the right to secure tenancies. How do the Government think that council tenants will see this combination of changes? Will they regard it as a commitment to their future or will they regard it as seeing the end to the form of council tenancy that the noble Lord, Lord Bassam, spoke about earlier? This is a very profound change going on around us.
We have a provision now for the issuing of flexible tenancies. It exists and has existed for a number of years now—three or four years. What is again a dangerous precedent is that, having had a voluntary policy for a relatively short period of time, the Government conclude that the voluntary policy has not been sufficiently actively exercised, so we make it mandatory. Is that now the way we do things? It is voluntary if you do it the way we want you to do it—otherwise we make it mandatory.
Voluntary is the right way to see this issue of tenancy, because I can see that there are circumstances in which individual local authorities will want some flexibility around tenure. There is a perfectly good case for that. I cannot see why we should have a single mandatory policy imposed on every local authority, which then requires a set of regulations and guidance to tell it how to do it. Where in any possible sense does this sit with localism?
Why should there be a variation here? In some low-demand estates, which we have heard about—and there are still some—it makes absolute sense to give people secure tenancies. In other situations there may be a need for choice, because of the nature of the demand and of what is happening. What is absolutely certain is that, whatever guidance and policy the Government produce, it will not be adequate for the different situations up and down the country. We will be creating another layer of bureaucracy and central government control. It is a very retrograde step and something that was not part of the manifesto, to go back to some of our previous debates. Indeed, it came in at a very late stage in the process.
I absolutely get the point about efficient use of stock, but that has to be done in consultation with persuasion of the individual tenants. The Minister spoke about older people, but do we seriously think that an older person who has been in their property on a renewable tenancy for 30 years—that might be the case, in 30 years’ time—is then going to be told, “You’ve finished your five years, off you go”? Do we think that is the position we are going to reach in relation to tenancies? Of course not. It has to be through persuasion and through making an offer to that older person that meets their needs.
The case for removing this provision is strong. As I say, there is already legislation that gives the flexibility to local authorities. But, if the issue is that local authorities are not actively using their potential discretion, I have put an alternative amendment in front of the Committee this evening that would encourage them to do so. It would remain discretionary but they would actively need to exercise that discretion. This should not be needed—I shall be clear about that—but if it is an alternative to a mandatory model, which I think is wrong in how it would operate and completely contrary to the direction of localism, I would hope that the Government would seriously consider it.
My Lords, quarter to 11 is not the right time to have this serious debate about the role of social housing. This set of amendments and the previous debate go to the heart of what social housing is for. Is it, as we heard in the previous debate, to provide stable and balanced communities or is it to provide housing for those in greatest need for—to use the words of my noble friend—as long as they need it? Over the last 30 or 40 years the role of social housing in this country has gradually changed from the first towards the second. It is now much more focused on those in greatest need than it was 30 or 40 years ago, when young couples would put their names on the waiting list and gradually get to the top and no one at that point would ever have asked whether it was right to question their entitlement to a lifetime tenancy.
Now, one really has to balance the legitimate expectations of council tenants for a lifetime tenancy with the needs of those on the waiting list—the two are directly related. I think the time has come to question the lifetime entitlement to a secure tenancy because people are in need of social housing. If one takes the view that the role of social housing has changed it makes sense to have fixed tenancies and a conversation when that tenancy comes to an end to see whether there are other options for that tenant. At that point it will be entirely up to the local authority whether it renews the tenancy or has guidance from the Government.
Does the noble Lord not agree that if this is the change that is happening—I say we should be aiming for both secure communities and flexibility—why not leave that to the discretion of the local authority? Why impose it from central government?
As we have heard, the local authority can renew the tenancy at the end of five years if it wants but there will be a conversation and options will be explained to the tenant, such as low-cost home ownership opportunities. I do not accept that the modest increase in mobility that may come from these measures will dramatically change the nature of local authority estates, as we heard from the noble Lord, Lord Bassam. A few people may take up the options when their tenancy is reviewed and move on but, as we heard, many of these estates are very popular, with long waiting lists, and the implication that those who move in will dramatically alter the nature of the estate does not bear examination. We are looking for a balance between the legitimate expectations of those with tenancies to have those tenancies for life with the legitimate aspirations of those on the waiting list living in desperate circumstances to have an opportunity to move on. The local authority will have discretion at the end of the fixed-term tenancy to renew if it wants to but there will have been a break point, an opportunity for conversation, and I think this accurately reflects the changing role of social housing today.
My Lords, the noble Lord has described very well the competing pressures on social housing and I do not disagree with his analysis, but does he not accept that the reason he and the Minister are so concerned to ensure that social housing is available for the neediest on the waiting list is a function of the shortage that they have constructed? But for that shortage, whether it is council house sales or the proposed sales that will fund our housing association discounts or whatever, the problem will get worse because nearly half the housing that was in the social rented sector has left it. The noble Lord, Lord Young, accurately describes what is happening but, none the less, the problem lies not in tilting the balance from one to the other but in remedying the underlying problem of the shortage of social housing.
As we have heard in earlier debates, every house that is being sold by a local housing association is being replaced and every house that is being sold by a local authority is going to be replaced so I simply reject the thesis the noble Baroness has put forward.
My Lords, I have an amendment in this group. It follows immediately after the amendment from the noble Lord, Lord Kerslake. I am grateful to the intervention from the noble Lord, Lord Young, because it has widened and opened up a fundamental debate. The noble Lord described social housing now as “residualised housing” because that is what it is. We are getting to the last knockings of social housing. I do not think that that is right or appropriate. The problem that we have is spiralling rents in the public sector, spiralling rents in the private sector and a diminution of supply. The noble Lord says that there will be like-for-like replacement. So far during the Conservatives’ time in government since 2010, we have not had anywhere near like-for-like replacement. I think that the figure is one in 10. That is a great shame, although the aspiration is absolutely right.
When I chaired a housing committee, with the capital receipts that we accrued we had the opportunity to get some of the way towards like-for-like replacement. Now, we are nowhere near it and that is part of the problem. We need to expand public sector housing provision on a massive scale. That will help to drive down rents in both the public and the private sectors, and we can get back to the point where social housing is no longer viewed as residual housing for the poorest in our communities and for those who are struggling to get on to the housing ladder.
My amendment goes with the idea of 12-year secure tenancies and the reason for that is simple. In reply to one of my Written Questions earlier in the year, the noble Baroness, Lady Williams, said that that was the average amount of time that you could expect a council tenant to occupy a tenancy. That is the clue here. People still view this housing as long term and secure, and 12 years is a fairly lengthy period. It is a period in which you might begin a family and put down roots in your local community. That is why I pitched it at 12 years, although any other number could be picked.
We have to rethink where we are going with our policy. The noble Lord, Lord Young, accurately described where we are but I think that we are heading in the wrong direction. The answer here is to increase supply and provision and to take a different view of where we are going with our housing policy. That is why I am happy to have tabled my amendment and to see this debate widen.
My Lords, I support the amendment tabled by the noble Lord, Lord Kerslake, and the general trend of the other amendments in this group. On this occasion I speak as the Minister who was at the Dispatch Box at the other end of the building when the Localism Bill was going through the House. The flexibility that the noble Lord, Lord Kerslake, has referred to was introduced in that legislation. I was ready to stand at the Dispatch Box and to support the introduction of that flexibility for local authorities, which up until then had not had it.
In the spirit of localism and of taking at the local level decisions that are relevant to local communities, it is quite right that there should be that flexibility for councils. Something approaching 600,000 social homes are “underoccupied” and 400,000 are “overcrowded”—of course, I put both those in inverted commas—and something like 1.2 million families are on the council house waiting lists in this country, so there is clearly not a very good match between the existing housing stock and the needs placed upon it.
I entirely agree with the point that the noble Lord, Lord Bassam, and the noble Baroness, Lady Hollis, have just made about increasing the numbers but I disagree with their critique. I just draw their attention to the fact that up to 1997 1.5 million council houses had been sold off by the Conservative Administration. Between 1997 and 2010 another 421,000 net were sold off by the Labour Government. During the coalition Government, although I would be the first to agree that not enough new social housing provision was made, the fact is that for the first time in something approaching 25 years the net stock of social housing increased. I agree that it did not increase fast enough but the fact is that it increased.
I am very pleased about at least one provision of the Bill, and that is entrenching more firmly the one-for-one replacement policy, and indeed in London going for two for one. The noble Lord, Lord Kerslake, argued very cogently that the mechanics of delivery are not there but the intention is written in. Let us be clear: the question of supply is fundamental but it is also important to understand that other factors come into this as well.
I want to pick up on the point made by the noble Lord, Lord Young of Cookham, that it is time to rebalance things. That is exactly what the Localism Act did: it gave local housing authorities the opportunity to look at the demands and the needs that they and their communities faced and to decide whether they wanted flexibility in tenancy lengths in order to make its use more efficient and their communities more rounded. I believe that that is right.
It is counterproductive to say that everyone has to have a short tenancy. The noble Lord, Lord Young, is being unrealistic in saying that you can have a conversation with someone. I want to know what kind of conversation you have with a widow of 73 about her tenancy; then you have it when she is 78 and then when she is 83. It is preposterous. Clearly in that situation you make sure that the widow of 73 is in appropriately sized accommodation and not in a four-bedroom house that used to have six children in it, and then you say that it is a lifetime tenancy. This does not allow that to happen. It is a serious mistake which does not take account of the demographics.
The amendment of the noble Lord, Lord Bassam, is better than nothing but, again, it does not take account of the different choices which face people at different points in their life. If you are a young mother with two small children, which is quite a common circumstance in which to be allocated a tenancy at the moment, you will not necessarily need an 11-year tenancy and a short tenancy and a review may well be appropriate. However, as I say, if you are a widow of 73 you want a lifetime tenancy.
Yes, we need to increase supply, and the Bill is positive in stating what should happen. Yes, we need a balance, but we have already struck it. Whatever balance or policy we have has to take account of the demographic make-up of the people going into social housing because the length of tenancy that makes any sense will be different for people at different stages in their life experience and cycle.
My Lords, the noble Lord, Lord Young of Cookham, referred to a conversation. The conversation means the review. I go back to what I have said before. My noble friend intervened on me to say that the review to which he was referring was a review carried out by the Government. The Bill is quite clear that the landlord under a fixed-term secure tenancy of a dwelling house must carry out a review to decide what to do at the end of the term. Again I ask: what is in the review? What matters will the local authority have in mind when it is reviewing the tenancy at the end of five years? If Ministers cannot answer me now they can write to us and let us know precisely what they are. The local authorities will be interested.
On the question of increased supply, I go back to the comments of the noble Lord, Lord Young of Cookham. When we talk about supply we do not have to talk exclusively about social tenancies. We can talk about houses that are purchased on the open market. In the town where he lives, Cookham, and in Maidenhead, where I live, builders tell me that you can build in this country a three-bedroom house for £80,000 to £85,000. That same house in Maidenhead or Cookham would be on the market now probably for £350,000 to £400,000. What is the difference? The difference is in the land value. If we were to address the issue of land values within the United Kingdom and bring them down to what they should be we would not have this problem of having to make increased provision of social housing. We would be able to sell people brand new two or three-bedroom houses at sensible and reasonable prices and this Bill, as I have said before, would be unnecessary. The problem is in land values. So when we deal with supply let us look not only at social housing; let us look at the cost of land.
Noble Lords will be glad to hear that I am not going to enter a debate on land value taxation. I speak to Amendments 82C and 82D. I am also going to say something about Amendment 82F in my name and in the names of the noble Lords, Lord Beecham and Lord Stoneham.
It is important to note that this provision relates only to future tenancies. That makes it so much better than the pay-to-stay arrangements which cover everybody who is already a tenant and may feel a sense of insecurity as a result. Existing tenants are not affected by this. That means the 4.4 million tenants in social housing should not worry so much about it. The amendment seeks to extend the minimum period of a tenancy from two years to five years and the maximum period from five years to ten years under these arrangements.
My amendment is not a very good one, I have to confess. I do not think it is terribly helpful. It would be better to stay with the Localism Act 2011that the noble Lord, Lord Stunell, has explained to us. This gave local authorities the power to have short-term tenancies, but most local authorities of all political persuasions have decided that they do not want to go along with this. It is not very helpful. That is fine. They have that power available to them. I think we should probably leave things as they are.
It does not seem helpful, certainly, to the people who live there to be told that there is a mandatory limit on the time that they can stay before a rather nebulous review takes place. The housing associations have the opportunity to have shorter-term lettings of this kind. They also do not make much use of this. I have been chief executive of a housing association. I do not think we ever bothered with fixed terms of this kind. We wanted people to have a home to move in, settle down and stay. That was a service in its own right, getting people who had often had rather insecure lives the security to put down roots, send the kids to school and all the rest of it.
It is also, perhaps slightly surprisingly, the case that the new-look private landlords are the build-to-rent developers who are now building blocks of flats using insurance-company money, pension-fund money, who are coming into this business. They are interested in longer leases than the traditional six-month or 12-month shorthold tenancies. They see the sense of people staying.
Some noble Lords may have visited the build-to-let properties being built at Olympic Village. There are four-year leases, and people are talking about seven-year leases. It is a marketing ploy for them. It distinguishes them from the old-look private landlords. I think, therefore, that the tendency is to try to give people greater security of tenure, time to settle into places.
Amendment 82F is a little more specialist, but it seems important. As I read the schedule to the Bill, this part of the schedule says that the old-style secure tenancies will continue. If somebody moves because the council has required them to move—fair enough, the estate is being demolished or the tenant is being decanted temporarily. They move out but they do not lose their security of tenure. That is fine, but what the schedule says at the moment is that, if you apply to move, if it is your choice to move—perhaps it is an exchange with another tenant or a transfer to a new home—then you would lose your long-term security. This means that you would be ill advised to do so. If I was advising that tenant, I would say, “That is probably not a good idea, to lose your security of tenure”. This goes against the idea that we are extremely interested in stopping under-occupancy in this country. People will be moving very often to downsize, making way for other people who can move in, who may be overcrowded elsewhere. We want people to move and make best use of social housing. We do not want them to be frightened of doing that. It might be the mother fleeing violence—it is her decision; she wants to move elsewhere. It might be the overcrowded family getting the chance to move to somewhere bigger—they do not want to lose the security that they have at the moment. The amendment would delete that requirement. The Minister might explain to me that I am interpreting the provision inaccurately and that we have nothing to fear, but it looks as if the schedule, by removing security of tenure for people who transfer of their own volition, would be a bad move.
There does not seem to be any need for this, other than a kind of inbuilt feeling that people should feel a little bit insecure about their lives, which I do not feel is what those in the world of providing social housing want to happen. I would leave the Localism Act as it stands.
My Lords, I shall speak in support of Amendments 82G and 82GA in my name, as well as Amendment 82E to which I have added my name. First, I want to explain briefly why Clause 113 and Schedule 7 should not stand part of the Bill. This follows on quite well from what the noble Lord, Lord Best, was saying, because, as I said at Second Reading, the Prime Minister declared in his recent life chances speech:
“This Government is all about security”— not insecurity. He continued:
“Individuals and families who are in poverty crave security—for them, it’s the most important value of all”.
This is particularly true when it comes to housing, yet these provisions will destroy security for many in poverty or on modest incomes.
Shelter has observed that research shows that security of tenure goes to the heart of people believing they have a real, stable home—again picking up on the Minister’s call for us to keep coming back to that word “home”. More recent research just published by Heriot-Watt University, which interviewed tenants in current fixed-term tenancies, found considerable associated anxiety, especially among older people, people with health or disability issues and parents. As a lone parent with three children said:
“You can’t really sit back and enjoy the place like—because you always feel like you’re on borrowed time, so you’re always on edge”.
I believe that this measure undermines the Prime Minister’s own commitment to promoting security, but, if it goes ahead, it is essential that certain groups at particular risk are exempted and that those exemptions are enshrined in law rather than being left to the discretion of housing providers.
Amendment 82G would exempt those who would give up an old-style secure tenancy because they were fleeing domestic violence, the great majority of whom will be women. Shelter has argued that because social housing is generally allocated on the basis of need, there is a strong possibility that fixed-term tenancies will disproportionately affect people who fall into the equalities categories. I look forward finally to receiving the equality impact assessment on this measure, which I hope is a little more illuminating than the one that I have just received on pay to stay.
The Government have often repeated their welcome commitment to tackling violence against women and girls. The refreshed strategy, published last week, states that it will,
“provide victims and their families with support before a crisis point is reached and their only option is to flee their own homes—frequently with their children”.
That is very welcome, but Women’s Aid and other organisations working in this area fear that loss of genuine security of tenure will trap some victims in an abusive relationship for fear of losing their right to secure housing, not just if they move out but where domestic violence leads to the ending of a joint tenancy and the granting of a new sole tenancy in the name of the victim. As the chair of the Housing Law Practitioners Association comments, for such new tenancies to be fixed tenancies would be to penalise the victim for being a victim. I cannot believe that that is what the Government want.
A three-year longitudinal study carried out by the Child and Woman Abuse Studies Unit followed 100 women and their children as they rebuilt their lives after accessing domestic violence services from Solace Women’s Aid. Among its key messages was:
“Having a home in which women and children can feel and be safe is vital, removing the fear and insecurity which domestic violence creates”.
Housing insecurity interferes with all the processes that enable them to begin undoing the harms of domestic violence.
In a Written Answer on this issue, the Minister, Brandon Lewis MP, stated:
“Where existing lifetime tenants transfer, the provisions in the Bill ensure that local authorities retain a discretion to offer the tenant a further lifetime tenancy in their new home”.
I am afraid that is not sufficient. In the study I have just cited, women report that housing officers are frequently unsympathetic or disbelieving, or seem uninterested in their domestic violence histories. The security of victims of domestic violence cannot be left to the discretion of housing officers who might respond in this way. It needs to be enshrined in the Bill itself.
Similarly, with reference to Amendment 82E, the Government have indicated that regulations prescribing the circumstances in which a local authority may offer a further lifetime tenancy to existing tenants who move home will probably include where a tenant downsizes. But surely where they are downsizing because of the underoccupancy charge, this should be a clear legal entitlement and not reliant on local authority discretion. The Heriot-Watt study found that a number of people who have moved from a permanent to fixed-term tenancy because of the bedroom tax are particularly unhappy. One example was that of an older couple with serious health problems who had not wanted to move and now, after 17 years as secure tenants, had a five-year contract. The wife said, “I don’t think it’s fair at all. My husband is living on his nerves now, thinking about what’s going to happen at the end of the five years. He doesn’t need the stress or the pressure”.
I turn now to disabled people and their carers. Amendment 82GA would ensure that full-time carers and severely disabled people are given a lifetime secure tenancy when granted a social housing tenancy. I am grateful to Carers UK for drawing its concerns about the implications of this clause to my attention. It argues that shorter tenancies could have a very negative impact on carers and those for whom they care, creating additional unnecessary stress and anxiety as they countenance the possibility of having to move, with implications for care packages, availability of informal support networks which we heard about earlier, and suitability of housing, an issue I raised earlier with regard to pay to stay. If they have to move to the private sector, the problems only multiply. In some instances, carers have moved to be nearer a family member or friend for whom they are caring or moved to a suitably adapted property to care for them. If this now means giving up a secure tenancy, it could act as a real disincentive to fulfilling that caring role, at a potential cost to the local authority. Again, I cannot believe that this is what the Government want, so I hope they will consider giving a clear right to a genuine secure tenancy in such circumstances.
Finally, Carers UK has raised a related matter. Current social housing tenants have the right to improve and be compensated for improvements to their property. This can be very important in facilitating care or providing independence for a disabled person. Schedule 7 removes that right for tenants on a new fixed-term secure tenancy. Carers UK is again concerned about the possible impact on disabled people and their carers, making it even more likely than now that carers will suffer injury or ill health as a result of caring. Can the Minister clarify exactly what is intended by paragraphs 12 to 14 of Schedule 7—not necessarily now because I realise that it is late; I would be happy with a letter. Will she consider exempting those with a fixed-term secure tenancy who make improvements to their home to care for or facilitate the independence of a disabled person? Once again, a meeting with some of the organisations representing disabled people and carers could be helpful.
My Lords, I rise briefly to support the thrust of this group of amendments. The provision to limit tenancies to five years seems an odd idea, implying as it does bad effects on social cohesion and localism. At a stroke it will remove any incentive to care for, improve or decorate a council house, or even to tend the garden. The noble Lord, Lord Best, told us eloquently about where opportunities for short-term tenancies already exist and the fact that they have not been taken up. It will also inhibit the putting down of any roots in the community. People who feel attached to a community are much more willing to invest in social togetherness by contributing to voluntary and social activities.
The Minister, in a previous grouping, described how she recognises an owned property when she visits because it is in such good order. Surely the reverse principle applies here, where the shorter the tenancy the less incentive there is for the tenant to be houseproud. The ending of secure tenancies after five years could recreate in council housing the problems we see nowadays in short-term private renting, where tenants often move on very quickly. This includes the landlord’s extra costs of redecorating or possibly refurbishment. Equally, extra administration costs are bound to be involved.
Turning briefly to schools, we know that many schoolchildren are not getting into their parents’ first choice of school. The Minister gave reassurance to the noble Lord, Lord Bassam, recently about school-age children and their families not being required to move on at the end of the five-year period. However, what about families whose children have not yet reached school age? Surely this will cause huge difficulties for them in their planning. It will contribute to stress and anxiety in the family. Where indeed, would families be expected to go after their five years?
The greatest effect will be on those people on council housing waiting lists, adding enormously to their uncertainty. I support the amendments.
My Lords, I rise briefly as the hour is late. Notwithstanding the speeches from other noble Lords, we have heard two particularly powerful speeches—one from my noble friend Lord Stunell who reminded us of the importance of the Localism Act. Certainly, flowing from that Act, we have seen a very large number of quite remarkable things occurring in communities where local people have been given greater ability to take control of activities in their area. It is a powerful case for local determination of these issues. The noble Lord, Lord Kerslake, while also reflecting the same sentiments, touched on the importance of home and the impact of people’s feeling of security about home.
I have been pondering why it might be that the Government have brought forward these measures when it is perfectly possible to leave things as they are, with local discretion and determination already available under the Localism Act. The only justification I can see is in the Housing and Planning Bill’s impact assessment at paragraph 4.6.19. It is worth the Committee hearing what is said there. This is deeply worrying. It says:
“However, the guarantee of lifetime security may currently act as a perverse incentive preventing tenants from taking advantage of opportunities to improve their circumstances and leading to sub-optimal choices”.
If noble Lords wanted to find anything more patronising or paternalistic, they would find it very difficult indeed. If this is the justification for the measures before us, we should not be giving them much truck. I certainly believe that we have, in the Localism Act and measures that already exist, the ability to provide the flexibility that many have talked about, but at the same time to provide those people—often those on the lower incomes in society—with the opportunity to continue to have something that they can feel proud of and call their home.
I thank all noble Lords for their amendments. Before I turn to them, it may be helpful if I say a few words about the provisions in the Bill.
Clause 113 introduces Schedule 7. Together, these provide that, in future, with limited exceptions, local authorities will be able to grant only tenancies with a fixed term of between two and five years and will be required to use tenancy review points to support tenants’ move towards home ownership where this is an appropriate option. This delivers on a commitment in last July’s Budget to review lifetime tenancies. We expect that most tenancies will be granted for five years, as now, with two-year tenancies being used in only exceptional circumstances and we intend to provide guidance to this effect.
We are not abolishing lifetime tenancies altogether. We will continue to protect the security of tenure of existing lifetime tenants who remain in their home, as well as that of lifetime tenants who are moved by their landlord—for example, as part of estate regeneration. Where lifetime tenants choose to move to another social home, local authorities will have limited discretion to offer another lifetime tenancy. We will regulate to set out the circumstances in which they may exercise their discretion and we will make sure we work with local authorities in developing these regulations. We expect the circumstances to include where tenants downsize to a smaller property or where they move for work. Outside some limited exceptions, if local authorities try to offer a lifetime tenancy or one that is shorter than two years or longer than five, whether deliberately or by mistake, the tenancy will default to a five-year fixed term.
Local authorities will be required to carry out a review of the tenant’s circumstances between six and nine months before the end of the fixed term to decide whether to grant a new tenancy in the same or another more suitable social home, or to recover possession of the property. Where landlords decide to terminate the tenancy, they will have to provide advice on home ownership or other housing options as appropriate. Regular reviews will ensure that tenants with longer-term needs are moved into more appropriate housing as their needs change over time and that those who can move into home ownership are given appropriate advice to help them do so. Moving into home ownership could mean exercising the right to buy so that tenants can stay in their existing home. Where a tenant’s circumstances are broadly unchanged, the landlord will be able to grant a further tenancy in the same home. We think this is likely to be the outcome in the majority of cases. Local authorities have strong incentives not to allow the review to create future homelessness acceptances.
There are a number of checks and balances in place to ensure that local authorities use fixed tenancies and reviews appropriately. Tenants will be able to challenge the decision on the length of the tenancy and the outcome of the end-of-term review. Where the landlord is still minded not to grant a further tenancy, they will need to notify the tenant in writing of the outcome, setting out the reasons for the decision.
I am preoccupied by the review; let me explain why. You could have in an authority a councillor who makes representations to the chairman of the housing committee—to the housing manager or whatever—and influences a review. That is what worries me: personal interference in those decisions and reviews. That is why we must have something set down quite clearly in criteria so that local authorities know what they have to take into account to avoid unfair influence in that review decision.
The noble Lord is right, which is why we will be producing detailed guidance. Also, other people will be involved in reviews when a tenant appeals, so the situation that he describes should not happen. The tenant will also have the right to challenge the landlord’s right of possession as part of the possession proceedings in the county court. The court will expect the local authority to have behaved reasonably and proportionately.
New fixed-term tenants will have the same rights as most secure and flexible tenants do now. They will usually be able to terminate their tenancy at any stage by giving four weeks’ notice, while also enjoying protection from eviction during the fixed period. The local authority landlord will need to demonstrate to the court that one or more of the grounds for possession are proven and that they are acting reasonably in seeking possession.
Just as now, tenants will be eligible for the right to buy once they have accrued three years as a tenant of public housing, but this does not have to be three years continuously. As with flexible tenants now, they will not have the right to improve or to be compensated for improvements, but landlords will still be able to grant such rights with the tenancy agreement if they choose. The provisions allow for landlords to continue to operate an introductory tenancy regime, to demote fixed-term tenancies, and to provide for fixed-term tenants to be offered a family intervention tenancy.
I now turn to the amendments. The intention of Amendment 82BA is to allow local authorities to continue to grant lifetime tenancies to new, as well as existing, tenants. We are concerned that this would not ensure that we get the best use out of our social housing stock.
I apologise for intervening at this very late hour, but nowhere have we had an explanation of why the Government feel it necessary to move from a discretionary model that has been in place for a very short period of time to a mandatory model on local authorities.
I am just about to come on to some reasons.
Councils are already able to use flexible tenancies, as noble Lords have said, which are tenancies with a fixed term of two years or more. They have been able to do so since April 2012, when the changes introduced by the coalition Government’s Localism Act 2011 came into force, but they are not taking advantage of this flexibility. Instead, the vast majority of local authority tenancies—more than 90%—continue to be granted with lifetime security to people who may have only a short-term need. We do not believe that this is a good use of scarce social housing. As my noble friend Lord Young highlighted, there are 247,000 tenants who are forced to live in overcrowded conditions due to the lack of suitably sized properties, while thousands more occupy homes with more bedrooms then they need. Of course, there are also the 1.2 million households on council waiting lists that are waiting for a social home. We believe that the provisions in the Bill will ensure that social housing is properly focused on those who really need it for as long as they need it.
Amendment 82BB would ensure that new fixed-term tenancies have a longer term of 12 years in all cases. While I recognise that this would introduce consistency, I do not believe that this would be appropriate in all cases, as a household’s circumstances can change considerably in 12 years. The requirement for review points at two to five years will ensure that social housing is provided to those who need it most for the period of their need; that those with longer-term needs can be moved into more appropriate housing as their needs change over time; and that tenants can be supported into home ownership where this is a viable option for them, or offered support towards that in the longer term.
Amendment 82C would extend the minimum tenancy period from two to five years. In fact, most local authority flexible tenancies are currently granted for a five-year period, and we expect that this will continue to be the case, with two years used only in exceptional circumstances as now, and we propose to provide guidance to this effect. However, we recognise that there may be circumstances where shorter tenancies are more appropriate in order to meet short-term needs. Some councils are already using shorter tenancies to support young adults into employment and they could also be used to provide moves into accommodation for those recovering from drug and alcohol abuse. They may be useful for families who need a larger home for a short period only, or to make the best use of properties that are earmarked for demolition which would otherwise lie empty. We think that local authorities will welcome the continuing flexibility to grant shorter tenancies in these types of circumstances.
Amendment 82D would extend the maximum tenancy period to 10 years. As I have already said in relation to the previous amendment, a household’s circumstances can change considerably in five years, whereas the provisions in the Bill that will make five-year tenancies the norm will ensure that local authorities carry out regular reviews of their tenants’ circumstances. Of course, where a tenant’s circumstances are broadly unchanged, then the landlord will of course be able to grant a further tenancy in the same house.
Amendment 82E would guarantee that lifetime tenants of private registered providers—housing associations—as well as local authorities would have their security of tenure protected if they move to a local authority home. This would be the case, whether they are moved by their landlord or apply to transfer. It would specifically protect those who have moved as a result of the removal of the spare room subsidy. As I have said, the Bill already gives local authorities discretion to offer tenants a further lifetime tenancy in limited circumstances and we have made it clear that we expect to regulate to ensure that those circumstances will include where tenants move to a smaller property. This would include where they move as a result of the removal of the spare room subsidy. In developing the regulations we will consider the extent to which they should apply to lifetime tenants who move from properties owned by a private registered provider.
Amendment 82F would guarantee all lifetime tenants a further lifetime tenancy if they move to another council home. We recognise that existing lifetime tenants may want to move home for a variety of reasons, and we do not want to stop them doing so. However, with more than 1.2 million households on council waiting lists, it does not make sense to guarantee that everyone who has a lifetime tenancy will always have their security protected if they choose to move.
Amendment 82FA would ensure that where existing lifetime tenants move and they are above pension age, or they are moving to a home which has been or is designed to be adapted for someone who is disabled, they will always get a further lifetime tenancy. Of course, I agree it is important that suitable accommodation is available for older people and those who need adapted accommodation, and that the system should be flexible enough to allow people to move as their needs change over time. Ensuring that tenancies are reviewed every five years will help make this happen. However, we do not wish to restrict mobility in the social rented sector, which is why, as I said, the Bill includes provisions to ensure that local authorities have the discretion to grant existing lifetime tenants a further lifetime tenancy when they move home. We will work with local authorities in considering the circumstances in which lifetime tenancies should continue to be granted and will certainly give serious consideration to the needs of the elderly and those who require adapted accommodation as part of the process.
Amendment 82G would ensure that where existing lifetime tenants move as a result of domestic violence they will be guaranteed a further lifetime tenancy in their new home. I fully appreciate the intention behind this amendment. In developing the regulations that determine when a local authority may grant existing lifetime tenants a further lifetime tenancy when they move home, we will give very careful consideration to whether this should include those who are moving home to escape violence or intimidation of any kind.
The intention of Amendment 82GA is to guarantee that existing lifetime tenants who are severely disabled or have mobility or care needs—as well as those who are full-time carers—will always get a further lifetime tenancy if they choose to move. Again, I certainly appreciate the motivation behind this amendment. It is clearly important that disabled people and those who have other mobility or care needs can move to more suitable accommodation as their needs change over time. As I said, this is one of the drivers of the tenancies. Once again, I can confirm that in considering the circumstances in which lifetime tenants may retain their security when moving to a new council house, we will give consideration to whether the circumstances should include tenants with severe disabilities, mobility issues or significant care needs, as well as those who need to give or receive care.
The provisions in the Bill will ensure that social housing is focused on those who really need it for as long as they need it. It will ensure that local authorities get the best use out of their homes so that more households are able to access social housing and so that social tenants who aspire to own their own home are supported into home ownership where this is a viable option. I hope my responses provide reassurance that the Government are committed to supporting mobility within the social rented sector and, importantly, to protecting the safety and well-being of citizens. I am very happy to have further discussion on these points and to meet any noble Lords who would like further information on these matters. I hope that, with these assurances, noble Lords will not press their amendments and that Clause 113 stands part of the Bill.
I am sorry. The noble Baroness asked about the intention behind the provisions that govern a tenant’s rights to make improvements. Landlords will be able to grant such rights and officials would be happy to meet with carers’ groups to explore this matter, as the noble Baroness suggested.
Can the noble Baroness comment further on the points made by the noble Lord, Lord Stunell, when he talked about the Localism Act, which he obviously helped get through the other place in the last Parliament? How would the proposals here regarding secure tenancy square with that?
As I said, our aim is to make sure that people have access to social housing. We do not want to see thousands of tenants forced to live in overcrowded conditions, or occupying homes with more bedrooms than they need, or 1.2 million households on council waiting lists waiting for a social home. As noble Lords have said, local authorities have not used the provisions as much and we also need to think about all the people who need access to homes.
Clause 113 agreed.
Schedule 7: Secure tenancies etc: phasing out of tenancies for life
Amendment 82BA to 82GA not moved.
Moved by Lord Beecham
82GAA: Schedule 7, page 131, line 24, at end insert—
“(3A) A review under this section must be carried out in accordance with a clear and accessible policy that outlines—
(a) the circumstances in which the landlord may and may not grant another tenancy,
(b) the advice and assistance the landlord will give to the tenant in the event they decide not to grant another tenancy,
(c) the way the landlord will address the needs of households who would be at risk of homelessness in the event they decide not to grant another tenancy, and
(d) the way the landlord will tailor advice and assistance to meet the needs of vulnerable groups.
(3B) The Secretary of State shall be responsible for preparing, publishing and updating as necessary the policy under subsection (3A).”
My Lords, this amendment relates to Schedule 7 to the Bill, which refers to what is to happen in respect of a landlord’s obligation to deal with the ending of a fixed term of a tenancy. The amendment seeks a review of what will happen in accordance with a “clear and accessible policy” which outlines a series of factors: first, the circumstances in which the landlord may or may not grant another tenancy; secondly, the advice and assistance that can be given to the tenant in the event that it is decided not to grant another tenancy; thirdly, the way the landlord would address the needs of households that would be at risk of homelessness as a result of the failure to renew the secure tenancy; and, finally, the way advice would be tailored and assistance given to meet the needs of vulnerable groups. To back this up, there is a requirement that the Secretary of State should prepare, publish and update as necessary the policy to enshrine these principles.
The object is to offer at least a measure of comfort to those who find their secure tenancy ending, to assist them in relocating in a suitable way, and to ensure that they receive all necessary support from their landlord. It is a perfectly sensible approach and I hope that the Minister will concur. The amendment is meant to be constructive and helpful to both landlord and tenant. It is important that we allay some of the fears and misgivings which may arise in the minds of tenants if it is decided that their security is to end. One would hope that this would not be a frequent occurrence, but when it does occur there is a clear obligation on the landlord to make the best provision possible for alternative accommodation and to support the tenant through that process. I beg to move.
My Lords, I thank noble Lords for this group of amendments, which deal with the review that local authority landlords will be required to carry out towards the end of the fixed term. It is an important new protection that will ensure that those who need long-term support are provided with more appropriate tenancies as their needs change over time, and that households are supported to make the transition into home ownership where they can.
Amendment 82GAA would require the Government to publish a policy that local authorities would need to follow when carrying out the review, including about the advice and assistance that landlords should offer where tenancies are not renewed, and how landlords should address the needs of those at risk of homelessness. I do not believe that this amendment is necessary, for several reasons. Firstly, it is our intention to provide guidance to local authorities on the sort of factors we expect them to consider when carrying out the review and it is therefore not necessary to provide for this on the face of the Bill.
Secondly, while I agree that landlords should provide advice on housing options if they decide not to renew a tenancy, this is already provided for in the Bill. Thirdly, as I have said, local authorities have strong incentives not to allow the end-of-tenancy review to create future homelessness acceptances.
Amendment 82GAC would require local authorities to consider whether a decision not to grant another tenancy could result in homelessness and, if they think it could, would require them to provide the tenant with advice and assistance on finding another home. Where a landlord decides not to renew a tenancy, the provisions in the Bill already ensure that the tenant has the opportunity to challenge the decision, as I explained previously, as well as sufficient time to find alternative accommodation following advice from their landlord on buying a home or other housing options. There are also existing duties under the homelessness legislation that require local authorities to give advice and assistance to those who are homeless and threatened with homelessness. For these reasons, we do not believe that the amendment is necessary.
Amendment 82GAD would mean that whenever the local authority decided on review that it was unrealistic for the tenant to buy a home, it would have to grant a further social tenancy. We want local authorities to use the tenancy review points to support tenants to move towards home ownership where it is appropriate, but of course we recognise that this will not be a viable option in every case. Where families continue to need social housing, of course the local authority will be able to offer a further tenancy at the end of the fixed period. Where tenants’ financial circumstances improve significantly, councils may decide that they are able to move out of the social rented sector into private rented accommodation, or they may decide to offer a further tenancy but on a higher rent.
What is to stop a local authority terminating the tenancy and then moving the tenant—because it has a responsibility, as the Minister has said—on to a sink estate in the same area; in other words, congregating in part of the district problem tenants who have been forced out of their property when their tenancy has been reviewed? These things happen.
It would not say much for the behaviour of the local authority, which has a responsibility. I would hope that that would not happen. Obviously, as I have said, there is an opportunity for the decision to be reviewed and then to go further, to the county court—so there are options available for a prospective tenant.
I hope my responses provide reassurance that within the Bill there are adequate safeguards for tenants. The new review procedure will ensure that landlords make appropriate decisions, based on households’ housing needs, and that where they decide to terminate a tenancy, landlords will need to give ample notice and provide advice to support tenants’ access to alternative accommodation. These changes are about supporting local authorities to make the best use of their social housing stock and supporting tenants into home ownership, not making the vulnerable homeless. With these assurances, I ask the noble Lord to withdraw his amendment.
At this time, I am not disposed to prolong the agony. I beg leave to withdraw the amendment.
Amendment 82GAA withdrawn.
Amendments 82GAB to 82GAD not moved.
Schedule 7 agreed.
Clause 114 agreed.
Moved by Lord Beecham
82GAE: After Clause 114, insert the following new Clause—
“Incidence and prevention of homelessness
(1) Upon the coming into force of this Act, the Secretary of State must undertake a review of the incidence and prevention of homelessness and rough sleeping.
(2) The review should include consideration of the effect that Chapters 3 and 6 of Part 4 will have on levels of homelessness and rough sleeping in each local authority area.
(3) A report on the review must be published, and laid before each House of Parliament, no later than six months after the coming into force of this Act.”
Perhaps I should just say something. I am not going to make a long speech on this, your Lordships will be pleased to know.
I will formally move it. I just think we need a proper debate, not at 11.30 pm, on the growing problem of homelessness and rough sleeping. We will deal with that on Report if the Government are not able to come forward with some assurances in the mean time. But it is too late to get into such an important issue, so I shall move the amendment formally.
I will speak to Amendments 82GB and 82GC. They would provide a right to succession and secure tenancy for a carer where there is no spouse or common-law partner. Without this, carers who have given up so much to care for a parent or sibling could be rendered homeless when the person they have cared for dies or moves into residential care, even if they have lived in the property for many years. This is because, as it stands, Schedule 8 to the Bill will standardise all secure council tenancies by removing the automatic right to succession for anyone but a spouse or common-law partner, as with all secure tenancies granted after 2012.
Carers UK demonstrates the potential impact of such a measure through the story of John, who gave up his music career to care for his father who had Alzheimer’s disease and his mother who had severe psychiatric problems, moving back into his parents’ council property to become a full-time carer in 2010. Last year, John’s father had a severe fall and was hospitalised, and later moved permanently to a nursing home due to his care needs. John’s mother has now become impossible to care for and the family are exploring the option of residential care due to her increasing needs. Under the Bill, if John’s mother moves into care, he will have no right to succeed to the tenancy and will be evicted from the family home by the council.
The least we can do for carers such as John, who gave up his career to care for his parents and depleted his savings in doing so, is ensure that they have the ability to stay in their home once their caring role ends. While local authorities will continue to have discretion to grant succession rights in certain cases, the guidance on this is very poor and must be updated to include carers—something I hope the Minister will look at. Better still, their right to succession where there is no spouse or common-law partner, should be enshrined in legislation.
Lastly, it is important to note that these amendments are in line with recommendations put forward by the Law Commission’s review of housing. The Law Commission recommended that in the absence of a spouse or partner a “reserve successor”, such as a carer, should be able to inherit the home if it is their only or principal residence. In fact, until 2012 the government guidance also recognised that those providing care should have the opportunity to inherit the tenancy. However, I understand that this section of the guidance to local authorities was removed in 2012. The Minister very kindly agreed to meet Carers UK to discuss the previous amendment. I suggest that we add this issue to the agenda for such a meeting, especially in the context of the Government’s carer strategy, currently in development, which looks at how we can better support carers across all aspects of their lives.
I thank the noble Baroness for her amendment. While I remember, I will happily extend the discussion with carers’ groups to cover this as well as the previous issue. I know it is late, but before I turn to the amendments perhaps it would be helpful to say a few words about the provisions in the Bill.
Clause 114 introduces Schedule 8, which changes the rules on succession to secure tenancies and makes equivalent changes in relation to introductory and demoted tenancies. Currently, there are significant differences between the succession rights of secure tenancies granted before April 2012 and those granted after that date when changes introduced by the Localism Act 2011 came into force. These provisions will deliver a consistent approach across all local authority tenancies by bringing the succession rights to tenancies granted before April 2012 in line with those granted after that date. They will put common law partners on an equal footing with married couples and civil partners. Other family members of those with secure tenancies granted before April 2012, who may have had an expectation that they would succeed because they had lived with the tenant for at least 12 months, will lose their statutory right to succeed. Instead, local authorities will have discretion to grant whatever additional succession rights they consider appropriate. Where local authorities grant additional succession rights, we expect them to apply the same rules to tenancies granted before and after April 2012. However, we will provide guidelines to assist local authorities to exercise their discretion.
Spouses, civil partners and those who live together as such will continue to have an automatic right to succeed to a lifetime tenancy. However, in future, where local authorities decide to grant additional succession rights, if the deceased had a lifetime tenancy, the successor will be given a five-year tenancy. In line with other fixed-term tenants, there will be a review at the end of the five years. Where the tenant is still in need of social housing, the landlord will be able to grant a further fixed-term tenancy of up to five years. These changes will not apply where the tenant died before the Bill comes into force.
Turning to Amendments 82GB and 82GC, which would give full-time carers a statutory right to succeed to introductory and demoted tenancies, we are concerned that they could lead to inconsistency and as a result could be confusing for tenants. The Bill will deliver a consistent approach across all local authority tenancies, whether they are secure, introductory or demoted, and will ensure that the succession rules are consistent with the changes that we are making to lifetime tenancies.
As I said, spouses, civil partners and those living together as a spouse or civil partner will continue to have a statutory right to succeed to a lifetime tenancy. However, we think it is difficult to justify why other people, who may not even need social housing, should have an automatic right to succeed when there are thousands of households on council waiting lists. Neither do we think it is right that they should be able to inherit a lifetime tenancy when all new tenants will receive fixed-term tenancies in future.
Instead, we think that it makes more sense for local authorities to have discretion to provide any additional succession rights they think appropriate. This will mean that local authorities will be able to give additional succession rights, not just to close family members, but to other people including those who have given up their own home to care for a tenant over a number of years. However, where they grant additional succession rights, and the deceased tenants had a lifetime tenancy, they will receive a five-year fixed-term tenancy.
We believe that the changes strike the right balance between protection for tenants and their families, and flexibility for landlords. On the basis that we would be happy to discuss the issue further with Carers’ UK, we hope that the noble Lord will be happy to withdraw his amendment.