My Lords, I congratulate the noble Lord, Lord Bassam of Brighton, and the whole of the Select Committee on their excellent report. It is a brilliant and comprehensive analysis of the issues affecting our seaside towns and a road map for the positive changes that could transform these places.
I will say something about housing in coastal towns, which is covered by chapter 5 in the report, which notes:
“Issues relating to housing emerged as one of the most prominent concerns voiced by coastal towns”.
Many of the housing concerns in the seaside towns are the same as those elsewhere. Their problems are national ones; most prominent is the need for many more homes that are decent, secure and affordable for those who need them. As elsewhere, what is needed will not be met by reliance on the oligopoly of volume housebuilders providing their standardised homes so profitably on out-of-town greenfield sites. Coastal towns, just like other places, require investment in regenerating what is already there, utilising brownfield sites and bringing existing homes up to decent standards.
Many of the Select Committee’s recommendations call for central government to eschew national, one-size-fits-all policies and give local authorities greater flexibility to prioritise what councils see to be the best approaches locally. This definitely goes for housing, and I strongly support all the committee’s housing recommendations. I will pick up just one aspect of these tonight and target it under the broad heading of devolving decision-making. My chosen single issue is the subject of the Select Committee’s recommendation that,
“the Government implements changes to the system for the calculation of local housing allowance rates in areas with high densities of HMOs”— houses in multiple occupation—
“to ensure it more accurately reflects local market rents”.
Dull and technical this certainly sounds, but herein lies an enormously important matter that the Government’s response to the committee has not covered.
I had the real pleasure of visiting Blackpool in March and was greatly impressed by the commitment, energy and determination of the council’s staff handling housing matters. I was equally impressed by the team from the council’s subsidiary body, the Blackpool Housing Company, which is doing fantastic work acquiring and upgrading truly awful redundant tourist accommodation. However, I discovered that, like many other seaside towns, Blackpool’s efforts are being hopelessly undermined by the way the housing benefit system is operating there. The system, based on local housing allowance which sets the figure that the DWP will pay in housing benefit to cover rent, has incentivised the worst kind of landlord to buy up and let out really appalling slums while simultaneously making it impossible for the council and its partners to upgrade the quality of the housing in central Blackpool. How has this situation come about?
The local housing allowance, LHA, fixes the level for housing benefit payments at the rent being charged for properties in the cheapest one-third of all rented properties that are located in that broad rental market area. Because Blackpool lies within a broad rental market area that covers a number of more upmarket locations, a high proportion of all Blackpool’s rented housing falls easily within the 30% cheapest of the whole area. Moreover, this very unsophisticated local housing allowance does not distinguish on the basis of space standards or the condition of the property, so a tiny flat in dismal condition in a dilapidated terrace has the same local housing allowance—which housing benefit will cover—as a decent apartment in a restored avenue.
Nor does the allowance pay any regard to the quality of the management and maintenance service: the absentee slum landlord is treated in the same way as the most conscientious local landlord. As an example, a minute one-bedroom flat in Blackpool in a property divided into eight such units commands a local housing allowance of £85 a week; £680 per week from the DWP for the whole house, with no improvements and no maintenance. Conversion by the Blackpool Housing Company into four decent one-bedroom flats let at market rents would produce half the income for infinitely better appointed and managed accommodation. Because rogue landlords—I was told that a number of those coming into town pay for their properties in cash—can get such a high return, they will always pay more for those properties than responsible, decent providers. The Government’s housing benefit is fuelling the business of disreputable operators and preventing real solutions.
In other parts of the UK, the LHA figure for housing benefit causes quite different problems, greatly compounded by a freeze since 2015: in so many places the LHA level is lower than actual market rents for virtually any available property, so there is a gap or shortfall between the payment obtainable from the DWP for rent and the actual rent that must be paid. The tenants reliant on the state in these places must cover this shortfall from their other benefits, which were meant to be for food and heating, et cetera. But this shortfall is not the problem in many seaside towns, with their legacy of cheap, run-down guesthouses and B&B properties. Rather, in Blackpool and similar towns, your rent will be fully covered, making these places magnets for DWP claimants and a place for other councils to send their vulnerable claimants. Every year, around 5,000 households eligible for housing benefit move into Blackpool, many of them with personal problems—of physical and mental health, drug abuse or alcoholism. Blackpool’s suicide rate is the highest in the country. A system that concentrates the most vulnerable in one place and incentivises this trend into the future is a disaster for that place’s health and well-being.
Of course, I greatly encourage councils to use all their powers to enforce proper standards; government has recently introduced some tough extra measures to enable local authorities to tackle rogue landlords. However, this is attacking the problem after the event, not preventing it, and reductions in funding for local authorities and the priority that must go to social care and other essentials has meant cuts in personnel, including environmental health officers and trading standards officers. Enforcement against bad landlords will not be enough while the housing benefits system continues to undermine all the council’s efforts.
The solution for Blackpool and other seaside towns is to make this local housing allowance truly local by engaging with councils such as Blackpool to set the LHA level dependent on the market within the specific locality, and the property’s condition, space standards, management and maintenance. The intention must be to remove the current incentives for the very worst kinds of landlords who concentrate as many vulnerable people as possible into appalling conditions, and instead to create a level playing field for the vital work done by social landlords and other not-for-profit and genuinely responsible operators so that they can transform these seaside towns.