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

With this it will be convenient to discuss the following:

Amendment 3, in Clause 5, page 5, line 45, at end insert—

“(e) conditions relating to the assessment of the needs of persons who are residents or potential residents of supported exempt accommodation.”

This amendment sets out that assessing the needs of people who are residents or potential residents of supported exempt accommodation is a condition that may be attached to a licence.

Clause 5 stand part.

Amendment 5, in clause 6, page 6, line 29, leave out “statutory”.

Amendment 6, in clause 6, page 6, line 38, leave out “statutory”.

Amendment 7, in clause 6, page 6, line 40, leave out “statutory”.

Amendment 8, in clause 6, page 7, line 3, leave out “statutory”.

Amendment 9, in clause 6, page 7, line 4, leave out “the Local Government Association” and insert “local authorities in England”.

Clauses 6 and 7 stand part.

Clauses 4 to 7 are the heart of the Bill, because Clause 4 sets out the licensing regime that we wish to introduce. The measure is permissive and will allow local authorities to introduce the licensing scheme if they so choose. There is a great deal of detail in the clause, which leads on to the further provision in clause 5 and the provision in clause 6 about the need to consult, as the Minister has set out. Consultation is mightily important, because this is where all the good providers need to give the Government feedback on how they are operating and what needs to happen.

I should explain the amendments that I have tabled in respect of consultation. In the draft Bill, we put the Local Government Association down as a statutory consultee. Following that, the LGA came back to us and said, “We don’t want to be a statutory consultee, but we generally want local authorities to be.” The LGA does not want to act on behalf of all local authorities because this is a permissive measure and not all local authorities will want to introduce a licensing scheme. Therefore, the amendments are sensible tidying-up amendments. I think our explanation yesterday may have caused Ministers and officials some confusion, but I hope that the amendments can be made to ensure that the legislation is appropriate.

The key is making the licensing scheme, if it is introduced, common across local authorities. One of the things that has been brought home to me loud and clear by a number of organisations that operate across a number of local authorities is that they do not want a licensing scheme to be different from one authority to another, so as far as possible it needs to be a common practice across local authorities. It also needs to be compulsory. Birmingham Members know that Birmingham tried to introduce a voluntary scheme; all the good providers signed up, but funnily enough the rogue landlords said, “Well, we don’t have to, so we won’t.”

In debates on previous clauses, we talked about the standards to be provided and the requirements on local authorities and the Secretary of State, but the heart of the Bill is a licensing scheme that is fit for purpose and ensures that fit and proper persons operate in these areas and provide accommodation. We must ensure that not-for-profit originations are not completely inconvenienced and that the fees are not so high that organisations are impoverished and driven out of providing accommodation in the first place.

Exempt accommodation can be provided only through a not-for-profit organisation. The scandal at the moment is that unscrupulous landlords buy a property, expand it to the maximum possible under permitted development, provide a small living area and a small bathroom, stack the house with as many people as they physically can, and then claim housing benefit on an enhanced basis for vulnerable people. Members might say, “Well, hang on. That’s a private landlord operating that way,” but what the private landlord does is set up a not-for-profit organisation alongside that, to which they lease the property. The not-for-profit organisation runs the service and provides the rent to the landlord, but the landlord is also running the not-for-profit organisation.

That scam has to be dealt with, which is one of the reasons why a licensing regime needs to be introduced so that we have a fit-and-proper person test and ensure all the aspects of what needs to be provided. We must ensure that accommodation is decent and that the services for vulnerable people are provided in the way they should be. We cannot have a situation in which vulnerable people are exploited and almost retained as prisoners within their own accommodation. That is extremely important.

It is a pleasure to serve under your chairmanship, Mr Efford. I wholeheartedly agree with this Bill. We have seen on the Levelling Up, Housing and Communities Committee some of what the hon. Gentleman has outlined and some of the scandalous places people are forced to live. The leverage that rogue landlords have over them is absolutely appalling and at times life-threatening. Is he talking about landlord licensing only for exempt accommodation, or right across the board? Should private landlords be part of the landlord licensing scheme? A pilot was successful in Liverpool, but it has ended.

Generally speaking, licensing schemes for private sector housing are outside the scope of this Bill. We are looking particularly at supported housing and exempt accommodation. We have had some discussions about extending the scope of the Bill to all supported housing. I think the hon. Gentleman is referring to a very different licensing regime, which of course can be introduced, but we are concentrating on vulnerable individuals who are provided with accommodation.

The problem is that exempt accommodation is just that: it is exempt from all the regulations relating to houses in multiple occupation and all other aspects, and enhanced housing benefit can be claimed as a result. There have been some financial scandals. As the hon. Member for Liverpool, West Derby knows, during the Select Committee inquiry we uncovered a number of scams; whether we can fix them all in this Bill is another matter. What we can do—what we are doing—is lay out a whole series of things. When the Bill was first drafted this section was a great deal longer. We were convinced—I cannot remember by which Minister, but one of the three—that we should remove a large section and put it in regulation, because it is then easier to change and amend as the market changes.

The sort of people we are talking about will look at every particular avenue to escape the regulation. We need to make it clear that there is going to be a regulatory regime, that it is as common as possible throughout the country, and that there will be further details in regulation after the consultation has taken place. The licensing regime that the hon. Member for Liverpool, West Derby referred to is very different; this one is specifically to deal with this particular challenge, in respect of which there is currently no regulation at all.

I will speak to Amendment 3 and raise a couple of other issues relating to the provisions under consideration.

On amendment 3, during our Select Committee inquiry one of the issues we heard from those concerned was how individuals got into exempt accommodation and how often people with very different needs—and sometimes very different but challenging behaviour—get put together in a completely inappropriate way. The worst examples were of women fleeing domestic violence being housed in the same building as people who have been perpetrators of that violence in the past. We heard about people trying to give up an addiction who were housed in the same building as people with a track record of dealing drugs. It was simply not appropriate; there is no control over who goes where. Gumtree and Facebook were regular means by which individuals accessed exempt accommodation. That was not satisfactory.

The standards to be enforced are set out in Clause 5(3). Everyone agrees that licences should cover the standards of accommodation, as well as the use of the accommodation, the provision of care—or lack of it in some cases—and compliance with the national supported housing standards. The one thing the Bill is missing is the issue of access to that accommodation. That is why I put into amendment 3 words about,

“conditions relating to the assessment of the needs of persons who are residents or potential residents of supported exempt accommodation.”

We should take account of people’s needs and ensure that in future housing people with completely different and often conflicting needs and lifestyles—such as the perpetrators of domestic abuse being housed with victims of domestic abuse—simply cannot happen.

I accept that the wording may not be completely correct. I am hopeful that the Minister will accept the spirit of what I am trying to put forward, if not the precise wording. I look forward to what she has to say.

I have two other points. As the hon. Member for Harrow East said, of key importance are clauses 4 and 5, on licensing. Clause 2, on local supported housing strategies, places additional requirements on local councils. Will the Minister confirm that those requirements will be considered as new burdens, and that appropriate discussions will happen with the LGA and councils about that?

Finally, one of the most appalling things we heard about in our inquiry was the scams that take place. In the end, we could improve the accommodation for the same money that has been spent, had it been spent better. One of the examples we heard was about the council leader in West Devon. Quite rightly, we have heard a lot about Birmingham—my hon. Friend the Member for Birmingham, Selly Oak was the first Member who came to me to say that this was a major problem that the Select Committee needed to look at—but we heard from the leader of West Devon about a portfolio of 12 properties that were sold to a special purpose vehicle for £6 million. On the same day, they were sold to an offshore investment company for £18 million. That is a £12 million profit for a portfolio of properties.

What is happening in many cases is that it is not property organisations that provide exempt accommodation. Organisations buy up these properties and rent them to an organisation—sometimes one they have created themselves as a subsidiary—that is not for profit. But that not-for-profit organisation is charged an enormous rent by the profit-making organisation, and that feeds through into the level of housing benefit that is eventually paid out on behalf of the occupiers of exempt accommodation. It is that sort of scam that needs to be stopped.

I would like to ask the Minister for some assurances, having looked at the wording in clause 5(5)(b) on

“removing or restricting an entitlement to housing benefit” and limiting the rent. Will the Minister be looking to stop these sorts of scams by using the powers set out in the Bill so far?

I will start with Amendment 3, then move on to amendments 5 to 9, and then I will follow up on the points raised by hon. Members.

On amendment 3, the Government agree that it is vital that the needs of supported housing residents are properly assessed so that they get the help they need, and for supported housing to deliver the right outcomes. My original intention was to include the requirement for individual needs assessments in the national supported housing standards, as that will be a needs assessment and will cover the accommodation provided and the care and support package.

The hon. Member for Sheffield South East has raised an interesting point, and I agree that putting the measure on the face of the Bill may have some merit. However, more detail is needed to flesh out the amendment. It particularly needs to spell out what the needs assessment covers in more precise language and how it interacts with care, support and provision. I would be happy to talk more about the matter with the hon. Gentleman, and I am happy to consider making changes to be introduced by the Government on Report. On that basis, I ask him to withdraw amendment 3.

I understand that amendments 5 to 9, tabled by my hon. Friend the Member for Harrow East, are technical and are there to remove the Local Government Association from being named as a statutory consultee. The Government believe that “statutory” can remain on the face of the Bill in respect of amendments 5 to 8. I could go into more detail, but in the interests of time, and as this is a more technical matter, I ask my hon. Friend to withdraw the amendments to delete “statutory”, because we believe that removing it does not materially affect the duty being placed on the Secretary of State to consult the named organisations.

On amendment 9, I understand that the Local Government Association has requested this change. I am happy to support the removal of its name from the Clause, but elsewhere in the Bill we have referred to “local housing authorities” and “social services authorities” and I am disinclined to introduce a third term. I propose to my hon. Friend that we work on an alternative, including local housing authorities or social services authorities, and that the Government will table that amendment on Report.

Mr Betts, did you want to speak? I got the impression you did not want to get up.

I was hoping to say one or two things and that the Minister might respond to my points about new burdens and benefits.

I completely forgot; I was trying to rush through the amendments. My apologies.

First, on new burdens assessments, I confirm that an assessment will be made and that local authorities will get money for any new burdens. I anticipate that the new burdens will come about through setting up the strategies for the five-year period, and the initial set-up of the licensing scheme.

Secondly, I agree with the hon. Member for Sheffield South East that we cannot allow the scams to continue. It is an absolute outrage that public money is going towards rogue landlords when it should be used more effectively to help vulnerable people in society. That dovetails with the point, made by my hon. Friend the Member for Dover, that we need a linkage between housing benefit and the national supported housing standards. The hon. Member for Sheffield South East has my word that the Department for Levelling Up, Housing and Communities, working closely with the Department for Work and Pensions, will look to get rid of the scams. Clearly, it will take work and require a lot of deep analysis, but we are determined to look to make that linkage with the DWP.

Fortunately, I can allow people to speak more than once, but whether the Minister will answer questions is not a matter for the Chair. The hon. Member for Sheffield South East has got his points across. Bob Blackman, your body language said to me that you did not want to get up again.

I was just wary about who else was standing up.

You should be in my position!

In relation to the amendments, the most important thing to remember is that with the vulnerable people we are talking about, every case is unique; individuals have unique needs. Good supported housing organisations will provide an initial assessment of what those needs are so they can build a support network. The Amendment tabled by the hon. Member for Sheffield South East, the Chair of the Levelling Up, Housing and Communities Committee, requires that to happen.

At the moment, rogue landlords do not provide any assessment of needs whatsoever. The only need they are interested in is how much money they can get from the housing benefit regime. I agree that we need to look at this in more detail to make sure it is correct, but it is in the spirit of the Bill and there is a need to specify that this will be a requirement for providers. They must assess the needs of the individuals they are responsible for housing.

Let me turn to my amendments. I accept the Minister’s strictures to look at tidying up this area. As I have said, the Local Government Association does not want to be a statutory consultee. Therefore, we could tidy the wording up a bit in relation to housing and social services authorities to ensure the language is consistent. I agree we could do that on Report.

Question put and agreed to.

Clause 4 accordingly ordered to stand part of the Bill.

Clauses 5 to 7 ordered to stand part of the Bill.