Private Rented Sector Ombudsman

Thursday 18th January 2024 Lords Chamber

Question

11:17

Asked by

[Baroness Warwick of Undercliffe]

To ask His Majesty’s Government what progress they have made in designing and tendering for the new Private Rented Sector Ombudsman Service.

[Baroness Warwick of Undercliffe (Lab)]

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare an interest as the chair of the Property Ombudsman for tenants and those in the PRS whose landlords use agents.

[The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)]

The Renters (Reform) Bill allows the Government to select a scheme through open competition or to appoint a provider to deliver a designated scheme. In Commons Committee, we announced our preference to deliver through the Housing Ombudsman service, which provides social housing redress. However, no final decision has been made, and our priority is choosing a provider that offers the high-quality and value-for-money service we require.

[Baroness Warwick of Undercliffe (Lab)]

I thank the Minister for her reply. I very much support what the Government are doing to establish a landlord ombudsman for the private rented sector; it is long overdue. Given that the new ombudsman will cover the whole of the rental sector—the one for social landlords has been indicated as the preferred option—can the Minister confirm that the Government will consult existing ombudsmen in the sector on the rationalisation, and can she explain how they will fit into the new landscape? Can she confirm that the Government’s final decision in selecting an organisation to provide a unitary ombudsman service for the combined social and private rented sectors will follow the formal public procurement process? What will the timescale be?

[Baroness Scott of Bybrook (Con)]

The noble Baroness asked a number of questions. First, we have sought extensive procurement and legal advice on this, and we are confident that the approach we are taking is in line with procurement regulations. I can only reiterate that this work is still in its very early stages, and no decisions have been made. Of course, we will talk to stakeholders throughout the whole of the process. If the noble Baroness or any other noble Lord would like to meet me and my team, I am happy to do so as we go forward.

Secondly, the question on the interaction between schemes is very interesting. We envisage that, where a complaint covers both landlords and letting agents, the separate schemes will work together to triage the complaint effectively and, if necessary, have a joint investigation. Importantly, we want to make sure that, where it is not clear which scheme a tenant should complain to, there is no wrong access point. We will work together to make sure that the tenant gets the service that they require.

[Lord Young of Cookham (Con)]

My Lords, I too welcome the Bill’s proposal to establish a private rented sector ombudsman service. There will be an opportunity when the Bill reaches your Lordships’ House to discuss the issues raised by the noble Baroness, Lady Warwick, as to where this service should best be provided. What powers will the ombudsman have to enforce his or her findings? Who will bear the cost?

[Baroness Scott of Bybrook (Con)]

I thank my noble friend. He is absolutely right: the Bill will come to this House shortly and I am sure we will have many more debates on this issue. As far as powers are concerned, the Bill says that the ombudsman’s enforcement powers will be to expel the landlord from membership of the organisation unless they deal with their obligations and then rejoin, and they will be liable for civil and, in the worst cases, legal penalties if they continue to operate without that membership. Those are quite strong powers that will back up local authorities’ powers. On the scheme’s funding, it will be a landlord membership scheme, as is the Housing Ombudsman scheme. Membership of that scheme is at £5.75 per unit.

[Lord Khan of Burnley (Lab)]

My Lords, when the Government’s new or expanded ombudsman is established, it will have to work closely with local authorities and will have enforcement responsibilities, but it is important that that work is not duplicated. Does the Minister have any plans for the department to issue guidance on how local authorities and the ombudsman can work together? How do the Government propose to resource the new ombudsman service, given the potential increase in demand that may emerge?

[Baroness Scott of Bybrook (Con)]

Of course we will work with the local authorities as the Bill moves forward. The ombudsman will complement local authority decisions and back them up.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I very much welcome the expansion of the ombudsman service. My worry about what appears to be a decision by the Government is that representatives of private tenants, which will be different from the ones dealt with already, will not get a voice if there is no open procurement. I hope the Government will look to representatives of private rented accommodation to ensure that they are involved in the choice of ombudsman so that it fits that particular client group.

[Baroness Scott of Bybrook (Con)]

My Lords, of course we will, but what is important is the tenants, who sometimes do not know where to go. In my opinion and that of the department, it is important that they have one front door and that they get the services they require.

[Lord Stunell (LD)]

My Lords, can the Minister give us some idea of the timetable by which these things will come into force? In the meantime, Section 21 evictions are continuing, private tenants are at a major disadvantage and landlords are, it appears, accelerating their use of Section 21 to pre-empt the incoming legislation, so the settlement of these issues is really important. Can she give us some help on when we will actually see an ombudsman in post working and dealing with the complaints that private tenants very legitimately have?

[Baroness Scott of Bybrook (Con)]

That is a really important question with a very simple answer: we intend to have the redress available as soon as we can after the Bill receives Royal Assent. We are working on that strongly at the moment, because it is an important service for tenants.

[Baroness Eaton (Con)]

My Lords, I declare my interest in the private rented sector. Can my noble friend the Minister tell us how the private sector will be made aware of this new process, if and when this new policy is implemented?

[Baroness Scott of Bybrook (Con)]

I thank my noble friend. It will need a lot of communication. We have already had Make Things Right in the social rented sector, which has increased people’s awareness of the scheme to 63% from below 55%. We will continue that campaign. As we move to a new ombudsman for the private rented sector, we will continue to have a strong campaign to ensure that all rented sector tenants understand their rights.