Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Lord Kerslake
Baroness Hollis of Heigham (Lab)
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.
Lord Kerslake
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.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Lord Kerslake
Baroness Hollis of Heigham
My Lords, the Minister has now said twice that, under her proposals, any household paying a higher rent under pay to stay should, instead, be thinking about right to buy, and that she would prefer them to do that. If they are local authority tenants, can afford to do so, and wish to, they will already have taken this up. Why does she think they have not? One reason is that, with renting, changes in housing benefit and UC can be made in the course of the year if income fluctuates and circumstances change—the very situation which tax credits were devised to adjust. If you commit yourself to buying a property, no such consideration takes place of whether you can, or cannot, afford your mortgage repayments. If you are struggling with your income, your zero-hour contract has collapsed, or your partner has gone somewhere else, you are still stuck with it. Tenants may, therefore, have very good reasons—this obsession with pushing those who have chosen not to buy into right to buy, and whipping them there by virtue of the pay-to-stay rent policy, is disgraceful.
Lord Kerslake
Perhaps I could add one further point. It is perfectly possible to pilot this in a way that would not be inequitable to tenants. What you would be piloting is the information-gathering on income and how the different exemptions and changes might work on the ground. You do not need to change the rental position. What we really need to know is: does the system work in a way that is effective and fair? It would be perfectly possible to do that, modelling the system at local level without disadvantaging those tenants who were part of the pilot.
Housing and Planning Bill
Debate between Baroness Hollis of Heigham and Lord Kerslake
Baroness Hollis of Heigham
Yet some of us have been assured, as my noble friend says, that Clause 68(3) was drafted precisely to cover those authorities with stock transfer. In my county of Norfolk, Norwich has retained its council stock, there is limited retention in Great Yarmouth and King’s Lynn, and the other four authorities transferred their stock into housing associations. Are we saying that authorities such as Norwich are not only supposed to fund the RTB discounts for housing association tenants in their immediate locality but are also, on top of that, to cross-fund all those stock-transfer authorities so that they do not contribute to the right-to-buy discounts of housing association authorities?
Clause 68(3)(b) says that the Secretary of State may,
“treat the housing as being likely to become vacant whenever it would have been likely to become vacant if it had not been disposed of”.
The whole point of that, we were assured—I am sure the Minister will clarify this for us—was precisely so that stock-transfer authorities were levied in lieu of the fact that they do not have stock to sell, which local authorities that retain their stock may be in a position to do.
Lord Kerslake
My Lords, there is a fairly simple explanation for this. An authority that has already transferred its stock, as the noble Lord, Lord True, has talked about, is in a good position, because it will not pay the levy. If, on the other hand, an authority would like, in the future, to transfer its stock, it will still pay the levy. I have an amendment later which seeks to remove that particular provision. It seems quite extraordinary that an authority cannot, in the future, transfer stock, but if it has transferred it, it will escape any levy. That seems to me to be an imbalance that we need to address.
Welfare Reform and Work Bill
Debate between Baroness Hollis of Heigham and Lord Kerslake(8 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Kerslake (CB)
My Lords, I declare my interest as chair of Peabody and president of the Local Government Association. I support Amendment 50 and wish to speak specifically to Amendments 53, 61 and 63. I will keep my comments brief as I am conscious of the hour.
I add my welcome to the movement and the moratorium referred to by other noble Lords. This is a demonstration of the Government listening and acting, which I welcome. I reinforce the importance of taking early decisions and not using the whole year for the review process, not just because of the uncertainty for existing schemes but for investment in new schemes that are so desperately needed.
Amendment 53 follows on from the debate we had in Committee, when we debated the very abrupt move from the 10-year plan of CPI plus 1% for rent increases to a four-year period when there would be a 1% reduction per annum. We had a considerable debate on what the impact of that change of policy would be. In tabling an amendment in Committee, I was ever hopeful that after the four-year period the Government might return to the original 10-year plan. However, the noble Baroness, Lady Williams, made it clear that that was not the Government’s intention and that they would take a decision on future rent movements in four years’ time. Given the difference of view on this issue, with the Institute for Fiscal Studies clearly saying that there will be a loss of housing association new build as a result of this policy and the Government’s view that the figure will be absorbed through efficiencies and reductions in surpluses, it seems to me imperative that an evaluation is undertaken before policy is set in four years’ time. I emphasise that it should be an evaluation, not simply monitoring the existing policies, and that that evaluation should be independently commissioned.
There is plenty of precedent in government for doing this—for example, with the new homes bonus, where such an independent evaluation was produced and published, and, indeed, influenced government policy on the bonus going forward. It is good practice for government when they introduce such a significant change to not just monitor the impact of that change but to evaluate its impact in the widest sense. That is why I think this amendment is so important. I would like to hear from the Minister what the Government’s view of this is but also how they expect to assess this impact.
Amendments 61 and 63 come together because they relate to social rents and affordable rent. I take very seriously the debate we had yesterday on the Housing and Planning Bill, and particularly the Minister’s view that we should do everything possible to maximise new housebuilding in this country. I endorse that view, whatever that new housing happens to be. This issue is specifically about new build schemes and the flexibility there has hitherto been for setting rents at the commencement of those schemes. This relates not to the viability of the housing association but to the individual schemes. It is why I have tabled the amendments which perhaps require a bit of elaboration.
When a housing association considers its investment programme in new supply, it looks at two things. First, it looks at its wider viability as a housing association and the risks attached to the scale of the programme it is undertaking. The second thing is to look at the viability of the individual scheme before it commits to it. In some cases the scheme will be highly viable and profitable and would go ahead regardless of this rent reduction. In other cases there will be schemes that were not viable before and with the rent reduction would most certainly not be viable now.
However, there is a small but important group of schemes which are on the margin of viability, with risks that are evenly balanced. Having the flexibility to start the rent at a slightly different point at the time the scheme starts will crucially influence whether those schemes go ahead and whether they do so now. This is the particular issue that I am focused on. It will not be a big cost but the numbers could be important. Given the crisis that we face on housing, “every little helps”. I hope that Ministers will hear this point and retain that flexibility. The small cost that is involved will be far outweighed by the confidence it gives to housing associations to go ahead with their schemes. I urge the Government to consider this carefully.
Baroness Hollis of Heigham (Lab)
My Lords, I have a brief comment and a brief question.
I support everything that the noble Lord, Lord Kerslake, has said. On Amendment 53, I urge the Minister to take seriously the need for housing associations to be able to plan their building programme and their revenues more than three to four years ahead. The viability of their bank covenants depend on that, and, therefore, their capacity to manage new investment. If there is a query as to whether this 1% rent reduction will be continuing in three years, in whatever form, there will be a serious question mark over the Government’s ability to meet their goal of affordable housing through the social landlord sector.
I urge the Minister to take that amendment very seriously. Some of us have been engaged in negotiations with banks worried about there being no direct payments and therefore tenants having to pay rent out of their UC. They were worried that this would destabilise the rent roll and asked if they could refloat their loans at X, Y or Z. Some of us have already been through that and banks are quite willing to inflate a risk in order to get the revenue returns they would like to see on their covenants. Therefore, the more predictability the Minister can give us, the better. I hoped we would have a clear line, and that after 2019-20 this would stop. If it does not, housing associations and local authorities will have real difficulty in managing their business plans.
Like everyone else I welcome the one-year suspension of the 1% rent reduction in the social rental and supported housing sector. Can the Minister tell me how that will end? Does he expect to notify the House by virtue of an SI? In other words, will he say to the House that from this point on this accommodation will, as a result of this review, be expected to have a 1% rent reduction? Will the Government claim financial privilege, given that it will be a financial measure, so that this House will find it very difficult to discuss it and, possibly, ask the other place to reconsider?
Cities and Local Government Devolution Bill [HL]
Debate between Baroness Hollis of Heigham and Lord Kerslake
Baroness Hollis of Heigham (Lab)
My Lords, I, too, support my noble friend’s amendment. This is a very welcome Bill and we are delighted that the Minister—together with her boss, the Secretary of State—is so committed to localist values. That is great, and it is very welcome.
However, one of the problems that we found in Committee is that—because of the desirability that the energy in the Bill should come from the bottom up, from localism and from local authorities trying to establish what works best in their patch—it will be very difficult for those of us outside the great authorities to know what will or will not be acceptable to the Secretary of State as future patterns for combined authorities. No general principles of any sort are laid down in the Bill—anything may go, or nothing may go. We do not want to descend into ad hocery, and we do not want to descend into blueprints, but we do need to learn from what the Secretary of State is supportive of in other bids so that those that follow in the wake of those bids can devise a structure of combined authorities that are more likely not to waste our time, waste resources or raise false hopes in our local taxpayers but will command the support and, I hope, the assent of the Secretary of State as the way forward.
If the Minister is not willing to do this—and she has very good reasons not to be willing—and lay down principles by which local authorities may guide their submissions to the Secretary of State, it will be important for the rest of us to learn through example which submissions have been successful with the Secretary of State so that we can model ourselves on the best practice that he has commended. It seems to me that this amendment is entirely in the spirit of what the Minister wants and what the Secretary of State should follow. It is the route forward to combine the best of localism and a bottom-up approach, while avoiding a straitjacket of top-down structures and allowing us to learn from each other what is going to be best practice in the eyes of the Secretary of State. I hope very much that the Minister can support something that seems very strongly to support the path that she wants to go down and we want her to go down.
Lord Kerslake (CB)
My Lords, I declare my interest as president of the Local Government Association.
Noble Lords will know from my maiden speech my passionate commitment to devolution and support for this Bill. It is because I support devolution that I think we should support Amendments 1 and 2 today. An annual report and a devolution statement seem to me to be entirely practical and sensible additions that will further devolution, not hinder it.
The exam question before us is: why, given that all three of the main political parties have supported devolution for as long as I can remember, has progress been so slow and uncertain? Here are four quick reasons. The first is the silo nature of central government. Departments think “police, health”, but they never think place. Secondly, devolution is inherently disruptive. I recall a senior official saying to me that he was very supportive of the city and local government deals provided they did not get in the way of delivering his current programmes. I did say that that was the entire point. Thirdly, there is a dislike of difference in this country, and devolution is different in different places. Fourthly, there is often nervousness at local level, particularly in voluntary and community organisations, that this will be a cosy deal between central and local government that will leave them on the sidelines.
What is proposed here is a powerful antidote to those very powerful pressures and is designed to keep the Government to their intent as set out in the Bill. If agreed, these amendments will advocate and ensure transparency and reduce the risk of one step forwards, two steps backwards, which has bedevilled the devolution debate. Indeed, the Secretary of State, Greg Clark, produced something very similar to annual reports on progress in departments in the previous Government. We should support both amendments as practical and sensible moves that will keep the Government to their intent and advance the cause of devolution.