Baroness Williams of Trafford
Main Page: Baroness Williams of Trafford (Conservative - Life peer)Housing and Planning Bill
Baroness Williams of Trafford Excerpts
The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)
My Lords, I thank noble Lords who have spoken in the debate and the noble Lords, Lord Kennedy and Lord Beecham, for their amendments. I welcome the suggestions on how we could limit the payments that are required, and their consideration of the potential impacts that the policy could have on local authorities. As I said before lunch, I also welcome their arguments on alternative ways of defining high value for the purposes of the Bill.
I understand the criticism of the impact assessment made by the noble Lord, Lord Beecham, but it was intended as an outline, not as a detailed value-for-money assessment. Alongside the impact assessment accompanying the Bill, we have worked in partnership with the Better Regulation Executive to produce regulatory impact assessments for all measures, including all reforming regulation on business or civil society. This is in line with the Government’s Better Regulation Framework Manual and these assessments are subject to independent scrutiny by the statutory Regulatory Policy Committee.
The regulatory impact assessments were not appropriate for the extension of right to buy and HVA measures. The extension of the right to buy to housing associations is voluntary, not regulatory, and the sale of local authority HVAs affects only the public sector. Of course, we are fully aware that we need to go through all the detailed steps of option appraisal and value-for-money analysis. We agree that this is necessary to ensure that Ministers’ decisions are informed by a full value-for-money analysis. That is why we have done very extensive and—as the NAO acknowledges at paragraph 3.17 of its report—internal analysis. We have clear processes to require this internally.
The work we have done includes policy costings in line with OBR/HMT guidance, an economic assessment of right-to-buy extension, which underpinned a bid in the SR for the pilot scheme, ongoing analysis of the costings, the impact of the sale of HVAs and the commissioning of new data to support this, analysis of financial flows and an inequalities impact assessment. We will publish further detail later this year. In the case of right to buy, this will be jointly with the HA sector, as the details of the voluntary agreement are developed, including though the pilots. In the case of HVAs, this will be alongside secondary legislation following Royal Assent. I reiterate that noble Lords’ contributions will inform these considerations, as will the thoughts from the other place and our engagement with local authorities and the other stakeholders.
Before I address the amendments in detail, I shall provide a general response to, and defence of, these measures, and in particular Clause 67. This chapter on the sale of vacant, high-value local authority housing is one important contributor to the Government’s aim of increasing home ownership and housing supply. The Government are taking the lead in managing public assets, selling where it is right to do so, and local authorities should do the same. We talked about this at length this morning. We want local authorities to sell their high-value vacant housing so that the value locked up in those properties can be released. This value will be used to fund the right-to-buy discounts for housing association tenants and the delivery of additional homes.
I know that there are a number of concerns about the policy.
Lord Beecham
What is the proportion between the right-to-buy discount and the provision of new homes?
Baroness Williams of Trafford
Well, we are all fairly frustrated about this, I think it is fair to say. I have to keep telling noble Lords that I am not ready to give the details. But as your Lordships know, I will do so as soon as I can.
Baroness Hollis of Heigham (Lab)
I am sorry. We have been hammering away about SIs and all the rows we have had on this, but will we have this information before the Bill completes its passage through this House?
Baroness Williams of Trafford
As I have just said, I anticipate that it will be after Royal Assent.
Baroness Hollis of Heigham
We have spent a long time on starter homes, where we are not going to get the detail until after Royal Assent because the Government have only just started the consultation process and that will inform the regs, so outside bodies—discussion groups—will inform the regs, not this House. Now we are being told the same thing about all the detail on right to buy and the apportionment of how much money will go into replacing local authority housing and how much will go into housing association discounts.
We cannot make legislation on this basis, where all the detail is in the ether, awaiting consultations that should have started last September but which the Government have got round to only in the past few weeks—too late to inform discussions, but the Government are unwilling to delay parliamentary scrutiny until we have that information. Then, as and when we get the statutory instruments, we will not be able to amend them as we should if we feel we need to. This is a travesty of House of Lords scrutiny.
Lord Kennedy of Southwark
I endorse the comments of my noble friend Lady Hollis and the noble Lord, Lord Shipley, about the inadequate position we find ourselves in. I know that the Minister is frustrated as well but it would be useful if she could tell the House what discussions are going on in the department. This is absolutely ridiculous now. I am no expert in procedure but this is definitely a Bill that should be paused. It is ridiculous. To be told that we will get stuff months and months in the future is just not good enough.
Baroness Williams of Trafford
I thank the noble Lord, Lord Kennedy, and hope I might be able to perhaps provide some comfort to noble Lords. The secondary legislation will be subject, obviously, to parliamentary scrutiny. We want to set it out as soon as possible but we also want to ensure that it is correct and informed by accurate data. I cannot provide exact timescales for secondary legislation at this stage but I will do my best to provide further information on this on Report. I know that that is not perfect, but I hope noble Lords will accept what I say at this point. I will do my best.
Lord Campbell-Savours
Would it be appropriate for the Minister to ask the Leader of the House to make a Statement to us next week on exactly where we are? We cannot handle legislation in this way. If the Minister is obviously not in a position to deal with it, it should be taken up in the Cabinet by the Leader of the House.
Baroness Williams of Trafford
My Lords, I am not sure about the Leader making a Statement. I am certainly making a statement as to my intent. I know that noble Lords are not happy, but I will bring forward what I can when I can. As I say, I will elect to have details ready on this by Report.
Lord Foster of Bath (LD)
I apologise, and I know that the Minister is as frustrated as the rest of us, but I just remind her that at Second Reading I specifically asked whether she could provide us with a tentative timetable for when various bits of secondary legislation would be made available to Members of your Lordships’ House. The Minister gave me an assurance at that time that she would do her best to try and provide that. The department must have a timescale. They have a team of people working on these different issues and the members of those different groups must have some indication of where they are and when things are likely to be available. Could she at least try to do what she said she would do at Second Reading, and make that available to Members of your Lordships’ House?
Baroness Williams of Trafford
I did say that—the noble Lord is absolutely right—and I will. One of the important things to be aware of at this stage, as I said at the beginning of today’s debates, is that much of what is being debated in your Lordships’ House will inform a lot of the thinking on how the regulations are shaped. In that sense, noble Lords are helping to inform government thinking on this.
Baroness Hollis of Heigham
My Lords, nobody, genuinely, is criticising the Minister. I would not want to be in her position at all and, frankly, I would not have been allowed to be in her position. What we have is the brazenness, if you like, of a manifesto commitment being used to wing a Bill through both Houses without adequate information. I know the Minister is absolutely doing her best, but with all respect she cannot answer the questions being put. We understood when we were doing the Cities and Local Government Devolution Bill that that was a framework Bill because it was bottom-up and everything was going to be tailored in response to what local authorities themselves wanted. We accepted that then, but there is no justification at all for the same process to be applied to this Bill. Frankly, it should not be happening, and it did not happen in previous times. The Cabinet should not have permitted the Bill to go forward until it was ready. It is not ready.
Lord Beecham
My Lords, will the Minister report to the Government that this House very much regrets the impossible position in which she has been placed by the Government, has every confidence in her good intentions but regrets that she has been unable to fulfil them because the issue is entirely out of her control, and has confidence in her but has no confidence thus far in the way the Government are proceeding?
Baroness Williams of Trafford
I thank noble Lords for their words, particularly my noble friend, given that I have not been here for 11 of the past 13 years. This is a very complex Bill and how to proceed with or without some of the secondary legislation that goes with it is quite new territory for me. As the Bill is so necessarily complicated, I imagine that with it will go an awful lot of secondary legislation. I will definitely commit—I have already promised and I do not intend to break my promises—to the noble Lord, Lord Foster of Bath, that that timetable will be with noble Lords in the next week or so. That is on the record now: the timetable of secondary legislation will be with noble Lords in the next week or so.
In defence of myself, in a sense, and certainly of officials, I make a plea to noble Lords to avail themselves of some of the technical briefings that are going on as the Bill proceeds. They are incredibly useful for getting some of the detail. I know most noble Lords here have attended the briefings, but please continue to do so.
Lord Shipley
My Lords, perhaps the Minister could tell me when the next set will be. I thought the technical briefings had come to an end. I attended at least three and, I have to say, they were profoundly unuseful for the very reason that we are aware of across your Lordships’ House: virtually no question we ask can be answered because nobody who is an official knows the answer to it.
Baroness Williams of Trafford
My Lords, I have asked for additional briefings to be provided over the next week or so, until we come to the Recess, and I will be attending them. They might help me; I certainly hope they will help noble Lords. It is very helpful for me to be there and to understand what sort of issues noble Lords are bringing up. I totally accept that I committed to giving that timeline, and it will be with noble Lords in the next week or so.
I have met each political group within your Lordships’ House; I hope that noble Lords have found that helpful. Some points that noble Lords bring up in debate definitely inform government thinking, because this House has more local government leaders and representatives in it—and experts on the Cross Benches—than the other place. Therefore, this House will be very helpful in informing the Government.
Baroness Blackstone (Lab)
My Lords, I am sorry to interrupt the Minister, but I just wanted to make a brief point. Useful as ministerial briefings are—they are very valuable and are given much more than they used to be when I was a Minister—they are not a substitute for having the regulations in draft form, which we really need to examine the Bill properly in Committee. I hope that she will accept that point and pass it on. It is not a matter of criticising officials—it is not the role of parliamentarians to criticise officials—but I am very critical of LegCo, or whatever the Cabinet committee is now called, which agreed to put the Bill into both Houses without doing the necessary work beforehand.
Perhaps the Minister can also respond to the question of the noble Lord, Lord Foster, about the affirmative procedure; she has not given an answer to that. It is vital in this particular case.
Baroness Williams of Trafford
I will be responding formally to the DPRRC’s report, and specifically to that point, very soon indeed. I think that I said that to the noble Lord either earlier today or at our previous sitting.
Lord Foster of Bath
Earlier today, the Minister assured me that I might be a little bit cheered by what she was going to say later. I confess that I am a little bit cheered, but I want her to say yes, they will be affirmative.
Baroness Williams of Trafford
The days blur into one a bit, my Lords, when we think about the days we have spent debating.
I wanted to respond to the question of the noble Lord, Lord Beecham, about the appeal mechanism. The process for setting the payments is set out clearly in the Bill. The determination under Clause 67 will set out the formula and the payments, and the Government are required to consult before making a determination. Once the draft determination has been prepared, local authorities will be given the opportunity to check the figures and raise any queries with the Government. I know that that is not essentially an appeal process, but there is a toing and froing of views before the actual determination is made.
I turn to Amendment 63. I should make it clear that the policy has two aims: first, to fund the extension of the right to buy to housing association tenants; and, secondly, to build much-needed new homes. I reassure the noble Lords, Lord Kennedy of Southwark and Lord Beecham, that we have no intention of using the funding for any other purpose.
The second aim, the funding of new homes, is the reason why I do not want to restrict the payment that local authorities make to the Government simply to the same amount as the right-to-buy discounts for housing association tenants, as Amendment 63 would do. There may be times when local authorities do not want or are unable to deliver new homes, and I do not want to compel them to build more homes if they do not have the plans or processes in place to do so. As my noble friend Lord Lansley said, I want the flexibility in those circumstances for the Government to use that portion of the receipts to deliver new homes through other channels. Therefore, it will need to be paid to the Government. Flexibility will be essential to ensuring that the new homes needed are built.
Lord Beecham
Just to clarify, does that mean building new homes potentially in a different locality from that in which the money has been raised?
Baroness Williams of Trafford
My Lords, it could be, but the overall thing is that we will be adding to the stock of homes in this country.
Turning to Amendment 64, the changes proposed would be a significant task for local authorities, for which they would need considerable guidance. The biggest difficulty would be how to ensure that any methodology used across the 165 stock-holding local housing authorities was applied fairly, consistently and transparently. We have collected data from all stock-holding local authorities to enable a consistent methodology to be applied to determining the high-value threshold. That does not mean that we would set one high-value threshold for the whole country. Noble Lords have probed this on several occasions today, and I want to confirm again that we have the flexibility in the legislation to define it in different ways for different areas, as we know that house prices vary vastly across the country. However, it would mean using the same data and the same principles to apply a consistent approach to setting the definition of high value. The amendment would effectively transfer the onus of defining “high value” from—
Lord Stunell (LD)
I thank the Minister for giving way: she has had a difficult day. She has just given us some welcome news, which is that the high-value thresholds could be differentiated in different areas. Can she confirm that that would be down to a local authority scale—a local housing authority scale—or would it go to even a lower scale than that, say to a parish level in a rural area?
Baroness Williams of Trafford
My Lords, I would anticipate that it would be at a local authority level, although I acknowledge that, in some local authorities such as Trafford and Stockport, there are variations within them.
At the heart of this policy is the provision of more homes, and that is why I cannot accept Amendment 65. If we can use the value locked up in this housing to provide more places for people to live, we should be doing so, without trying to put limits on what proportion of the existing housing stock can contribute to it.
Lord Campbell-Savours
The Minister referred to a local authority level. Will there be some local authorities that will be designated as not having any high-value stock at all?
Baroness Williams of Trafford
My Lords, that might well be the case, depending on how it looks when all of the data are analysed, but I will not anticipate what the data will show. Theoretically, it could be the case.
If we can use the value locked up in the housing to find more places for people to live, then we should be doing so; 10% seems to be an arbitrary figure and it is not clear at what point in time this 10% would be calculated. We believe that we should base our decisions on evidence. That is why we have undertaken a large data-gathering exercise to determine the value of each council home and intend to use that information to set the definition. That is a fairer approach.
Finally, the changes proposed by Amendment 66 would provide that housing cannot be high value if its sale value is less than the cost of providing another home of the same number of bedrooms in the same local area. That is why, theoretically, the answer could be yes. We do not want to tie local authorities to an expectation that new housing should mirror that which has been sold, which this amendment would do. This may not be what is needed in the area, and we believe there should be flexibility to ensure that new housing is delivered that meets need. However, we want local authorities to sell their higher-value vacant housing, so that part of the receipt can be used to fund the building of much-needed additional homes that better meet housing need.
We recognise that there would be a perversity about requiring a house to be sold that would not generate sufficient receipts to cover the specified costs and deductions, the element for funding additional homes and the receipt to government to support the voluntary right to buy for housing association tenants. We will be looking at the data we have collected carefully to ensure that that is not the case. I hope that this provides some surety to noble Lords and provides some explanation of why we cannot accept this amendment.
Lord Campbell-Savours
I shall suggest another scenario. Let us take my former constituency area of Workington. The council is Allerdale. Three-quarters of Allerdale is fairly poor, but it includes the town of Keswick where there are some very high-value council properties which never change hands. People do not give up a house in the national park readily. Yet, as I understand the arrangement, that authority will be levied on the basis of homes within the national park which are almost never sold. Is that fair?
Baroness Williams of Trafford
I have just agreed, in a sense, with the noble Lord that we want to guard against some of the problems that he outlines.
Baroness Hollis of Heigham
I think we are pleased that the Minister shares our concern, as we would expect her to do, about the widespread abuses, some of which apply to RTB on council housing, and which will certainly, if we do not check them, apply to RTB on housing association sales. Given the local government experience, which is not normally found in her civil servants, supportive though they may be, would she consider setting up a working party, possibly with the LGA or whatever, including some housing practitioners, fraud experts, lawyers and the rest, to see how she can build fraud out of this system before it is too late? I completely trust her, of course, about how she sets this up and who she talks to, but we share a common agenda here, and if any good is to come from this policy—I worry about it—it will be dwarfed, some of us fear, by the abuses and the screaming headlines she is going to find in the press a year or two down the line as some of these abuses come to light. I do not ask her to make a commitment now, but will she take away the proposal so that she can come back to us, perhaps on the next day in Committee, and say that she is going to set up such a working party with appropriate people—the LGA would obviously be the first point of call, and lawyers, as well, some of whom have acted for the wide boys in the past, as I know—to see how she can build out fraud in a more effective way than at the moment we believe may happen?
Baroness Williams of Trafford
My Lords, I will certainly undertake to engage with the different sectors because they are at the heart of where potential abuse lies. I am very happy to meet with noble Lords in that context because the Government certainly want to guard against abuse in this way. I thank the noble Baroness for making that suggestion because it makes everybody’s life easier if there is confidence in the policy. She might not like the policy, as she says, but if there is confidence in the policy working better, then I will do that and I will invite her to it. My noble friend Lord Lansley is not in his place, but he talked about wanting to work with the Government about agreements. We have been engaging with local authorities, including South Cambridgeshire District Council and Cambridge City Council, and we will as we continue to go forward.
The noble Lord, Lord Campbell-Savours, made a very good point about preventing properties being sold to foreign buyers. It is absolutely right that we should avoid residential properties being bought up and sitting empty as an investment, as they sometimes do in London. Some of them are empty but, whether or not they are, the point is that we want housing for people on low incomes here to be able to avail themselves of.
I mentioned the point about stamp duty the other day and the noble Lord, Lord McKenzie, immediately picked it apart. In April 2017 we will be introducing capital gains tax for owners based overseas. We have also halved the time that a property can sit empty before capital gains tax is due. I thank noble Lords for their very constructive comments, and ask the noble Lord, Lord Beecham, to withdraw the amendment.
Lord Kennedy of Southwark
Before the Minister sits down, I think I heard her say that the money collected from councils would be used only for housing—I think she said that with regard to the levy. I looked at Clause 73, which says that where there is an overpayment it is kept by the Government and will be used to offset for future years. It also talks about Section 11 of the Local Government Act 2003, which talks about capital receipts being used to meet capital expenditure but also “debts or other liabilities”. We are going to come to this later anyway, but I think that what she said and what this technically does might be quite different.
Baroness Williams of Trafford
I will look at it again. I am assuming that the debts and liabilities are housing loans.
Lord McKenzie of Luton
There is one further point that has been troubling me. Given the hour, I was going to leave it, but I shall just raise it now. It is to do with Clause 68(3) and the provision that we discussed before lunch, and for a while after it, about treating as still owned by a housing authority property that has been sold. Is it the intent that those provisions last in perpetuity? If a local authority has been hit by a levy in respect of properties, it would have no opportunity of selling if that is what it chose to do.
Baroness Williams of Trafford
I think the answer is yes. If it had kept its stock, it would be levied, as the noble Lord points out. If, after the Bill goes through, it decided to transfer stock, it would still be levied. That is my understanding of it.
Lord McKenzie of Luton
Does that mean it would have no control over whether it could realise any of those high-value properties if they were included in the transfer?
Lord Beecham
My Lords, as ever, it has been an interesting debate—necessarily, I am afraid, longer than any of us would have liked but there is a huge amount of detail and a great many concerns about the Bill.
I thank all Members for their contributions, particularly my noble friend Lord Campbell-Savours, who regaled us with some very worrying details of life in Westminster. However, I caution him sometimes to take Zoopla’s valuations with a grain of salt; for a short period my own house in Newcastle, a pleasant four-bedroomed semi, was valued by Zoopla at £5.96 million, which would have made it by a considerable margin the most expensive house in the city. When I pointed out that this was possibly slightly overdone, Zoopla corrected it, and I have been going round ever since saying that I have just lost something over £5 million on the value of my house. So one has to look carefully at some of the figures. However, I dare say that the rest of my noble friend’s figures were robust.
The Minister has again earned the thanks of the House for the way in which she is endeavouring to deal with an almost impossible task. If anybody deserves some promotion and recognition among Ministers who serve in this House, she qualifies, and I expect my 10% of any increased salary for acting as her agent when that matter arises. However, I take issue with some of the conclusions that she has come to and indeed some of the replies that she made. She talks about selling the properties where it is right to do so. The question is: who determines where it is right to do so? The answer is not the local authority, which has knowledge of the local community, but, effectively, the Government. That is a ridiculously formulated conclusion because it does not put what should essentially be a local decision in the hands of anybody accountable to the local community but gives it to some machinery established by central government.
The Minister was unable—presumably because the information is not there—to give any indication about the balance of how the levy money would be spent between facilitating housing association right to buy and new build. This may be part of the information still being compiled in some office somewhere in the city, but it is crucial that we know what the intended balance should be between those two distinct options for the use of the money which will be derived either from sales, which is in the view of many of us bad enough, or even worse, from the Government anticipating sales long before perhaps they have occurred and requiring payment from the local authority. Given the position of local authorities, it is difficult to see how that levy could be funded. Perhaps subsequently we might have an indication from the Minister or the Government in general as to how they envisage authorities being able to fund such payments in advance of a sale.
The Minister was critical of Amendment 66, which deals with replacing such expensive housing. I cited the position in Newcastle, which I suspect will be similar in many other authorities, where a small proportion of properties in council ownership are large properties because of the need for five bedrooms, perhaps because the family is large or because there are special needs in relation to providing for disabled people—perhaps a carer needs to be on the premises, and so on. If all of these have to be sold as they come on the market, in Newcastle’s case, as I have indicated, we have roughly 28 applications a year for these properties and a turnover of only five a year. So on average it will take five and a half years now to accommodate applicants for accommodation of that kind. If the properties have to be sold—and only a handful become vacant every year: five a year—there is virtually no chance of that demand being met. I do not know whether anybody has given any thought to that difficulty. I suspect that roughly similar proportions would be found in many other authorities.
I invite the Minister to ask her officers, or whoever advises the Government on these matters, to look very specifically at the demand for that kind of large accommodation. Of course, there are other higher-value properties which are not of that size, but I ask that she look at the question of larger properties needed for larger families or for people with particular needs that must be met with that space and at how that would fit into the present proposals. At the very least, perhaps the Minister could look at a possible government amendment to deal with what would be a very real situation. The numbers are not large but the period is long for people with a need which might not otherwise be met. Having said that, I beg leave to withdraw the amendment.
Baroness Williams of Trafford
My Lords, I thank all noble Lords who have taken part in the debate. In responding to Amendment 66B, I assure noble Lords that we are committed to using a portion of receipts from the sale of vacant council housing to fund the delivery of more homes. We have chosen a way that will not require all local authorities to deliver that housing, as we know that in some cases they do not want to be responsible for it. Instead, authorities can choose to enter into an agreement with the Secretary of State to retain part of the payment in order to use it to deliver more homes. This is the same process as currently happens with the sale of properties under right to buy.
Baroness Hollis of Heigham
I want to ask the Minister this as I genuinely do not know what the answer is. If the local authority wishes to retain some share of the proceeds, but the demand for discounts, even within its own city area, surpasses the amount that it wishes to retain to replace its stock, how will the decision be made?
Baroness Williams of Trafford
My Lords, in that sort of situation, I would imagine that the local authority has a number of options available to it, including the use of capital reserves, or indeed borrowing if it wished to. Alternatively, of course, private sector developers could build housing. A number of options are open to councils in bringing forward more houses within the local authority area, including the retention of a portion of the receipts in order to deliver new homes.
Lord Shipley
A moment ago, the Minister talked about vacant homes, and I really would like to be clear whether the Minister is talking about vacant homes or surplus homes. Is there a clear definition that we can have on the record of what a vacant home is and what a surplus home is?
Baroness Williams of Trafford
My Lords, when I talked about vacant as opposed to surplus, we were talking about assets that were surplus in terms of government but vacant in terms of local authority homes. Vacant, in my mind, means empty, but there will be more detail later defining at what point a property becomes empty.
Lord Shipley
If a vacant home is a home which is empty, for how long does it have to be empty and can a local authority say that that empty home is actually required but just happens temporarily to be empty?
Baroness Williams of Trafford
That is precisely the point I am making. We will be defining what empty—that is, vacant—means in due course in the dreaded regulations.
The Government will be able to ensure that under these agreements local authorities will, as I have said, use the receipts efficiently to deliver as many new homes as possible. Where they have an agreement, we want local authorities to have discretion about how the new housing can meet the needs of their local community, rather than being constrained in primary legislation to replacing the housing they sell with homes of the same tenure. Just to help my noble friend Lady Gardner of Parkes, tenure refers to the type of housing, such as shared ownership. I know people use the word differently in different contexts.
I have just received an answer to the vacant homes point. A home is vacant when a tenancy granted by the local authority has come to an end, as defined in Clause 77.
Lord Shipley
So it is clear that a vacant home simply means that a tenancy has been given up and that, as a consequence, there is a vacancy. However, it may never be empty, because a tenant might move out and another tenant might move in the very same day. In that case, of course, it may well be that that vacant home is not a surplus home.
Baroness Williams of Trafford
When I used the term surplus, I meant surplus assets that government might seek to dispose of, and I gave the example of King’s Cross. For local authorities, vacant referred very much to housing.
Lord McKenzie of Luton
Could the Minister help me with a definition? Does succession to a tenancy create a vacancy along the way? On the death of a tenant, if someone succeeds to that tenancy, does that cause a break that would bring these issues into play?
Baroness Williams of Trafford
It would depend on the context of the succession. If the successor was a spouse, there would not be a vacancy because that spouse would be immediately, automatically entitled to take on a future lifetime tenancy. If, for example, a child wanted to take over a tenancy, it would probably be short term. The only automatic right is with a spouse.
Baroness Blackstone
May I also seek clarification? What if a tenancy comes to an end and there is a long waiting list of potential tenants with very urgent housing needs, of the sort described by the noble Lord, Lord Carrington—very large families, homeless people, people living in totally inadequate private rented housing with large numbers of small children? Is the Minister saying those groups are to be ignored, in spite of their acute housing need; that in an authority where there is not enough social housing to go round, the local authority is to be forced to sell that high-value property, which is possibly quite big and therefore suitable for some of these families with acute housing need?
Baroness Williams of Trafford
My Lords, the vacant high-value asset may not necessarily be a big property; it could be a small property, but the point is that it is of high value and vacant. The sale of these high-value vacant properties will add to the number of homes for a variety of reasons for people all over the country.
Baroness Hollis of Heigham
Does that mean that housing need in a particular local authority will be discarded to fund discounts?
Baroness Williams of Trafford
My Lords, no, it does not mean that for housing in a particular local authority because housing need is determined in a number of different ways. We are talking simply about the selling of high-value assets to provide new homes, which are in high demand, in a national context.
Lord McKenzie of Luton
Is this not in danger of running in conflict with another government policy—the bedroom tax? If part of the rationale is to encourage people in larger houses to downsize and give up the tenancy to do so, the local authority is then faced with having to sell the high-value property. How does that work?
Baroness Williams of Trafford
On the spare room subsidy, if someone is in a property that has more bedrooms than they need to occupy, my understanding of the mechanism is that a suitable property would then be found for them. The noble Lord is asking whether the property that has been vacated would then fall into the definition of a high-value asset. The honest answer is that I do not know but the probable answer is not necessarily at all—probably not—because we are talking about high-value assets across a number of bedrooms. So I do not think it would but I will take that away, think about it and get back to the noble Lord.
Lord Best (CB)
My Lords, this comes up under Amendment 68A, which we are coming to. If you have moved out, it is a transfer. We will be debating that a little later.
Baroness Williams of Trafford
I thank the noble Lord for that.
Where we have an agreement, we want local authorities to have discretion over how the new housing can meet the needs of their local communities, rather than being constrained in primary legislation to replacing the housing they sell with homes of the same tenure. We come back to the term “flexibility”. We think it is also important that local authorities are innovative and flexible in their approach to delivering more housing, so there are opportunities for them to contribute their land, make use of their HRA headroom or cross-subsidise from the development of market homes, which I mentioned to the noble Baroness.
Baroness Williams of Trafford
I am just going to make a bit of progress if that is okay by the noble Baroness. Perhaps she can come back to me at the end. Is it really urgent on the point that I have just made?
Baroness Hollis of Heigham
It is simply that the people on that waiting list want that which is being sold, which is a socially rented house. They do not want to buy—they cannot afford to—they do not necessarily want to go into a different tenure of house and they do not want to work with a developer; they want what the local authority is being forced to sell with no guarantee of a replacement.
Baroness Williams of Trafford
My Lords, I have just been over that. I want to get to the point about the borrowing headroom.
The noble Baroness also asked how a local authority with limited stock that wants to provide more for local residents does so. I mentioned in debate on the previous group that we have made available a significant amount of additional borrowing headroom, and the allocated extra borrowing will support about 3,000 new affordable homes in 2015-16 and 2016-17. Local authorities’ ability to borrow will continue to be constrained by whether borrowing is prudential, obviously, and within borrowing limits. Consideration of the former will primarily concern the affordability of the borrowing, which should not be affected by this policy.
The Government are committed to making a deduction from payments in respect of the debt supported by those properties that are taken into account in a determination. This should provide some assistance for local authorities to borrow within their existing caps, as well as utilising other options available to them to finance the building of new homes.
Amendment 68B would ensure that any agreement with a local authority outside London would require the delivery of at least one new affordable home for each property taken into account under the authority’s determination. We want the flexibility to enter into agreements that will result in as many new homes nationally as possible, but it would be better to be able to have an agreement that resulted in slightly less than one for one in some cases, rather than have no new homes built at all. Therefore, we would not want to constrain through primary legislation the flexibility to make this choice. The amendment would limit the Secretary of State’s ability to support agreements in cases that would deliver less than one new home for each one sold, removing the chance for some local authorities to have agreements to retain receipts and lead on the delivery of new housing, and devaluing the key flexibility in the legislation that receipts can be used to fund new housing or things that facilitate its provision.
The need for services and infrastructure to support new developments has been raised in your Lordships’ House, the other place and by local authorities themselves. I understand the sentiments with which the noble Lord, Lord Best, tabled Amendment 68C. If we had specified a target for the delivery of additional homes in primary legislation, we would want to consider carefully how combined authorities could help to deliver that target. However, we do not think that a target is the right approach for local authorities outside London. Instead, the provisions enable the Secretary of State to enter into an agreement with local authorities regarding the additional homes. Local authorities will have the flexibility to work collaboratively with each other, with combined authorities—as they already are doing—or with other housing providers to deliver the agreement. The key thing is that delivery should be a local decision and that the Government will be able to hold them accountable for this delivery.
Finally, I address opposition to Clause 72. Building new homes is at the heart of these proposals. We want as much flexibility as possible in what new housing will be provided and where, in order to ensure that as many new homes can be built as possible. We believe that this will be best delivered through agreements rather than putting restrictions and exemptions in the Bill.
Clause 72 enables the Secretary of State to make an agreement with a local authority to reduce the amount that it is required to pay under the determination. The local authority will use this amount to provide more housing. To avoid accusations of good money being thrown after bad, we would consider councils’ past performance and plans for delivery in deciding whether they should be able to retain some receipts. For example, if a local authority wanted to lead on a programme to build new homes using funds from the sale of vacant high-value housing, it could seek an agreement with the Secretary of State to reduce the amount that it had to pay. If that agreement was signed, the local authority would use that retained amount to fund the provision of new housing, in accordance with any terms and conditions set out in the agreement.
Lord Kerslake
My Lords, I am grateful to the Minister for her response and to noble Lords in this Chamber for their contribution to this debate.
I will present the position simply. In relation to London, the Government have recognised a housing need and have a stated intent to achieve two for one. That is, therefore, specified in the Bill. In relation to the country as a whole, the Government have also recognised that there is a housing need and stated their intent to have one-for-one replacement. That is not in the Bill, and we have, as we sit here today, no way of knowing the mechanism by which that will be delivered. The amendment here seeks to put this point about the Government’s intent beyond doubt. It puts no more prescription on local authorities outside London than the Government are seeking to put on local authorities inside London, so this is an important aim.
Baroness Williams of Trafford
I apologise for interrupting the noble Lord, but does he agree that the one-for-one replacement is in the voluntary agreements?
Lord Kerslake
There are, of course, two one-for-one policies here. There is one-for-one replacement in housing associations, which is one thing that we will need to focus on, but it is in a voluntary agreement. I am now talking about the one-for-one policy in relation to high-value sales—or higher-value sales, as I like to call them—which is in the Bill and statutory. That is what I have focused on in my amendment, not the housing association part.
The central point is that we see the need in London, and I would be the first to acknowledge the London need. Indeed, that was the subject of the London Housing Commission, whose report I published this week. There is also a big issue of need across the country. Some parts of the country do not match London but have very severe problems. For example, we have heard today that Bristol has huge housing need. The purpose of my amendment is to give the same degree of confidence about the national policy that we are clearly achieving in relation to the London policy. That does not seem an unreasonable thing to seek. It does not give the absolute confidence, which some noble Lords have sought, that you will get the same property in the same neighbourhood at the same time. Indeed, that is part and parcel of the flexibility to which other noble Lords have rightly referred. However, if there is complete flexibility, there is no confidence about the delivery of the policy, and that is where there must be some statement of intent. I do not care where this assurance is given within the Bill. I think I have put it in the right place, but the noble Lord, Lord Lansley, might have a different view. The key point is that we do not have the assurance.
I shall finish on two points. First, there are surplus resources in local authority HRAs to deliver maintenance and investment, but they have plans to use that funding. The question is how we deliver the plans that they already have and secure the delivery of this new policy that will put an additional demand on their borrowing requirements. It is perfectly possible and consistent with other government policies to say that if we are putting in additional demand, we will give the wherewithal to enable the delivery of that demand, hence the proposal in relation to capital. Secondly, in the amendment I very clearly sought to say that, in terms of tenure type, it should be the same where that is practical. We have not dictated that it has to be the same tenure type because clearly practical issues will come up in individual authorities.
This set of amendments addresses a central issue that concerns people about the practical delivery of one for one and would put the Government’s intent beyond doubt within the Bill. That said, in the normal fashion, I beg leave to withdraw the amendment.
Baroness Williams of Trafford
My Lords, I thank the noble Lords, Lord Kennedy, Lord Beecham, Lord Best, Lord Kerslake, Lord Shipley and Lord Berkeley—in his absence—and the noble Baronesses, Lady Bakewell and Lady Grender, for their amendments. I welcome this opportunity to discuss their suggestions for possible exclusions from the housing that is to be taken into account in calculating the payments required from local authorities.
The legislation already includes the ability for the Secretary of State to exclude categories of housing from the calculation through regulations. Regulations will provide flexibility to ensure that if circumstances change over time or a need for different exclusions is identified in the future, this can be easily addressed by adding to, amending or removing exclusions in the regulations. We will carefully work through the suggestions that have been put forward, considering the points noble Lords and others have raised, while balancing the need for the policy to support the delivery of right to buy to housing association tenants.
Any exclusions of types of housing that have been suggested today would reduce the amount of money that would be available to increase overall housing supply and to extend home ownership, as the Government committed to in their manifesto. Therefore, we will be considering the data that have been submitted by local authorities, which I referred to earlier, covering the 1.6 million council properties, to identify the potential impact that these possible exclusions would have on the funding available to deliver our priorities.
While no decisions have yet been made, I assure noble Lords that we will be carefully considering the views expressed in your Lordships’ House and the other place and through our engagement with local authorities and other stakeholders when making these decisions. With this in mind, I hope that noble Lords will support our ongoing engagement with local authorities in looking at possible exclusions, and will agree to withdraw or to not move their amendments.
Turning to the detail of the amendments, Amendment 66C, tabled by the noble Lords, Lord Kennedy and Lord Beecham, concerns tenant management organisations. We are collecting data and engaging widely to inform the types of housing that will be excluded from the policy, but homes managed by TMOs that are in scope of this legislation must be owned by councils. We think that councils should not keep hold of their vacant housing, the value of which could be released to fund both the building of additional homes and the extension of right to buy to housing association tenants. Excluding housing managed by TMOs would result in less funding being available for these two aims.
Lord Beecham
Does that not effectively spell the end of tenant management organisations, and are they not a form of dealing with housing which is rooted in communities and self-management?
Baroness Williams of Trafford
Would the noble Lord explain why he thinks that this would be the end of TMOs?
Lord Beecham
Because if the properties become high-value ones, on becoming vacant they will be sold. The whole concept of a tenant management group—a sort of co-operative, if you will—managing the property will not last.
Baroness Williams of Trafford
My Lords, if the property were sold, surely the TMO would exist for different types of tenures.
Lord Beecham
I cannot see how that is going to happen. As people move out, the people who move in will be buying the house: they will not be part of a tenant management organisation at all.
Baroness Williams of Trafford
My Lords, that is not the intention at all, but I am very happy to take that away and have a think about it. I would not want to spell the end of tenant management organisations, because they fulfil a vital role.
It is important to say at this stage that under the formula approach, if a local housing authority has discretion not to sell properties and does not want to sell a particular property—for example, one managed by a TMO—it should choose not to do so, provided that it makes the payment to the Secretary of State. I accept that that does not answer the noble Lord’s point. Perhaps he could just let me think about this—although it may be too late, as I cannot think very well at the moment.
Amendments 67, 67B, 68 and 69 seek to exclude various types of housing when calculating the payments required from local authorities, including newly constructed or renovated homes, homes in regeneration areas, recently improved housing and specialised housing. Amendment 68A, in the name of the noble Lord, Lord Best, would exclude dwellings that become vacant as the result of a transfer to alternative social accommodation from being taken into account. I assure noble Lords that we will look carefully at all these suggestions and consider the points that have been made today, while balancing the need for funding from the sale of high-value vacant homes to support the delivery of right to buy to housing associations.
The noble Lord, Lord Best, is concerned about two social tenants being unable to exchange properties. I can reassure him that the two tenancies do not come to an end, so a vacancy is not created. I therefore confirm that, in these circumstances, mutual exchanges will not fall into the scope of the policy. The legislation allows the Secretary of State to specify other cases where housing would not become vacant for the purposes of the chapter.
Lord Best
I am delighted to hear that from the noble Baroness. My amendment was specifically about transfers, where we did not want two vacancies to be scored when clearly there is only one, since the person moving immediately occupies another home. I think that the noble Baroness hinted earlier that transfers would probably be treated in the same way as exchanges.
Baroness Williams of Trafford
I think that the noble Lord is right—he is more alert at this hour than some of us.
I also hear the reasons behind Amendment 68E, in the name of the noble Baroness, Lady Grender. I am afraid that I cannot accept it, because it would radically change the duty for local authorities to consider selling high-value housing by preventing the duty from arising until a property has been vacant for more than six months. She talked about the policy increasing homelessness, temporary accommodation costs and the housing benefit bill. We have, as I have probably said to her on a couple of occasions now, invested more than £500 million to help local authorities prevent almost 1 million people from becoming homeless. The two-for-one replacement in London will mean that more families can be housed in the capital.
I bring us back again to the intentions outlined in the Government’s manifesto. The argument is similar to that which I spoke to last Tuesday. The legislation is framed to provide local authorities with some flexibility on what housing to sell and how to make payments to the Secretary of State. The duty is an important part of this, to ensure that the payments are focused on high-value housing, both in the calculation by government and the way they are met by local authorities.
I have listened to the noble Lords, Lord Kennedy and Lord Kerslake, and thank them for Amendment 67C, but I cannot accept it. It is right that the Secretary of State should be able to continue to take into account housing stock that has been subject to a transfer when making a determination.
My noble friend Lord Carrington of Fulham asked whether we were trying to stop any stock transfers. Local authorities are still able to transfer their stock to a private registered provider. The legislation does not stop the transfer of stock, but it is important that local authorities do not try to avoid having to sell off their high-value assets by making stock transfers. Where there is a need for more homes, we should be unlocking the value that local authorities hold in vacant high-value housing in order to fund more homes and help people into home ownership. The legislation means that the sale of vacant high-value housing will have to be one area that local authorities consider as part of their negotiation of any transfer, just as it will be one of the considerations of the Secretary of State when deciding whether to grant consent to the transfer.
The noble Lord, Lord Kerslake, and my noble friend Lord Carrington talked about perpetuity and how long the Secretary of State will continue to demand payments. We do not intend to place a restrictive provision on the length of time after a stock transfer when a determination could still be made. This will be considered on a case-by-case basis, recognising that every local area is different.
Lord Kerslake
I want to come back to this issue, although I am conscious of the hour. The Minister said that it is right that the Secretary of State should have this power to take transfers into account, but she did not say why it is right. What about the potential consequences that would flow where some very valuable transfers were prevented as a consequence of this provision? It looks like a small technical provision but it is not. It will adversely influence the future well-being of many tenants. I would be grateful for an explanation of why it should be taken into account when the clear intent is transfer with a view to improving the stock and the tenants’ quality of life.
Baroness Williams of Trafford
It is important for the Secretary of State to make the decision because he can make a judgment on why transfer is taking place.
Lord Kerslake
I accept that in the Bill it is a discretion—it says “may”—but we have no sense of knowing in what circumstances the Secretary of State might allow a transfer to go ahead without a levy and in what circumstances he would not. It is not unreasonable to want to know those circumstances. Perhaps the Minister could write to me on that point.
Baroness Williams of Trafford
I was about to say that, if I may, I will get back to the noble Lord in due course with a bit more detail on circumstances et cetera.
The noble Baroness, Lady Grender, made a very valid point about key workers. The two-for-one replacement goes to the heart of meeting the demand that is so significant in London and will bring into the market a supply of houses that could be used for people on whom we rely every day to get around London and go about our business.
I assure noble Lords that it is not our intention to prevent stock transfers. As I have said, we will consider on a case-by-case basis the implications of this chapter for these transfers.
With that in mind, I ask the noble Lord to withdraw the amendment, but, before I finish, I am looking forward immensely to our debates next week. I just draw your Lordships’ attention to the fact that yesterday, the Government published our response to the consultation on how income thresholds for Chapter 3 of Part 4, the pay-to-stay clauses, should work. The document summarises the consultation responses and sets out the Government’s way forward and, in the spirit of trying to give more information, I hope that it helps noble Lords in our debates next week.