Leasehold Reform

Lee Rowley Excerpts

Tuesday 23rd May 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

A fair housing market that works for everyone is at the heart of this Government’s central mission to level up opportunity, prosperity and pride throughout the United Kingdom.

At the end of her speech, the hon. Member for Wigan (Lisa Nandy) said that “politics is about choices.” She is absolutely right. That is why this Government are committed to ensuring safe, decent and secure homes are available to everybody, regardless of tenure, whether through a better deal for tenants in the social and private rented sectors, or through our unashamed support for home ownership, because of the security and freedom it affords to people to make their homes truly their own and to shape their futures.

This Government believe in the moral aim of people owning their own homes and in allowing them to build up capital for themselves, their families and their future. That security and freedom should allow people to make decisions about their own home, including over changes, repairs and improvements that are made or costs that are paid. In reality, the time-limited nature of residential leasehold and the sharing of control with the landlord means a significant imbalance in power. Someone who may not live in the same building or share the same priorities or motivations, as the hon. Member for Wigan outlined, may make decisions affecting someone’s home and everyday life.

[Catherine West]

What does the Minister say to leaseholders living in a cost of living crisis, with an increase in service charge that is through the roof, yet, for example, they live in a six-storey building with only one lift that is approaching its eighth week out of service? All hon. Members will have heard similar stories. There is no redress, and the Government are not taking responsibility or pushing the owners to do anything. Does the Minister agree that the situation is now out of control?

[Lee Rowley]

I do not know the detail about the particular situation that the hon. Lady outlined, but I would encourage the leaseholders to use all available avenues. There is redress, although I accept it works in some instances and not in others, but I would say to those residents: change is coming.

We have said that too often leaseholders are being charged exploitative and multiplying ground rents, in exchange for no, few or inadequate services; high charges are being levied in order to respond to simple requests; unaffordable costs to buy out the freeholder or extend the leasehold are being applied; upgrades, such as electrical charging points, to blocks are frustrated by rigid leases; or, as the hon. Member for Hornsey and Wood Green (Catherine West) indicated, urgent repairs to buildings are being neglected. That does not meet the definition of home ownership by anyone, in this Chamber or beyond.

[Several hon. Members rose—]

[Lee Rowley]

I will give way in a moment, but will make a bit of progress first. There is broad agreement across the House, and beyond, that the situation needs to change to make home ownership fairer, easier and cheaper. That is why the Government have already taken significant steps to better protect leaseholders from unreasonable costs, and why we are committed to going further and bringing forward further leasehold reforms to strengthen transparency and accountability.

[Mr Betts]

I am pleased that the Government have good intentions, but the Select Committee’s 2019 report had 52 recommendations. The Government accepted many of them completely and said they wanted to move towards accepting others and work out how that could be done. Since 2019, which was before the last general election, what have the Government actually done? Would the Minister confirm that all they have done in practice is to bring in measures to ensure that peppercorn ground rents are charged on new leasehold houses? That is the only thing they have done, out of all the recommendations they agreed to accept four years ago.

[Lee Rowley]

I am grateful to my neighbour, the hon. Member for Sheffield South East (Mr Betts). He pre-empts a part of my speech that I will come to in a moment.

The hon. Member for Wigan indicated that we have debated the subject many times in this Chamber. That is true and there will be lots of opportunities to do that again, because we have committed to make it easier and cheaper for leaseholders to extend their lease or to buy their freehold. We will bring forward legislation to ban new residential long leases on houses. While there are still issues, I am pleased to see that the market has already responded, with only 1.4% of houses in England now being built as leasehold, compared with nearly 15% previously.

[Emma Hardy]

The Minister will have heard my intervention earlier. I accept he is talking about leasehold reform, but will he elaborate on management companies, where people own their properties but are charged a management fee for communal areas? Such fees can be increased every year, there are no rules about the extent they can reach, and there is no oversight or regulation of them. Are there any plans for the Government to look at the regulation of such management companies, as some of them—not all—are exploiting people?

[Lee Rowley]

The hon. Lady makes a strong point and I will come to that in a moment. We have shared concerns about specifics, which we have all experienced as constituency MPs—Coppen Estates in North East Derbyshire, I am looking at you—and about the general principle and the broader point, which I will come to in a moment.

We have already taken action. The hon. Member for Sheffield South East has highlighted that we have ended ground rents for most new residential leases. The Leasehold Reform (Ground Rent) Act 2022 came into force last June and prevents landlords under new residential long leases from requiring a leaseholder to pay a financial ground rent. That will ensure that people buying most new leases will not face problems associated with ground rents. However, we remain concerned about the cost of ground rents and, in 2019, we asked the Competition and Markets Authority to investigate abuses in the leasehold sector. Since then, the CMA has secured commitments benefiting over 20,000 leaseholders, including commitments to remove a doubling of ground rent terms and to revert charges to original rates.

We know that there is more to do to tackle unfair practices, however. We know that many leaseholders find the process for extending their lease or buying their freehold prohibitively expensive or complex or lacking transparency. Equally, we understand that many right-to-manage applications fail on technicalities that may be attributed to an over-detailed procedure, and we are committed to improving this by making the process simpler, quicker, more flexible and more effective. That is why, as the hon. Member for Wigan said, we asked the Law Commission to look at the issue, and we are carefully considering the reports that it has since produced on enfranchisement, valuation and the right to manage.

[Mark Tami]

As I mentioned earlier, when many of these leasehold houses were sold, the purchasers were promised that they could purchase the freehold, only to find that that was not an option, the freehold was sold on immediately and freeholds were packaged up; they are financial products. I have spoken to people who get a letter every couple of months informing them that the freehold has been sold on to somebody else. This is their life, this is their property, but they feel that they do not own it because it is being bought and sold on a regular basis.

[Lee Rowley]

The right hon. Gentleman makes a strong point about the importance of reform. This is one of the reasons that we have committed to reform and I hope that we will be able to provide that in the months ahead in the remainder of this Parliament.

We are committed to tackling problems such as these at the root, so we will abolish issues such as marriage value and we will cap ground rents in enfranchisement calculations so that leaseholders who currently pay onerous ground rents do not also have to pay an onerous premium. To make this process simpler and more transparent, we will introduce an online calculator to help leaseholders to understand what they will pay to extend their lease or to buy it out. These changes should, and will, generate substantial savings for some leaseholders, particularly those with fewer than 80 years left on their lease, and also ensure that landlords are sufficiently compensated in line with their interest. These changes are therefore fair for all concerned.

[Sir Julian Lewis (New Forest East) (Con)]

I am grateful to my hon. Friend the Minister, for whom I have a great deal of time and respect, but it seems to me that he is talking about tinkering at the edges and improving a fundamentally unfair system. I would gently remind him of an exchange I had with the Secretary of State on 20 February this year, when I asked if there was going to be fundamental reform and he replied:

“We hope, in the forthcoming King’s Speech, to introduce legislation to fundamentally reform the system. Leaseholders, not just in this case but in so many other cases, are held to ransom by freeholders. We need to end this feudal form of tenure and ensure individuals have the right to enjoy their own property fully.”—[Official Report, 20 February 2023; Vol. 728, c. 3.]

Do I detect a basic shift away from this position? I earnestly hope not.

[Lee Rowley]

My right hon. Friend highlights the importance of reform in this area and the cross-party nature of the support for it. I would not read anything into my comments other than that we are committing to reform, we have said we will bring it forward and we will bring it forward. It will happen in the remainder of this Parliament.

Part of that reform will involve reforming unreasonable and excessive service charges. Many landlords and managing agents already demonstrate good practice and provide significant and relevant information to leaseholders, but too many are failing to meet that standard and failing to provide sufficient information or sufficient clarity. We recognise that existing statutory requirements do not go far enough to enable leaseholders to identify and challenge unfair costs. We will therefore act to improve this through better communication around these charges, and a clearer route to challenge or seek redress if things go wrong. That will ensure that leaseholders better understand what they are paying for and can more effectively challenge their landlord if fees are unreasonable, and make it harder for landlords to hide unreasonable or unfair charges.

[Anthony Mangnall (Totnes) (Con)]

I hope that my hon. Friend will forgive me for asking this question in this debate, but I wonder whether he might include in the legislation reforms relating to park homes. Many of the issues that he has mentioned are also faced by park homes across the country, including unfair prices and utility prices at very high levels, all of which are totally unacceptable. It is like the wild west for those people.

[Lee Rowley]

My hon. Friend makes an important point. I have hundreds of park homes in my constituency, and I know how important it has been for residents to see progress on those issues over the past decade. I was pleased, as I know my hon. Friend will have been, to see the changes brought forward in the Bill introduced by my hon. Friend the Member for Christchurch (Sir Christopher Chope) to reform pitch fees from RPI to CPI. That has been welcomed across the park homes sector and I know that the Government will continue to look at what reforms are possible for the sector.

Returning to the specific questions that have been put forward, we are committed to ensuring that when leaseholders challenge their landlord, they are not subject to unjustified legal costs and that they can claim their own legal costs from their landlord. Currently, if permitted by the lease, leaseholders may be liable to pay the legal costs of their landlord regardless of the outcome of the dispute, even if they win their case. The circumstances in which a leaseholder can claim their own legal costs from the landlord are limited. This can lead to leaseholders facing bills that are higher than the charges being challenged in the first place, which can deter leaseholders from taking their concerns to a tribunal. We will act on this and ensure that leaseholders are genuinely free to seek justice and to benefit when their case is proved.

Crucially, we also want to see more leaseholders benefiting from freehold ownership, as set out in the levelling up White Paper, and we recognise that reinvigorating commonhold has a significant part to play in this as a genuine alternative to leaseholds for flats. Some of the failings of the existing leasehold system have been all too evident in the past when seeking to ensure that those responsible for constructing dangerous buildings should be the first to pay for putting them right.

The Building Safety Act 2022, in addition to the existing enforcement powers available through the Regulatory Reform (Fire Safety) Order 2005 and the Housing Act 2004, empowers leaseholders and regulators to compel building owners and landlords to fix—and to pay to fix—their unsafe buildings through remediation orders and remediation contribution orders. The effect of the Building Safety Act is intended to be that building owners and landlords who build defective buildings, or who are associated with those responsible, pay for the remedying of all historical safety defects, both cladding and non-cladding. Landlords who are not associated with developers but can afford to pay are also unable to pass such costs on to qualifying leaseholders.

Similarly, on insurance costs, the Financial Conduct Authority’s latest report into broker insurance revealed that, on average, the premiums paid by leaseholders living in buildings with combustible cladding had tripled. That is unacceptable. Commissions on insurance policies also drive up prices, and in 70% of cases commissions are shared with property managing agents and freeholders by insurance brokers. This is an unfair burden that leaseholders should be relieved of, which is why we have committed to replacing commission pass-throughs from insurance brokers to managing agents, landlords or freeholders with more transparent fees and fair insurance handling costs. We have been clear that this unreasonable practice must end as a matter of urgency, and I regularly meet the relevant trade associations to make progress on this matter.

We have also made progress with a number of banks in recent months on ensuring that the market in leasehold properties affected by cladding starts to become more voluminous, by separating the building safety issues from people’s ability to live their lives.

Whether we are talking about safety or the security and freedom that people rightly expect when they buy a home, this Government are on the side of leaseholders. We are protecting and empowering them to challenge unreasonable charges, making it easier and cheaper for them to extend their lease or buy their freehold, and boosting commonhold as a flexible alternative to take the housing market into the 21st century. Millions will benefit from these reforms, not just in the thousands of pounds saved but in knowing that the homes they have worked so hard to secure are truly their own.

[Several hon. Members rose—]

Non-Domestic Rating Bill

Lee Rowley Excerpts

Committee of the whole House & 3rd reading
Monday 22nd May 2023 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

I rise to speak to amendments 1, 2, 3 and 20, as well as new clauses 1 and 2, tabled in my name. I note the excellent speech by the hon. Member for Waveney (Peter Aldous), who tabled amendments with very similar objectives to my own. This Bill is a disappointment to all businesses who are struggling through tough financial conditions. Not only are prices going up for every single purchase that they make, but many small businesses were forced to lock into gas and electricity contracts at astronomical rates last year and are no longer receiving any meaningful support with those energy costs. They may also be struggling with interest rate rises on their borrowings following the period of economic chaos caused by the Government last autumn.

This Government committed to reviewing the system of business rates fundamentally in their 2019 manifesto, but this Bill offers only peripheral changes to an outdated system that does not work for a modern economy. The Bill offers to change the timescale of revaluations from every five years to every three years. This is a welcome reduction, but Liberal Democrats believe that it does not go far enough. The reality for businesses is that a three-year gap between revaluations means that they will continue to pay rates that are far from reflective of the real economic conditions they are operating in. Amendments 1, 2 and 3 would require non-domestic rating lists to be compiled every year and make every year from now on a relevant period for transitional provision under the Local Government Finance Act 1988. Annual revaluations are possible. We only need to look to the Netherlands, where they have been taking place since 1995. There, rateable values are allowed to move with the local economy. This means the tax that businesses are required to pay better reflects the conditions that they face.

I also want to spend a little time on amendment 20, tabled in my name. It is estimated that as a result of the Bill as it stands, 700,000 small businesses who currently pay no business rates at all will need to submit annual reports to the Valuation Office Agency, even when there has been no change to the premises they occupy. These small businesses, like many in North Shropshire, are already plagued by seemingly endless monthly and quarterly Office for National Statistics returns, along with their ongoing tax and financial reporting requirements.

The Bill adds yet another administrative hoop for these businesses to jump through and threatens hefty penalties if forms are completed incorrectly. This piles unnecessary pressure on to small businesses and it will not raise any more tax for public services. These businesses already receive a notification to inform the VOA if there is a material change in their premises, so there is nothing to be gained from this element of the Bill. Amendment 20 attempts to deal with this problem by removing the requirement for annual reporting of no change for those businesses in receipt of small business rate relief. I urge the Minister to support amendment 20, which I intend to push to a vote, and to cut unnecessary red tape for the small businesses we desperately need to help, in order to drive economic growth and breathe new life into the high streets of our historic market towns.

I also wish to speak to new clause 1, tabled in my name. It seems very one-sided to impose punitive fines on businesses for failing to report updates to the VOA on time, without any reciprocal expectations of that agency. As I outlined on Second Reading, dealing with the VOA over changes to a premises can be a protracted affair, and all the time that that is going on, businesses face uncertainty about their rates liability and, critically, cannot plan their cash flow. New clause 1 would require the VOA to report to the Secretary of State on its performance in detail at least once a year. This report should correspond to targets to be set by the Secretary of State. The new clause also calls for the findings of these reports to be laid before Parliament. I have suggested targets, rather than legally binding levels of service, to reflect the fact that no two premises are the same and that updates can be complex and can be challenged, but those targets would at least set an expectation of performance and ensure some accountability for the VOA.

Lastly, I wish to draw attention to new clause 2. I think there is general agreement on both sides of the Committee that we want to see our high streets and market towns thrive. This is especially true in places such as the five historic towns in my North Shropshire constituency, where the local high street is not just a practical place to go to but a social lifeline for many residents. Those high street shops are in competition with online retailers whose warehouse premises have a much lower rateable value per metre squared, putting the high street at a disadvantage. This was confirmed in the Treasury Committee’s “Impact of business rates on business” report in 2019.

Disappointingly, however, the Bill does not take this discrepancy into consideration. Instead, the Government will continue to drain physical retailers through rates that do not reflect the challenges they are already facing, leaving many at a tipping point and struggling to compete on an unfair playing field. New clause 2 would require a review of the impact of non-domestic rateable values on competition in different parts of the retail sector, so that Members could understand the true scale of the issue and inform policy accordingly. This review should be commissioned within six weeks after the date this Act is passed. Overall, I urge Ministers to support these amendments and new clauses in order to improve the Bill, which is just not ambitious enough in fundamentally reforming an out-of-date tax system.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

I am grateful to all colleagues across the Committee for their contributions today. I think all of us spoke on the Bill’s Second Reading, and we have rehearsed the arguments on a number of these points already. It is important to reiterate from the Government Front Bench that this Bill delivers significant reforms for the business rate system. It increases the frequency of revaluations, which I think has been generally welcomed across the Committee today. It also modernises the administration of the tax and it provides new reliefs to support things such as property improvements. Taken along with the nearly £14 billion-worth of taxpayer subsidy for businesses this year, it helps to manage the tax burden amid the ongoing pressures that the hon. Member for North Shropshire (Helen Morgan) mentioned.

I will now turn to the contributions that hon. Members and hon. Friends have made today. My hon. Friend the Member for Waveney (Peter Aldous) made an incredibly constructive set of comments, and I completely understand the sentiments behind many of the amendments he has tabled. He set a challenge at the outset of his speech, saying that he is looking to move towards annual valuations, the removal of complications and the adoption of digitalisation. We are making progress in two of those three areas, which I hope is not bad, and he has indicated that, overall, this is a step in the right direction. We are moving from five-yearly valuations—in reality, they have happened every seven or eight years in some instances in recent years, for good reason—to three-yearly valuations. We are moving towards the collection of further digital data, and we are continuing to support businesses, where we can, through the reliefs we have put in place.

--- Later in debate ---

[Helen Morgan]

rose—

[Lee Rowley]

The hon. Lady is going to tell me exactly where she would find several hundred billion pounds to fill her black hole.

[Helen Morgan]

Amendment 20 is about cutting red tape for small businesses. Does the Minister agree that he is talking about policy objectives that are not relevant to the Bill?

[Lee Rowley]

That tells us everything we need to know about the Liberal Democrats. They want to talk about only this Bill, ignoring every other policy. They look one way when talking to one part of the country, and the other way when talking to the other part of the country. That shows the Liberal Democrats’ lack of seriousness in understanding how taxation actually works, in understanding how to run a modern, dynamic market economy and in understanding how we need to pay our way to make sure our economy is successful in the long term. It is for those reasons that we oppose amendment 20.

[Peter Aldous]

The points I made were genuine. I think this Bill needs to be changed, and I hope the Government will have an open mind in considering whether to do so in the other place. We may well review this situation again.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 1 ordered to stand part of the Bill.

Clauses 2 to 12 ordered to stand part of the Bill.

Clause 13

Requirements for ratepayers etc to provide information

Amendment proposed: 20, on page 23, line 35, at end insert—

“4LA Paragraphs 4K and 4L do not apply if P is eligible for small business rate relief (for example, because the rateable value of the hereditament for which P is or would be a ratepayer is less than £15,000).”—(Helen Morgan.)

This amendment would exempt businesses in receipt of Small Business Rate Relief Exemption from annual reporting if there is no change to report.

Question put, That the amendment be made.

--- Later in debate ---

[Lee Rowley]

I beg to move, That the Bill be now read the Third time.

It has been a pleasure to support the progress of this Bill through the House. I do not seek to detain the House for long, but let me say briefly that the Bill offers some of the most substantial reform to the business rates system since its inception in 1990 and meets our commitment to reform and reduce the burden of the tax on business. By moving to more frequent revaluations from 2026, we are delivering on a key ask of business. We have been up-front with the House and with businesses that meeting this commitment is a major ask, which is why we have made some changes to the way ratepayers interact with the Valuation Office Agency. That principle was accepted by respondents to the review that predated this legislation.

Our approach has been to listen and to take appropriate action. I have already mentioned the evidence-based approach that we adopted in that review and the close dialogue that we foster with our partners in business and local government. We are also taking action to reform transitional relief, which was the No. 1 one ask from stakeholders on business rates ahead of the 2023 revaluation. That is a major commitment, a major step to supporting fairness and a major improvement in the credibility of our business rates system.

Finally, we are happy to have agreed to the Welsh Government’s request for various measures to be extended to Wales, and also to be supporting Northern Ireland with a data sharing measure.

I conclude by expressing my thanks to all Members for their contributions on Second Reading and in today’s debates. Although we have not agreed on everything, this has been a useful and constructive session. I am grateful to the Clerks of the House for supporting the smooth running of the Bill and to all of the teams across the Department and those in the Treasury, His Majesty’s Revenue and Customs and the Valuation Office Agency for their help in preparing the Bill. I look forward to watching the Bill’s progress in the other place, and I commend it to the House.

Local Government Finance

Lee Rowley Excerpts

Tuesday 16th May 2023 Written Statements

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

Following the local government finance settlement statement made on 6 February 2023,1 am today announcing a further £3 million in grant funding for 2023-24 to support 15 local authorities severely impacted by the increase in levies from internal drainage boards. This increase is being driven by the unprecedented rise in energy costs that impact particularly energy-intensive services including internal drainage boards. As this has been an exceptional year for the rise in energy costs, this will be an exceptional one-off payment to help ease this additional financial burden on councils. The Government will not provide additional grant to local authorities for these levies on an ongoing basis. Councils and internal drainage boards should continue to take action to deliver efficient services and good value for money for the public.

The 15 local authorities in scope are those whose internal drainage board levies account for over 3% of their average core spending power over five years. The allocations listed in the table below are based on 2023-24 internal drainage board levy increases.

Levelling Up, Housing and Communities

Lee Rowley Excerpts

Wednesday 26th April 2023 Ministerial Corrections

The following is an extract from the Westminster Hall debate on Parish and Town Council Precepts on 18 April 2023:

[Lee Rowley]

My hon. Friend raises points about powers and in particular the disclosure of information. He references the local government transparency code of 2015. The code is a statutory instrument that contains two elements: a mandatory section and a section of recommendations. The requirement to publish invoices over £500 and to publish procurement card transactions is mandatory. Where that is not done, or where there is a concern that it is not done, we recommend in the first instance that the authority is contacted, following their complaints procedure, and then the monitoring officer of the principal authority is contacted.

[Official Report, 18 April 2023, Vol. 731, c. 92WH.]

Letter of correction from the Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for North East Derbyshire (Lee Rowley):

An error has been identified in the response given to my hon. Friend the Member for Morecambe and Lunesdale (David Morris) in the debate on Parish and Town Council Precepts.

The correct response should have been:

[Lee Rowley]

My hon. Friend raises points about powers and in particular the disclosure of information. He references the local government transparency code of 2015. The code is a statutory instrument that contains two elements: a mandatory section and a section of recommendations. The requirement to publish invoices over £500 and to publish procurement card transactions is mandatory for parish councils with sufficient turnover. Where that is not done, or where there is a concern about compliance, we recommend in the first instance that the authority is contacted, following their complaints procedure, and then the monitoring officer of the principal authority is contacted.

Affordable Homes Programme

Lee Rowley Excerpts

Tuesday 25th April 2023 Westminster Hall

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank all hon. and right hon. Members for their contributions and thank the hon. Member for Slough (Mr Dhesi) for instigating the debate. We may have disagreements about the methods by which we ensure that people can enjoy the fruits of home ownership and have a roof over their heads, but I think we would all, collectively, irrespective of what side we are on in this Chamber, agree that it is absolutely vital to have a housing sector that supports those who need it and provides the platform for people to be able to aspire to move into home ownership. That has been the case for the past century, and it has been such a success within this country.

I start by acknowledging the underlining point made by a number of hon. and right hon. Members, which is that there are challenges at the moment, including those that have grown in the immediate term, such as inflation, the cost of construction and materials and labour challenges, which all create issues in ensuring that we can make progress on our shared objectives. If we are truthful, that is also set within the context—I am not seeking to make a particularly political point, as it has developed under successive Governments of all colours over the past 30 or 40 years—of the number of houses that are built in this country and, flowing from that, the number of people who can have access to them, and the number of people who can enjoy home ownership in general. I think we have made progress on that as a Government, but I know there is a keenness to go further in the years ahead.

The Government support ensuring that people have a place to live, a place to thrive, a place to grow and a place to bring up families, which, in many instances, will be through affordable housing and social rent, but we also inherently believe in the importance of home ownership as a moral end in itself, providing the ability for people to make choices, grow capital and pass assets on to their family over their lives. The comments in today’s debate have underscored the need for more homes of all tenures, whether to rent, to buy or to part buy, on the way, hopefully, to fully buying in time.

On the specifics of the affordable homes programme, the whole point of the programme, which has nearly £12 billion of taxpayer subsidy—we are taking money from people that they would otherwise be able to spend themselves—is that we recognise the importance of some of the points made in the debate. Launched in 2020, that nearly £12 billion support—£11.5 billion—represents a significant taxpayer subsidy for affordable housing and a clear commitment to delivering tens of thousands of homes for sale and rent throughout the country.

Social rent has been raised by a number of colleagues, and I will come to their specific points in the moment. We brought social rented homes into the scope of the affordable homes programme in 2018 and we affirmed our commitment to increasing the supply of social rented homes in the levelling-up White Paper, which was published last year, as well as to improving the quality of housing across the board, in both the private and rental sector. I will come on to that point in a moment, when I respond to the hon. Member for Mitcham and Morden (Siobhain McDonagh). We have changed the parameters for the affordable homes programme to support that commitment, which enables further increases in the share of social rental homes that we plan to deliver.

Furthermore, the affordable homes programme is committed to funding a mix of tenures, enabling developers to deliver mixed communities that will ensure that people can buy, part buy and rent where they need to. That is why we have kept a commitment to delivering homes for affordable rent, where rent is typically capped at 80% of the prevailing rate. Yet it is home ownership that we want people truly to benefit from, and we want people to benefit from it as much as is possible. We understand the difference that an increased sense of security can make to all aspects of someone’s life and the lives of their families. That is why home ownership is a fundamental part of the affordable homes programme and why there is a significant element of homes for shared ownership, which can help people staircase up.

[Dame Meg Hillier]

The Minister said some warm words there about the need for social housing. In response to the Public Accounts Committee report, the Government indicated that local authorities would have more say over the mix of tenure in their area. In areas like mine, where the real need is for social rented housing, that requires more Government grant compared with areas where low-cost home ownership is genuinely an option. In Hackney, with the price as it is, home ownership will be very difficult to achieve. Can he flesh out how local authorities can deliver what they know is needed in their area and how Government grant will follow those decisions?

[Lee Rowley]

I am grateful to the hon. Lady for raising that point. She is an assiduous follower of this issue. I know of all the fantastic work that she and her colleagues on the Public Accounts Committee do on this area and elsewhere. I fear I might not be able to give her an absolute answer, but I will try to provide as much information as I can. There is obviously a challenge, broader than the specifics of this debate, about the amount of money that the Government have; that is not particularly newsworthy. If I may make a tiny partisan point: the Labour party, if it ever gets into Government, will have to make more choices than Opposition spokesmen indicate when they respond to such debates. There will always be a challenge around how we prioritise funding, and what the trade-offs are to do that. The commitment from the Government is here, with the £12 billion contribution that has already been indicated for allocation.

When we come forward with further information about the affordable homes programme 2021-26, I hope we will be able to give greater clarity for those authorities that seek a particular mix of housing and to expand the number of affordable homes of whichever tenure. I also hope that some of the changes coming through in the Levelling-up and Regeneration Bill will take effect, although that needs to complete its progress in the other place. We will have to see what the other place does to that Bill, which I hope will give local councils some ability to flex their approach in the area of housing.

[Matthew Pennycook]

Will the Minister give way?

[Lee Rowley]

I want to make progress.

[Matthew Pennycook]

On that specific point?

[Lee Rowley]

Go on then—the hon. Gentleman has convinced me.

[Matthew Pennycook]

The Minister is right that, when it comes to designing an affordable homes programme, choices have to be made and trade-offs confronted, but does it not trouble him that, despite the fact that 50% of AHP funding under the current programme is allocated to low-cost home ownership, his own Department’s figures make it clear that grant funding under the last year of the previous Labour Government still delivered twice the number of low-cost home ownership units than the Government managed last year?

[Lee Rowley]

Before I answer that question, I hope the Chair will allow me a minute or two more than 10 minutes, given that we have a little bit of time, in order to answer these interventions.

[Mr Philip Hollobone (in the Chair)]

Order. It is just a guideline, not a rule. The Minister can speak all the way until 3.57 pm, if he wishes.

[Lee Rowley]

I will not detain colleagues to that extent, but I am grateful for the confirmation that I can continue. The hon. Member for Greenwich and Woolwich (Matthew Pennycook) is keen to make a comparison. The fundamental thing that we are trying to do at the moment is weigh up a series of very challenging economic circumstances, recognising the context of housing supply, which has been a challenge for the entirety of my life. We recognise that we have to make progress for the very reasons that right hon. and hon. Members have outlined over the course of the debate. It is so important to do so, given that housing supply affects and impacts the lives of real people.

Let me comment on individual contributions. The hon. Member for Slough, opening the debate, emphasised the importance of the property-owning democracy, which I wholeheartedly agree with. I hope we can make progress on that and also address some points made by other hon. Members. He also said that there should be greater clarity on the affordable housing programme going forward. Although I am not able to give that in today’s debate, we have said that we will come back in the spring with further clarity about what is happening; there is not a huge amount of spring left, so I hope it will not be too much longer before my housing colleagues in the Department will do so. I anticipate the Department being able to provide further information to the hon. Member and others in the coming weeks.

The hon. Member for Coventry North West (Taiwo Owatemi) raised a number of points about the inherent challenges in the housing market and of trade-off. During my brief tenure as the Housing Minister back in the autumn, we had a debate in this very place about some of the issues, and she spoke then with regard to Coventry specifically. I cannot talk about Coventry individually, but I will put on record, if hon. Members allow me, the progress that has been made in the past 13 years. I realise that many colleagues will not necessarily want to point to that, but it is important for balance that we do.

Two million homes have been built in this country since 2010, and almost 1 million people—over 800,000—have been helped into ownership through schemes such as help to buy. Some 630,000 new affordable homes have been built. Last year, the registered supply of new homes increased over the previous year by approximately 10%, and I believe that the last five years have seen some of the highest rates of property building for 30 years.

A number of colleagues raised home ownership. Crucially, after a pretty linear fall from the mid-2000s under Governments of all parties, home ownership has started to increase again for the first time in a number of years. The increase is incremental—the rate is up from 62.5% in 2016-17 to 64.3% in 2021-22—but it is a movement back in the direction of empowering people to own their own properties and obtain all the consequent benefits.

[Dame Meg Hillier]

The Minister talks about home ownership increasing, but that incremental increase can hardly be seen as a victory. His is the party that introduced right to buy to increase home ownership. I wonder what the percentage is for anyone under the age of 35. Will he acknowledge that the Government have totally failed that generation in this respect?

[Lee Rowley]

The hon. Lady is absolutely right that it is not enough, but the whole point of trying to build more properties and of using programmes such as the affordable housing programme to bridge, where that is necessary, into home ownership through rent and part ownership is to boost those numbers. My point is not that there are no challenges—I acknowledged such challenges at the very top of my speech. It is to try to insert balance, if only into the record: some progress has been made over the last 13 years. A substantial number of properties have been built over that time—for home ownership, for rent and in the affordable sector—and most importantly, after a relatively clear-cut decline under Governments of all parties, the decline seems to have been arrested. There is a long way to go and there is absolutely the need for growth. I want everybody who wants to own their own home to have the opportunity to do so, but I hope that this is at least an indicator that we are moving, to an extent, in the right direction.

I have the greatest respect for the hon. Member for Weaver Vale (Mike Amesbury), and would never dream of reading my phone when he is speaking. I was specifically texting—this is both the benefit and the tyranny of having mobile devices in a debate—about the point he had raised. I regret to tell him that I have been unable to get an answer in the 40 minutes since he spoke, but I will ask the Department to write to him. I will be honest with him: I do not know whether the Department has purview here, and I do not know any of the details of the problem that he highlighted. It is always a challenge for local communities when developers are unable to complete the properties that they have indicated they will. I know that causes issues. I have a similar one in the village of Tupton in North East Derbyshire, where the developer unfortunately went out of business and the site is now mothballed. North East Derbyshire District Council is working hard to try to move that issue on. I will endeavour to write to the hon. Member for Weaver Vale either way, and will see whether the Department can provide any advice or information about the point that he raised; I am grateful for his doing so.

The hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) raised a number of incredibly important and detailed points, to which I will ask the Department and the Minister responsible to respond in detail. Part of the answer to some of her questions will, I hope, be answered by the further details that come forward in the next stage of the affordable housing programme, but I will ask for a letter to be provided to the hon. Lady with more detail about the specific questions that she highlighted.

The hon. Member for Mitcham and Morden made an extremely powerful intervention about the challenges of temporary accommodation—an issue that we all are aware of. We all want standards, quality and conditions to improve. As a former councillor in central London, albeit a number of years ago, I am under no illusions about some of the challenges of temporary accommodation. The Secretary of State for Levelling Up, Housing and Communities, my right hon. Friend the Member for Surrey Heath (Michael Gove), has been clear that improvements are needed in this area and has indicated that further legislation will be forthcoming. I am grateful to the hon. Member for Mitcham and Morden for highlighting her concerns, and I hope the Department can make progress in the coming months and years.

The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) made a very important point about the challenges of access to labour, particularly in rural areas due to geography and topography and the like. I am sorry to hear about the issues his constituents are experiencing. While housing is a devolved matter, it is important, and I am grateful that he has put on record those issues and the work he is doing to address them. He will be aware that, at least from an England perspective, we are seeking to legislate as part of the Levelling-up and Regeneration Bill in order to offer councils the opportunity—which they do not have to take up; some will choose to, some will not—to vary council tax for second homes. That will hopefully put an additional tool in the arsenal of local authorities to respond, in England, to the local challenges he has raised.

The spokesperson for the Opposition, the hon. Member for Greenwich and Woolwich, raised an important point about capacity in local planning authorities, which is an issue that the Housing Minister, my hon. Friend the Member for Redditch (Rachel Maclean), and I are both involved in. Within planning, nationally significant infrastructure projects fall under my aegis. That is different from the debate we are having today, but there are very live conversations within the NSIPs and major infrastructure realms. I know from my colleague the Housing Minister that it is the same with regard to capacity in local planning authorities and within the appeals process, where a number of applications end up in their final stages.

The hon. Member for Greenwich and Woolwich raised a number of important points about green homes. We need to make progress on multiple different imperatives and initiatives. The part L uplift, which we brought in in the summer of 2021, constituted a 30% increase and improvement in standards. That is in place now and has been for almost a year. The transition period for the part L uplift ends shortly, meaning that all houses built from now on will be 30% more efficient than previously. That is a massive increase compared to a number of years ago. However, there is a trade-off here, and we are trying to work through the issues and make progress in all aspects.

The Labour party has spent much of this debate—reasonably, in my view—saying that we need more houses, and that they need to be affordable to own and rent. We agree, which is why we are trying to make progress in this area. We also need to make progress on the environmental agenda, but those things must be brought into balance. Every single time an hon. Member stands up in this place and says, “We just need this one thing added in”, we need to understand that there is cost involved. That is where we have to make considerations. The part L uplift is a great example: we are trying to make progress environmentally, while also trying to answer the question reasonably posed by hon. Members across this place as to how we increase housing supply in general. We hope we are striking the right balance.

[Valerie Vaz]

The Minister is doing a great job of expanding his speech. There is absolutely no cost to ensuring that there is an obligation for every new home built to have solar panels. Why does the Minister not look at that? My hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook), Labour’s Front-Bench spokesperson, has said that all these new houses have to be retrofitted. Surely the Minister can consider what can be done with new houses in terms of the environmental factors?

[Lee Rowley]

I understand the point that the right hon. Lady is making, but there is a cost to mandating solar panels on new properties: the cost that will be paid for the initial transaction. If right hon. and hon. Members want to see supply boosted, we have to accept that we have to set a balance; we are trying to do that by saying both that it is important to make progress with regard to the environmental imperatives that have been rightly highlighted and—to answer the exam question—to get the kind of supply that everybody in this debate wants to see.

I gently caution hon. Members not to be too prescriptive regarding the technology we use. Although solar panels will be appropriate in many instances—I would guess the majority of instances, as a non-expert and a non-surveyor—they will not be the solution to reducing the carbon footprint of every single new property built. We should all collectively accept that solar panels will not be a useful or effective way to spend money in that cohort—in situations where, for whatever reason, including the wrong aspect, the wrong part of the country or the wrong geography. We should seek not to impose a requirement in that regard but instead to say, “If you have that amount of money within the system to be able to spend on making that building greener, the Government will not be prescriptive that you have to do something that isn’t necessarily going to be effective, but we will encourage you to use that money to make it effective, be it in a different form of technology or doing it in a different way.”

[Mr Dhesi]

I thank the Minister for giving way and I think he will have heard the points about quality, size and environmental standards, and why it is important for there to be a focus on them; I appreciate his accepting that. Will he also confirm for us all, and for the record, when the revisions to the 2021 plan will be published?

[Lee Rowley]

We expect to be able to say more on the affordable housing point in the coming weeks ahead—in spring. I hope that answers his question. I will conclude—

[Mike Amesbury]

rose—

[Lee Rowley]

I will first give way to the hon. Gentleman.

[Mike Amesbury]

I will be brief. I recently addressed chief executives of housing associations from across the north, and the one big concern was around section 106 and the replacement—the infrastructure levy. I think that about 47% of affordable homes are built that way at the moment. What reassurances can the Minister give to the sector that that will be the case, and even better? The associations’ final ask was around section 21. When can we see the announcement on no-fault evictions—the pledge that has been made by the Government over and over again?

[Lee Rowley]

I am grateful to the hon. Gentleman for that intervention. On the final point, my right hon. Friend the Secretary of State for Levelling Up, Housing and Communities has been clear in the other Chamber that we intend to bring forward more information about the rental sector relatively soon. I hope that answers his that question.

Obviously, the key underlying way in which we can answer the hon. Gentleman’s question about the infrastructure levy is to get the Levelling Up and Regeneration Bill through. It depends what the other place does to that Bill. There are some quite substantial provisions, which I believe the hon. Member for Greenwich and Woolwich went through in Committee a number of months ago; I had the opportunity to contribute to that process very briefly. We will see what the other place does to that Bill. No doubt it will come back here. Once we get the Levelling Up and Regeneration Bill through, we will be able to make progress on moving away from section 106 and towards an infrastructure levy, which I hope will capture more of what we seek to do.

To close, I thank the hon. Member for Slough again for requesting and instigating this debate. It is absolutely the case that everybody here feels very strongly—rightly—about the need to make further progress on housing in the years ahead, for precisely the reasons that have been articulated in this debate today. It is so important for our constituents, for transforming lives and for supporting the most vulnerable. We have all heard today about some of the challenges, but I hope that I have been able to rebalance things, at least to some extent, by highlighting the opportunities and some of the progress that has been made. Housing, affordable housing and home ownership are vital to our communities all across the country, from North East Derbyshire, where I am from, to the constituencies of right hon. and hon. Members who have contributed to this debate today. We must make progress for precisely the reasons that have been articulated in this debate. I hope we can continue to do that in the months and years ahead.

City Centre Security Measures and Access for Disabled People

Lee Rowley Excerpts

Tuesday 25th April 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

I start by conveying my sincere appreciation to the hon. Member for York Central (Rachael Maskell) for calling the debate and for speaking so powerfully on behalf of her constituents, especially those who have been adversely affected by the installation of bollards, the removal of blue badge parking in York city centre and the many other issues she highlighted.

I thank the hon. Members for Battersea (Marsha De Cordova), for City of Chester (Samantha Dixon) and for Strangford (Jim Shannon), and my hon. Friend the Member for Woking (Mr Lord), for their contributions to the debate. I particularly thank my hon. Friend the Member for York Outer (Julian Sturdy), who is no longer in his place, for his contribution. I know he has similarly strong views to those articulated by the hon. Member for York Central. Both the hon. Members who represent the city of York are committed champions of the residents and businesses that call York home, and I know they share our ambition for that fine city, in the heart of the northern powerhouse, to continue to grow and flourish in the long term.

York attracts over 8 million tourists from home and abroad every year. We know the visitor economy is vital for the city, but it also causes the types of questions, challenges, trade-offs and considerations that the hon. Lady so eloquently espoused in her speech. An appropriate balance clearly needs to be struck, so in my response I want to provide clarity about the Government’s role and responsibility, while outlining some of the work around accessibility for disabled residents in York, and indeed in all our towns and cities.

First, I will talk about the UK shared prosperity funding, from which some money has been contributed to the work that has been discussed. I will then talk about accessibility and finally about blue badge parking.

As the hon. Lady will know, appreciate and accept, empowering places to identify and build on their own strengths and needs is a core tenet of the levelling-up agenda, which is why the UK shared prosperity fund is giving York £5 million. The hon. Lady is absolutely right that improving infrastructure costs money and takes time. The fund will help neighbourhoods and create more high-skilled, high-wage jobs of the future.

As the hon. Lady outlined, clear concerns have been expressed about the changes that have made to some of the projects, including the perceived heavy handed use of bollards that restrict accessibility for people in wheelchairs. In rolling out the UK shared prosperity fund, we have been clear that we want to give local areas the maximum amount of local discretion. The essence of devolution is affording local areas the freedom to forge their own path, but with rights come responsibilities.

The hon. Lady has expounded the concerns that she and many others have about the course of action that has been outlined so far by City of York Council. The Government have always been unequivocal in saying that our high streets must be open and accessible to everyone. Local authorities have a duty, under section 122 of the Road Traffic Regulation Act 1984, to exercise their functions in securing the

“expeditious, convenient and safe movement of traffic.”

Although councils are ultimately free to make their own decisions about the streets under their care, they need to take into account the relevant legislation. They are also responsible for ensuring that their actions are within the law. They are accountable to local people for their decisions, and indeed for their performance. There is no specific requirement for local authorities to use bollards; it is for each council to decide the most appropriate way to resolve these challenges.

Blue badge parking is a similar case. I know that the hon. Lady has been a champion of reversing the ban on blue badge parking since it was introduced in the city’s pedestrian zones as part of the measures introduced in 2021. I appreciate that the resident-led campaign has won the support of others, including Dame Judi Dench, as the hon. Lady outlined in her conclusion.

The blue badge scheme is a lifeline for many disabled people. It helps approximately 2.5 million people in England to remain independent, while preventing social isolation. The Department for Transport has published several documents and some non-statutory guidance for councils on how the scheme should operate. One such document, as the hon. Lady outlined, is “Inclusive Mobility: A Guide to Best Practice on Access to Pedestrian and Transport Infrastructure”, which sets out the provision that should be made for parking spaces. It states:

“Creating and maintaining an accessible public realm is crucial for ensuring that disabled people are not excluded from playing a full role in society… Inclusive design requires that the needs of all disabled people are considered from the outset of any transport and pedestrian infrastructure”.

Personally, I would strongly encourage the city of York to think carefully about reconciling the understandable challenges with which it has to grapple, which we all recognise—the hon. Lady was careful to articulate and highlight them in her speech—with an approach that meets the rights of disabled people in the way she outlined. There is always a balance to be struck between protecting the public and not unduly imposing on the rights and freedoms of disabled residents, blue badge holders or the wider public who need to park in the city for essential reasons.

[Marsha De Cordova]

In my opinion, City of York Council is clearly breaching the law. It does not even seem to be complying with its responsibilities under the public sector equality duty. Is there scope for the Government to intervene to instruct or encourage the council to reverse the ban?

[Lee Rowley]

I am grateful for that question, which goes back to my point that ultimately central Government have to recognise, if we believe in devolution, that local councils must have the aegis and the space to make decisions. However, councils must make those decisions in accordance with the law, must have regard to regulation, and must think carefully about the impact and implications of their decisions in the way the hon. Member for York Central outlined. The fact that the subject had to be raised in this place tonight is indicative of the level of concern that has been expressed on both sides of the House about the challenges facing the city of York.

I have to respect the devolution settlement. I have to recognise that, ultimately, it is right that decisions are made locally. Local government does fantastic things across the country on a daily basis, and we should congratulate it and thank it for doing so. Nevertheless, I hope that the city of York is listening tonight, that it has heard the concerns and comments that have been articulated, and that it will consider very carefully how to approach the matter in future.

Question put and agreed to.

Parish and Town Council Precepts

Lee Rowley Excerpts

Tuesday 18th April 2023 Westminster Hall

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

It is a pleasure to serve under your chairmanship, Mr Hosie. I am grateful to my hon. Friend the Member for Morecambe and Lunesdale (David Morris) for raising this issue and organising the debate. This is an important subject. Those of us who have parish and town councils in our patches, or those of us, like me, who have had the opportunity to work with parish and town councils in a ministerial role, know how important they are for local communities. I know what a difference they can make and how much work goes into ensuring that parish and town councils and councillors make a difference in, and improve, their local areas. There are over 9,000 councils in the country, and I am grateful for the work they do, including in my own patch of North East Derbyshire.

This is also an important subject because it is important for my hon. Friend who secured this debate. He is a champion for Morecambe. We hear him in the Chamber week in, week out, being that extremely strong voice for his constituency. I congratulate him on his recent successes, which he outlined—in particular, Eden Project North, which will be transformative for the area that he has the privilege to represent. In the time that I have, let me briefly go through the legal position that town and parish councils operate under. I will then comment on the points my hon. Friend has made.

My hon. Friend speaks passionately and clearly about the challenge of a council tax increase driven by the increase in a precept from Morecambe Town Council. As he is aware, council tax is set by local authorities—in this instance that includes a town council—and they decide what level of council tax they need to raise. The Government set referendum principles for some, but not all, councils each year. Where councils set excessive increases, they have to go to referendum. Increases are usually within the bounds of around 5% for other council tiers.

We have not traditionally applied referendum principles to town and parish councils, but we have said very clearly that all tiers of council should exercise restraint when they are setting council tax increases. This was made clear in the consultation for the local government finance settlement for 2023 to 2024. We stated that the Government continuing to not set referendum principles was contingent on town and parish councils taking all available steps to mitigate the need for council tax increases and the Government seeing clear evidence of restraint. It is the case that the thousands of town and parish councils will face different challenges and perform different functions, but it is also the case—I want it to be clearly noted in this debate—that we expect town and parish councils to be restrained in their council tax increases.

My hon. Friend raises points about powers and in particular the disclosure of information. He references the local government transparency code of 2015. The code is a statutory instrument that contains two elements: a mandatory section and a section of recommendations. The requirement to publish invoices over £500 and to publish procurement card transactions is mandatory. Where that is not done, or where there is a concern that it is not done, we recommend in the first instance that the authority is contacted, following their complaints procedure, and then the monitoring officer of the principal authority is contacted. Finally, there is the opportunity to go to the local government ombudsman if there remain concerns.

A number of points were raised about the approach of the town council to its precept raising and decisions that it is making about how to utilise that precept. Ultimately, because there needs to be enough flexibility in the system, decisions about how precepts are set, how much they rise by and how they are applied is mainly down to the town or parish council itself. However, it is important that restraint is shown. My hon. Friend has made important points, and I agree, having had a superficial look at the budget—which he has kindly provided—that there are a number of relatively odd things happening here. It is a question of fact, which all residents of Morecambe will be able to see by accessing the documentation, that there are significant increases in the amount of spending expected here and the amount of precept being raised. There is an opportunity to comment on that at the ballot box in a couple of weeks. There are also opportunities through the complaints procedures that I have referenced and the principal authorities, which can also be pursued by residents and those who are interested in this matter.

As my hon. Friend indicates, we have spoken several times about this. As a Minister for local government, I know that the Secretary of State for Levelling Up, Housing and Communities has also taken an interest in this. We will take back all the points from this debate and consider them from a policy perspective. We must ensure that parish councils work going forward. I would be very happy to talk to my hon. Friend about any specifics outside this debate if that would be helpful.

The vast majority of town and parish councils do incredible work, as do councils of all tiers, day in, day out, to ensure that local residents and communities thrive and improve. In any system with thousands of different entities, that cannot always be the case, and where there is challenge, problems and poor behaviour, that absolutely should be raised. It is absolutely the case that light should be shone on it and that transparency ultimately wins the day. I wish my hon. Friend well in the work he is doing to highlight the challenges he sees. I am happy to continue the conversation and thank him for the opportunity to be able to contribute today.

Motion lapsed (Standing Order No. 10 (6)).

Draft Building (Public Bodies and Higher-Risk Building Work) (England) Regulations 2023

Lee Rowley Excerpts

Monday 27th March 2023 General Committees

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

I beg to move,

That the Committee has considered the draft Building (Public Bodies and Higher-Risk Building Work) (England) Regulations 2023.

It is a pleasure to see you, Sir Robert, and to serve under your chairmanship. Under the Building Safety Act 2022, the Government are introducing a more stringent regulatory regime during design and construction, with the Building Safety Regulator becoming the sole building control authority for building works defined as higher risk. Under the current regime, there is an historical exemption available to public bodies where, if approved by the Government, they can obtain a partial or full exemption to the building control procedural requirements. The draft regulations will ensure that in future, public bodies will not be able to obtain an exemption to carry out building control on their own higher-risk building work. The Building Safety Regulator will instead carry that out for all higher-risk buildings, including those owned by public bodies.

The regulations are a small but important part of our ongoing reforms to improve the safety and standards of all buildings. First, the regulations remove the Minister’s ability to grant building control procedural exemptions to public bodies for higher-risk building work. In future, all higher-risk building work will be overseen by the Building Safety Regulator. The ability to grant exemptions for non-higher-risk building work is unaffected.

Secondly, the regulations require any public bodies with a partial exemption under section 54 of the Building Act 1984 to cancel their public body notice with the local authority if the building work becomes higher risk. Local authorities will also be required to cancel public body notices in the same circumstances. Currently, no public body is approved under this partial exemption system; therefore, the measures are being introduced for future use only, and they will not change existing arrangements. Only one public body has any type of exemption—the Metropolitan police—and separate regulations to be introduced later this year will change that exemption to apply only to non-higher-risk building work.

Thirdly, the regulations will allow the Building Safety Regulator to impose a fine of £7,500 on public bodies that have not cancelled their public body notice when building work becomes higher-risk building work. For the reasons outlined, I commend the regulations to the Committee.

--- Later in debate ---

[Lee Rowley]

I am grateful for the hon. Gentleman’s questions. I wrote down his first question, but I have lost it among my documents. Will he remind me of it?

[Matthew Pennycook]

It was about the impact assessment.

[Lee Rowley]

The position is that, because the public body notices are not being utilised and the use of them is therefore minimal, the impact of their usage or the future need for them will also be minimal. On the second point, I am happy to write to the hon. Gentleman, in order not to detain the Committee any longer.

Question put and agreed to.

Oral Answers to Questions

Lee Rowley Excerpts

Monday 27th March 2023 Commons Chamber

[Marsha De Cordova (Battersea) (Lab)]

13. Whether he is taking steps to support leaseholders with building safety costs.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

The Building Safety Act 2022 introduced extensive protections for leaseholders in buildings above 11 metres. Developers in Government schemes will pay for cladding remediation, and developers that have signed contracts or are associated with landlords will also pay for non-cladding work.

[Marsha De Cordova]

It is a national disgrace that nearly six years on from the Grenfell tragedy, leaseholders in Battersea are still stuck in buildings that are below 11 metres. It is not right for the Secretary of State to say that this will be assessed on a case-by-case basis when we know that shorter buildings will have more vulnerable people in them, will have more cladding, and will suffer from greater fire safety defects. When will the Government finally get a grip and allocate resources, and prioritise those according to risk?

[Lee Rowley]

I am sorry to disagree with the hon. Lady, but it absolutely is the case that buildings under 11 metres typically have a lower set of issues associated with them when reviewed on the basis of the PAS 9980 principles, which are utilised to assess whether issues are there or not. Where colleagues are aware of problems in buildings, we have asked—and continue to ask—them to get in touch with us, so that we can look at those problems. We are doing so—I looked at a case in Romford only last week. If the hon. Lady wants to provide me with further information, I would be happy to look at those individual cases.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con)]

As my hon. Friend will know, the cost to leaseholders does not just end with funding safety measures; many are paying extortionate insurance premiums. Can he tell the House what discussions he has had with the Treasury about reducing those costs and making them more affordable?

[Lee Rowley]

Along with my colleagues in the Department, we are trying to find an industry solution for insurance, and we have been working closely with the Association of British Insurers and with insurers directly on what they can do and how the costs for insurance come down as remediation is concluded. I spoke with the ABI only last week, and I will continue to meet it regularly to try to resolve this incredibly important issue.

[Mr Speaker]

I call the shadow Minister.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

They will only ever deal with a fraction of the problem at best, but the developer remediation contract and the forthcoming responsible actors scheme are welcome. Yet, as things stand, all we know is that the scheme will initially focus on sufficiently profitable major housebuilders and large developers, and it may then expand over time to cover others. Blameless leaseholders trapped in unsafe buildings deserve far greater clarity now as to whether or not the contract and the scheme may eventually cover their building. Will the Government give them that certainty by committing today to publishing a full list of all developers that the Department believes are eligible and should therefore ultimately participate or face the consequences—yes or no?

[Lee Rowley]

I have the greatest respect for the hon. Gentleman, but the reality is that he cannot suggest that only a fraction of buildings are covered by the developer contract. Just in the past two weeks, it has been confirmed that more than 1,100 buildings will be fixed, with £2 billion of work covering 44 different developers. There will be more announcements in due course, but where individual leaseholders have concerns about moving those buildings forward, we are happy to hear about them, but extensive Government support schemes are already in place to allow remediation to occur without waiting for the conclusion of these developer discussions.

[Alexander Stafford (Rother Valley) (Con)]

14. What the timescale is for English city region capital regeneration projects to complete their work.

--- Later in debate ---

[Caroline Ansell (Eastbourne) (Con)]

T7. Local elections are fast approaching, but my local council has said that, from now until 4 May, I can continue to send in casework but it cannot reply. I will not know whether the council has lifted eviction orders or responded to dangerous damp conditions—the list goes on. I champion my constituents’ situations, but that will compromise what I can do to support them. Does the Minister agree that the council’s ruling is wholly disproportionate?

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

Yes. Eastbourne council is wrong. The pre-election period does not stop councils from responding to Members of Parliament, and they should do so.

[Marsha De Cordova (Battersea) (Lab)]

T9. The leasehold system too often traps homeowners, including many of my constituents. They have complained to me of fire safety risk, poor building maintenance, astronomically high service charges and poor customer service. Labour has been calling on the Government to end feudal leasehold systems. Will the Secretary of State bring forward legislation on further leasehold reform in this Session, so that all homeowners can live in a safe, decent and affordable home?

Local Authority Interventions

Lee Rowley Excerpts

Thursday 16th March 2023 Written Statements

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)]

Local councils play an essential role every day. They deliver core services, including to the most vulnerable citizens, they help shape our communities, and support local democracy. Where councils do not meet the high standards that we set for local Government, it is right that Government intervene in order to protect the interests of residents.

Today I am updating the House on the intervention arrangements at three councils of concern to the Department for Levelling Up, Housing and Communities. These are Thurrock Council, the London Borough of Croydon, and Slough Borough Council.

Thurrock Council

On 24 January 2023, I informed the House that the Secretary of State for Levelling Up, Housing, and Communities and I were minded to expand the ongoing intervention in Thurrock Council. Over recent months, the new leadership at Thurrock Council have worked co-operatively and collaboratively with the commissioner, Essex County Council, to start the long journey back. In addition, our proposals were to appoint an independent managing director commissioner to work alongside Thurrock’s existing commissioner, Essex County Council, to provide commissioners with further powers over governance and staffing, and to direct Thurrock Council to take additional actions to support its improvement.

I made this announcement after receiving two reports from Essex County Council in December last year, the commissioner’s first report, and an update letter on the best value inspection. Both documents laid bare the scale and complexity of the financial challenges facing Thurrock Council and noted significant concerns regarding a lack of robust governance and leadership capacity at the council.

I invited representations on our proposal from Thurrock Council, and from members of the public, which I have now received and considered.

Since that announcement, the Secretary of State and I have also received a best value inspection report on Thurrock Council from Essex County Council in its role as best value inspector, which I will publish in due course following a further representations process whereby any particular individuals criticised are given an opportunity to read and respond to those relevant parts of the report before it is published.

Having carefully considered the best value inspection report, and the representations I have received about the intervention, I am satisfied that Thurrock Council is continuing to fail to comply with its best value duty. I am today announcing a formal expansion to the intervention in Thurrock Council to implement the changes we proposed on 24 January 2023.

To begin, we will appoint Dr Dave Smith to be a managing director commissioner. He is a highly experienced former local authority chief executive who has held senior executive positions within local government for the past fifteen years, including chief executive of South Yorkshire Mayoral Combined Authority and chief executive of Sunderland City Council. He will work closely with the existing commissioner, Essex County Council, to support Thurrock Council in its improvement journey. He will be responsible for the day-to-day operations of the council and will provide strategic direction and leadership, until such time as a permanent appointment to the post of chief executive can be made. As I noted in my January announcement, I intend for this appointment to strengthen the intervention model and to increase the council’s capacity to deliver vital improvements.

The Secretary of State will also use his powers under the Local Government Act 1999 to update and expand his directions to Thurrock Council and its commissioners.

In addition to the finance powers they already hold, the new directions will permit the commissioners to exercise further powers over:

All functions associated with the governance, scrutiny and transparency of strategic decision making by the authority to ensure compliance with the best value duty. This will include oversight of an audit of the council’s governance.

All functions associated with the council’s operating model and redesign of council services to achieve value for money and financial sustainability.

The appointment, suspension and dismissal of statutory officers, including powers to determine the process for making these appointments and dismissals, and to define a new officer structure for senior positions at the council.

The development, oversight and operation of an effective performance management framework for senior positions.

The new directions will also instruct the council to take specific actions to support its improvement. These will incorporate the existing instructions to the council issued back in September, but they will go further, and instruct Thurrock Council to undertake the following new actions to the satisfaction of commissioners:

To prepare, produce and implement an enhanced improvement and recovery plan, which builds on their existing improvement plan. This will include new elements to cover:

An action plan to reconfigure the authority’s services commensurate with the authority’s available financial resources.

A plan to ensure that the Authority has personnel with sufficient skills, capabilities and capacity to deliver the improvement and recovery plan, within a robust officer structure.

An action plan to strengthen the authority’s governance function, to secure improvements in transparency and formal decision making. This should include measures to improve the authority’s scrutiny function, including the taking and recording of formal decisions.

Arrangements to secure the proper resourcing and functioning of the system of internal controls, including risk management and internal audit.

To undertake any action that commissioners may reasonably require to avoid, so far as practicable, incidents of poor governance that would, in the commissioners’ reasonable opinion, give rise to the risk of the authority failing to comply with its best value duty.

To take steps to ensure that the role of accountable body to the Thames Freeport is exercised to the satisfaction of the commissioners. This should also be reflected in the improvement and recovery plan.

As part of this next phase of intervention, Essex County Council will continue to act as a commissioner and I look forward to its report in June. As part of the January announcement, I indicated my intent to formalise the role of the leader of Essex County Council in this intervention. I can confirm that I will today issue an updated explanatory memorandum, to accompany the new directions.

I am hopeful that the expansion to the intervention that I am announcing today will help the council to address the concerns set out in the commissioner’s first report and the best value inspection update letter, and to continue its work to improve the way in which the council is run. There will be an opportunity for further reflection on Thurrock Council when I publish the best value inspection report.

The London Borough of Croydon



Regarding the London Borough of Croydon, the council has been subject to two public interest reports by external auditors relating to poor financial decision making and associated governance failings (October 2020) and failures in financial control and poor governance arrangements relating to the refurbishment of Fairfield Halls (January 2022). Croydon has issued three section 114 notices since 2020, the latest being in November 2022 following the conclusion that it cannot balance its budget in 2023-24 and beyond.

The former Secretary of State appointed an independent improvement and assurance panel in February 2021, chaired by Tony McArdle OBE and made up of independent experts, to offer the council advice, expertise and challenge as it sought to address failings related to poor financial control and governance. The panel has provided regular assurance reports to the Secretary of State on the council’s progress throughout this time, with their latest report being submitted in November 2022.

Whilst the council has struggled to resolve serious governance and financial issues for several years, I want to place on record that the Secretary of State and I recognise the positive steps taken by the council, with oversight from the improvement and assurance panel, to lay the foundations for its recovery and ensure that legacy issues are being addressed. In May 2022, Croydon changed its model of governance with the election of a Mayor, Jason Perry, and a new council. The Secretary of State acknowledges the panel’s assessment in their latest report that the Mayor has been working constructively with them and is prepared to “take firm decisions” to return the council to a sustainable financial footing. The panel have also commented that within the council there is

“much evidence of managers and staff grasping the scale of the problem and doing their best to fix it.”

Historic issues have continued to be unearthed at Croydon and their potential impact on the council and the progress it has made to date must not be underestimated, particularly given its precarious financial position. Croydon is currently unable to achieve financial sustainability on its own accord and has requested an unprecedented level of support from Government as a result of these historic issues.

On balance, the Secretary of State agrees with the panel’s latest assessment, that the acknowledged and welcome work of the new leadership has made good progress, however he has concluded, including as a result of the historic problems and the extent of improvement necessary, that the council is not meeting its best value duty.

The Secretary of State is minded to implement the intervention package set out below and in line with procedures laid down in the Local Government Act 1999 to assist the existing extensive effort to go even quicker. Officials in the Department have, as a result, written to the council seeking representations on the proposed intervention package.

The proposed package is centred on the council continuing to make the necessary improvements to the satisfaction of the improvement and assurance panel. The panel will be backed by directions issued to the council requiring it to follow the instructions of the panel if they are not satisfied with the progress being made. The panel will report to the Secretary of State every six months.

It is important that the council leads its recovery but that it does not lose momentum in making the necessary improvements. As part of the representations period, Ministers will reflect on membership of the panel to ensure the arrangements are fit for purpose to support the council moving forward.

We are inviting representations from the council on the Secretary of State’s proposals by 30 March. We want to provide the opportunity for members and officers of the council, and any other interested parties, especially the residents of Croydon, to make their views on the Secretary of State’s proposals known. Should the Secretary of State decide to intervene along the lines described here, he will make the necessary statutory directions under the 1999 Act. I will update the House in due course.

Slough Borough Council

I would also like to take this opportunity to provide an update on the intervention at Slough Borough Council. On 22 December 2022 I received a copy of the commissioners’ second report on the progress of the intervention. The report has made for stark reading. Commissioners describe there being

“a real sense that many in leadership roles do not see leading and modelling corporate improvement as their overriding responsibility but only as something they have to do”

This is wholly unacceptable. The well-publicised failures of Slough have stemmed from a poor culture of checks and balances, as well as inadequate leadership. The council and its leadership must accept this and embrace the need to change. The results of these past failures have devastated the council and made its financial position unsustainable. Within their report commissioners have gone so far as to query the viability of Slough as a unitary authority. For Slough to remain in its current form there will need to be a fundamental shift in the attitude and behaviour of the council and its leadership. The role of commissioners will be of paramount importance and their focus in the coming months will be on a new operating model for the authority.

Our intervention now needs to move from its discovery phase to one of requiring the council to do the hard work of transformation. The council must step up. Equally, we will put in place a commissioner team who will move the council through the next stage of this journey. Max Caller CBE, lead commissioner for the intervention, wrote to the Secretary of State on 1 March to tender his resignation and stated his intention to retire from public life. The Secretary of State has accepted Mr Caller’s decision and I would like to thank him not only for the work he has undertaken as part of the intervention, but also for his many contributions to the local government sector. In addition, Margaret Lee, finance commissioner, also wrote to the Secretary of State on 12 March to tender her resignation for personal reasons. The Secretary of State has accepted Ms Lee’s resignation with immediate effect and I would like to thank her for her excellent work in Slough and Croydon and wish her well for the future. We will make an announcement on the revised commissioner team in due course and we will make appointments with the experience and skill set to ensure the council progresses, alongside the enhanced senior officer team now in place at the council.

The intervention at Slough remains challenging. I strongly urge the leadership in Slough to consider the findings of commissioners’ report and reflect on what more they could be doing not only to meet the requirements of the statutory directions, but to drive forward necessary changes. Things must change.

Conclusion

I want to acknowledge the work of the dedicated staff who deliver the business-as-usual services of the councils included in today’s announcement, many of whom have strived to deliver those services over recent years despite the financial, leadership and governance challenges faced by their respective authorities. They will play a vital role in each council’s recovery. I have deposited in the House library copies of those reports I have referred to that are also being published on gov.uk today.

We are also today publishing on gov.uk the second report from the Sandwell commissioners, which the House may wish to note. The commissioners report that they have seen some progress at the council in the past six months, though there is still a lot of significant work to be done, with a particular focus on the customer journey and culture. Last week I also published the third report from the Liverpool commissioners. The report is cautiously optimistic about the council’s progress. It is clear, however, that the council faces significant change in the months ahead with a transition in officer and political leadership plus the implementation of a significant transformation programme. The continuation of the intervention in Liverpool will be vital to support the council through this period of change.

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