Housing: Underoccupancy Charge

Lord Best Excerpts

Tuesday 3rd November 2015 Lords Chamber

[Lord Freud]

The noble Baroness is right that there is quite a lot of variation in the regional responses. I gave the example of the north-west, where there had been a reduction of 22%. The two regions that have reduced the smallest amount in England and Wales are the north-east, and Yorkshire and Humber. Other areas, such as London, the east of England and the north-west are the outliers on the upside. The other two have had the least-efficient response to this policy.

[Lord Best (CB)]

My Lords, I know that the Minister feels immense sympathy for those people who are unable to move, such as the tenants in Knowsley, where I was on Friday, who cannot downsize even though they wish to. They have taken a big hit in their standard of living. Will he join with me in commending the resilience and fortitude of those families that have taken a drop in income as a result of the so-called bedroom tax and borne a disproportionate share of the burden of deficit reduction?

[Lord Freud]

The noble Lord is quite right to make the point that this is about deficit reduction, for which this has been an important policy. It has now had savings of £1 billion over that period. People have had a range of responses, but the most important is that many people have gone into work or moved off the benefits system, mainly by going into work. That is 70,000 of the 90,000 reduction.

Housing: Under-occupancy Charge

Lord Best Excerpts

Tuesday 16th June 2015 Lords Chamber

[Lord Freud]

There are a substantial number of homes available each year. There are about 1.4 million single-bedroom social housing homes and, on the HomeSwapper site, there are now 55,000 one-bedroom homes and 142,000 two-bedroom homes to swap into.

[Lord Best (CB)]

My Lords, I congratulate those housing associations on keeping down their arrears through very heavy investment and a lot of hard work. I congratulate the Minister on producing and continuing to produce large sums of discretionary housing payments, which have been very important in alleviating some of the misery caused by the so-called bedroom tax. Will the Minister confirm that, although they obviously reduce the savings to the Treasury, the discretionary housing payments, which have saved a lot of people, will continue at their current levels or at higher levels in future?

[Lord Freud]

The current year figure is running at £125 million, which is very high and up substantially—by more than £100 million—on the figures that we were looking at in 2010. I obviously cannot make any commitment at this stage on its future levels—that will go into a spending review—but clearly this has been an important way of making sure that this policy goes in without the kind of impacts that some people were concerned about.

Housing: Underoccupancy Charge

Lord Best Excerpts

Tuesday 22nd July 2014 Lords Chamber

[Lord Best (CB)]

My Lords, I am grateful to the noble Baroness for giving way. I thank the Minister for putting this research in hand, as he promised when the ping-ponging on this measure stopped between us and the other place. I am afraid that one cannot take very much comfort from the figures. The Minister said that the figures are pretty bad; they are, in fact, awful: 60% of people getting into arrears with only 4.5% of people making a move as a result of the measure. He said that there are some more recent figures that are better; I fear that they are not very much so. Five hundred thousand families are affected by the measure and the position remains dire, with a third of landlords—

[Noble Lords]

Question!

[Lord Best]

Will the Minister confirm that when the space standards were introduced in the private sector, the measure was not retrospective and did not apply to all people already occupying the properties? Does he accept that it is quite different in this case, where it was applied to the lettings of existing tenants, which is why it has been so harmful and so hurtful?

[Lord Freud]

My Lords, I have told the House on previous occasions that the difference here is that there is very little changeover or moving within this particular group, so there is no way in which one could introduce this kind of policy on that kind of basis. It therefore has to apply to stock. I remind noble Lords that the impact assessment for this measure envisaged moving or downsizing on the part of about 50,000 people. Nineteen thousand people have moved during the first eight months, which is on the trajectory of our expectations.

Housing: Discretionary Housing Payment

Lord Best Excerpts

Wednesday 9th April 2014 Lords Chamber

[Lord Best (CB)]

My Lords, has the Minister had a chance to see the Joseph Rowntree Foundation report released today, which provides a fairly definitive analysis of what has been going on with the so-called bedroom tax over the past six months? If he has, did he note that—sadly, from one perspective—savings were about £115 million less than had been hoped for during the course of this year? About 6% of people have moved home, but another 22% have been trying to move home but have not been able to downsize, because there is not accommodation for them. Although the Rowntree report from Professor Wilcox predicts that over £330 million will be saved this year, sadly, that is at a pretty great cost to both tenants and landlords.

[Lord Freud]

The savings that we are looking at—which are running on the Budget scoring at £490 million—are both observable and unobservable; in other words, from people moving or from people taking up jobs and coming off benefits. There are various figures around. The BBC last week talked of 6% of people moving in 11 months; the JRF report, which the noble Lord has just cited, talked about 6% in six months; a report a couple of months ago from Harry Phibbs, doing a similar job, found that 11% had come off benefits because they had gone into work. We will have proper returns on discretionary housing payments in May, and are working on getting a proper report on all of this.

Apprenticeships

Lord Best Excerpts

Wednesday 26th March 2014 Lords Chamber

[Lord Best (CB)]

My Lords, I am grateful to the noble Lord, Lord Young of Norwood Green, for instigating this debate and for stealing half my thunder by drawing attention to a report on construction industry apprenticeships which was released recently from a cross-party group of parliamentarians from both Houses, chaired jointly by the right honourable Nick Raynsford and myself. It was entitled No More Lost Generations: Creating Construction Jobs for Young People. If I only manage to impart one suggestion tonight to this House and to those outside who are following our debate, it is that everyone with an interest in the subject of apprenticeships should google “no more lost generations” and look at our report. It was written by Denise Chevin, supported by the Chartered Institute of Building and the Construction Industry Training Board, with input from the excellent charities doing great work—albeit on a small scale—to get young people into fulfilling construction jobs.

Our report highlights three stark facts. First, there are still well over 950,000 NEETs—young people between 16 and 24 years old not in employment, education or training. That figure was quoted by the noble Lord, Lord Young. Secondly, the construction industry is now expanding once again and will be creating 182,000 extra jobs alongside the need to recruit 400,000 building workers to replace those retiring over the next four years. Thirdly, despite these big numbers, there were only 7,280 completed apprenticeships in the sector last year, which was half the number of the year before. So we have 7,000 apprentices for a £100 billion-a-year industry that needs to draw in nearly 600,000 new workers by 2018.

In the absence of sufficient numbers of home-grown employees, the contractors—as they did for the construction of so many of the Olympic Games facilities—will import their labour from other countries, particularly from eastern Europe. I bow to no one in my admiration of building workers from Poland and the other A8 countries—the globalised labour market of the 21st century means that the skills of overseas workers can provide the construction industry with a labour force that provides quality at relatively low cost—but turning our backs on our own young people has huge financial and social costs. At the launch of our report, the deputy chair of the Construction Industry Training Board, Judy Lowe, quoted the extra cost to society of a NEET who never obtains a qualification or acquires the skills to hold down a proper job: £165,000. For young people who need the self-respect and sense of purpose that comes from being in employment, failure to acquire the necessary skills can lead to pretty miserable lives.

With the economy now recovering and the nation investing in construction in infrastructure—for example, Crossrail, HS2, power stations and, most labour-intensive of all, housing—we can get a double benefit by also creating the jobs that the young of this country need. Government support is vital. Training objectives need to be incorporated into public contracts. Moreover, the Chancellor has extended government support for housebuilding through the Help to Buy scheme, resulting in big jumps since the Budget of the share price of Persimmon, Bovis Homes, Taylor Wimpey and others. Perhaps the tit-for-tat should be a commitment from the housebuilders to skills training for home-grown talent.

Local authorities and housing associations can insist that companies bidding for their work must employ more apprentices. The use of planning requirements can support this. Local authorities also have the local contacts and local knowledge, crossing boundaries through the local enterprise partnerships, to be a focal point for initiatives that are tailored to the particular employers’ requirements in their locality.

To bring all this together and take forward the recommendations from the No More Lost Generations report, we called for a summit of construction leaders, convened by the Construction Industry Training Board and the Department for Business, Innovation and Skills. This could do for training what the 2001 construction summit did for safety. That summit led to a sea-change in attitudes to accidents and fatalities on building sites, to very great effect. A construction training summit would agree a new apprenticeship strategy, bringing together industry leaders, specialist contractors, housebuilders, local authorities, social landlords and central government. The response Nick Raynsford and I have received from the Construction Industry Training Board’s chairman, James Wates, has been very positive. The CITB is setting up an apprenticeship commission to take forward this plan and report to a construction training summit.

We have also had a positive response from BIS Secretary of State Vince Cable. His sympathy for these aims is well known and I hope he will agree to jointly sponsor the construction leaders summit later this year. What is certain is that it would be the height of folly not to use the revival of construction in the UK to provide fulfilling careers for tens of thousands of our young people who must not be another “lost generation”.

Olympic and Paralympic Legacy Committee

Lord Best Excerpts

Wednesday 19th March 2014 Lords Chamber

[Lord Best (CB)]

My Lords, I, too, had the privilege of serving on the Select Committee. I pay tribute to the noble Lord, Lord Harris of Haringey, whose hard work in keeping us all up to speed was an invaluable component in the success of this venture, as was the extremely impressive input of our officer team and the diligence of my committee colleagues.

If I have a criticism of this experiment in the use of the Select Committee approach for a short, sharp, focused exercise, it is a positive one: a report with this much good material in it deserves more widespread publicity and dissemination. A few newspaper articles are not enough to spread the word and while this debate tonight is more than helpful, a more extensive follow-through over a sustained period would make the whole exercise better value for money.

I turn to the content of the Select Committee’s excellent report. My special interest is in the legacy promised by the Games for the regeneration of east London and beyond. Just how successful has this huge investment been and are there lessons, positive or negative, that we should take for regeneration projects both here and elsewhere in the future? A number of our witnesses explained how installing the transport and developing the sites of the Olympics and Paralympics meant compressing decades of much needed investment into a few years. The incredible facilities, the transportation systems and extensive infrastructure, and the housing—the Olympic Park alone will eventually house more than 10,000 new households—have all magically accelerated the regeneration of east London. Certainly there has been a speeding up of the hoped-for convergence between the position of the East End boroughs and the rest of London as measured by a number of key indicators.

So is this a story of unmitigated regeneration success? It is important to see what has worked and why, because of the implications for the regeneration of other post-industrial areas of the UK and, indeed, for other large-scale housebuilding projects, including the development of whole new settlements like the “garden city” of Ebbsfleet, announced earlier this week. What this whole exercise has demonstrated is that a particular set of organisational structures, a particular governance framework and a particular modus operandi can be hugely successful. The key components are central government support for a devolved local agency that crosses local authority boundaries with a powerful co-ordinating vision and a clear master plan, with powers—compulsory powers, if necessary—to acquire, assemble and control land use. Like the London Docklands Development Corporation which gave us the phenomenon of Canary Wharf, like the new town development corporations, and like so many international examples of large-scale regeneration from Amsterdam to Singapore, these are the characteristics for successful outcomes. What is then achieved is what was positively planned, in this case including high-quality buildings delivered on time and within budget, not the least of which is well designed, sustainable, affordable and accessible housing.

These are the things we hope for in other places but so seldom achieve. Indeed, the usual approach to development in the UK is almost the exact opposite. By and large we sit and wait for speculative developers to come forward for planning permission with projects that we hope will fulfil all the economic and social objectives an area needs, and we are invariably disappointed. The model of the Olympic Delivery Authority and now the new mayoral London Legacy Development Corporation, show how we can do so much better. These lessons can be transferred not just to the new town of Ebbsfleet, but to major regeneration projects far from the south-east of England, and indeed to the vital task of doubling the nation’s supply of new homes.

I come now to a less positive lesson from the regeneration legacy of 2012. Despite all the brilliant outcomes from the Games, I feel that there is an Achilles heel in this success story. It is that the economic development that produced thousands of new jobs largely bypassed Londoners born and brought up in the East End. As the noble Lord, Lord Harris, said, the Select Committee met with local community groups and heard the sense of grievance that there had been so few opportunities for them. This is confirmed by statistics suggesting that despite there being 104,000 unemployed people in the Olympics boroughs, convergence with the rest of London on the employment criteria has lagged behind, even though more than 10,000 new jobs were created by the Games. Counting as a “local”—someone who has lived nearby for the last 18 months—misses the point. Waves of workers from eastern European countries moved here over the several years of the Olympics development, and they did a great job. I accept the point made by a manager on one of the projects we visited. He agreed that it was a pity that no one on the site was truly a local, but asked, “What did you want—the Olympic village built on time and on budget or a construction training scheme for local residents?” He had a point.

In a world of globalised labour markets and with a major problem in this country of poorly targeted skills building, we cannot blame the leadership of the Olympic and Paralympic Games for failing to engage enough home-grown talent. Some useful efforts were made to persuade contractors to take on apprentices and the results were better than for most construction sites, but largely the opportunity was missed. However, the massive regeneration effort kick-started by the Games will run and run. I note in today’s Budget, for example, that extensive housing and development is to be supported in Barking and that some 6,000 new jobs are likely to result. It is not too late to change our ways and use investment in regeneration to skill up many young people—there are still nearly 1 million under 25 year-olds who are not in employment, education or training—so that we can gain not just buildings but jobs for local labour. It is wasteful to pull in the next cohort of eastern European building workers while the unemployed of east London remain unskilled and dejected.

I commend the report released two weeks ago following an inquiry by a cross-party group of parliamentarians jointly chaired by the right honourable Nick Raynsford and myself called No More Lost Generations: Creating Construction Jobs for Young People. The report, which was backed by the Construction Industry Training Board and the Chartered Institute of Building, calls for work in schools and for careers advice about the opportunities in an industry that reckons it will need over 500,000 more workers over the next four years to replace those retiring and to cope with the current expansion of building activity. Yet, as the report notes, only 7,200 apprenticeships were completed in the construction industry last year. I was encouraged by the Government’s and the mayor’s response to our firm recommendations that this issue should henceforth be given real priority in order to take forward the legacy of the Games, and I hope that the LLDC will see this through.

In conclusion, the regeneration legacy of the 2012 Games is truly wonderful and demonstrates what a proactive, empowered and devolved development structure can deliver. But as we continue to regenerate east London, and indeed take the legacy lessons elsewhere, I hope that we can use the resulting investment to achieve a double benefit, not just the infrastructure and new homes we need, but the apprenticeships, the training and the jobs that the construction industry can so importantly provide for our own next generation of workers.

Housing: Underoccupancy Charge

Lord Best Excerpts

Monday 20th January 2014 Lords Chamber

[Lord Freud]

My Lords, this is a substantial saving, as my noble friend says. Our central estimate is that we will save £500 million a year on this programme, which makes it an important contributor to the Government’s deficit plan. If the Opposition maintain their policy, they need to look at how to find that money back. Not only that, they will run the risk of having to have a similar policy in the private rented sector.

[Lord Best (CB)]

My Lords, has the Minister had a chance to read the report from the Defra Select Committee, chaired by Anne McIntosh MP in the other place? It recommends that rural communities should be exempt from the bedroom tax because it is so difficult for people in rural areas to move down to smaller premises. Staying put means they can be paying £25 a week that they were not paying before, creating a great deal of hardship. Has the Minister had a chance to read that report and react to it?

[Lord Freud]

My Lords, I have looked very closely at the issue of rural communities. That was why, this year, we put in an extra £5 million a year to handle the subsidy arrangements, which buys out a substantial proportion of the cost of this policy.

Housing: Underoccupancy Charge

Lord Best Excerpts

Thursday 12th December 2013 Lords Chamber

[Lord Freud]

My Lords, my noble friend is absolutely right that personal debt in this country is a major problem. There has been a series of important reviews of that in recent weeks. I am looking at it very closely in the context in particular of the introduction of universal credit. That is one of the factors in the review that I mentioned in response to the last question and I will keep it very much in mind.

[Lord Best (CB)]

My Lords, will the noble Lord join me in correcting a mistaken view that some have expressed that reducing support for people in council houses and housing association properties who are deemed to have a spare room is only repeating a measure already in place for private sector tenants? Does he agree that the arrangements for private sector tenants are quite different, in that people are given a sum of money—the maximum that they can spend—and are sent out to find a property on the private market, balancing the number of bedrooms against the location and other factors? In particular, a major difference between the two sectors is that in the private rented sector these measures apply only to new and future tenancies and have not been applied retrospectively to people in existing tenancies—namely, the 660,000 people who find themselves covered by a measure that relates to the past and not, as in the private sector, one that relates to future tenancies.

[Lord Freud]

My Lords, clearly there is a difference between the structures of the social and the private rented sector arrangements but the objective is the same. The taxpayer provides the appropriate amount of money to house that individual or family in the same way in the private rented sector as in the social rented sector.

Housing: Under-occupancy Charge

Lord Best Excerpts

Monday 21st October 2013 Lords Chamber

[Lord Freud]

My Lords, it is simply premature to come to any conclusions as to the level of arrears. We will, of course, provide that information when we have the kind of reliable information that this House requires me, as a Minister, to deliver. There have been various surveys, but the samples are just too narrow. There are 1.4 million one-bedroom properties in the social rented sector and we are looking to have those managed more efficiently. I remind noble Lords that the scare stories about what would happen to our LHA reforms were very similar to the kind of stories that are being propagated now and we have not seen any poor reaction in terms of homelessness as a result of those reforms.

[Lord Best (CB)]

My Lords, in relation to the evidence that the Minister mentions, can he give us an update on the consultation with me and others that he promised when noble Lords rejected the so-called bedroom tax repeatedly and firmly? When will that research programme be the subject of consultation with us? When is it likely to be concluded? Will he accept the evidence if it shows that what he calls the “scare stories” turn out to be true and that a good deal of disruption and hardship are caused by this measure?

[Lord Freud]

My Lords, as the noble Lord knows, an elaborate programme of research is going on around this measure and will take place over a two-year period. Regular reports will be provided. I believe that the first interim reports are coming out in the spring. I will, of course, be pleased to talk to the noble Lord about the research and will give a great deal of attention to what we find. If there are concerns, we will match them. As noble Lords will know, we have made changes to the discretionary housing payments system this year to reflect some of the early concerns that have developed and we have found an extra £35 million for that.

Queen’s Speech

Lord Best Excerpts

Tuesday 14th May 2013 Lords Chamber

[Lord Best]

My Lords, my contribution to this debate considers the issue of housing in the context of health, welfare and several other aspects of the gracious Speech. My theme, to quote a Canadian saying, is that housing is the home of all issues. I declare my interest as president of the Local Government Association, chair of the Hanover Housing Association, chair of the council of the Property Ombudsman and, since I will touch on related matters in the context of the forthcoming Care Bill, a member of the advisory board of the Equity Release Council.

The fundamental housing requirement, which is of equal concern to all the main political parties, is to secure the building of far more homes to reduce the acute housing shortages that are the underlying cause of homelessness, overcrowding, high rents and low standards of accommodation. However, the benefits of a boost to housebuilding go much wider. It is the construction industry that can act as the engine of growth, as it always has done in previous recessions. Within that industry it is housebuilding that delivers the biggest bang in terms of jobs, not least in maintaining, modernising and upgrading the energy efficiency of existing homes. I hope that the Government can strengthen the connection between youth unemployment, now at 20% and carrying the terrible danger of a lifetime of worthlessness if skills are not acquired, and the opportunities for training and jobs presented by investment in new homes.

We have all admired the contribution of migrant building workers, particularly from Poland, but there is much to be said for investment in apprenticeships and training in the building industry for our own young people. To capitalise on this chance of tackling two huge social issues simultaneously, youth unemployment and acute housing shortages, the Chartered Institute of Building and the Construction Industry Training Board, with the Youth Build Trust, have asked Nick Raynsford MP in the other place and me jointly to chair an inquiry by parliamentarians on this theme. I feel sure that the Government will want to support this initiative.

On other occasions I have commended the determination of the Minister for Planning to overcome barriers to much-needed housebuilding, including the obstacle of the seemingly universal local opposition to virtually any development. Recently, the Government have come forward with bold plans for help-to-buy mortgage guarantees and equity loans. There is always the danger that stimulating demand, rather than directly boosting supply, will simply push up prices. But as part of the mix, these financial measures could give the housebuilders confidence to get more homes built and on to the market. However, the private sector housebuilders will construct only around half the number of new homes needed to match the number of new households formed each year. We also need subsidised housing for those who cannot afford to purchase or to pay full market rents. Housing associations could double their output with the requisite funding through the Homes and Communities Agency and the Greater London Authority. This investment really should be a high priority for the Government’s forthcoming spending review. Now is the time to harness the lending capacity of councils, which used to match the output of the private sector and build half the country’s new housing, by removing the unnecessary cap on their prudential borrowing for housing purposes, as the LGA is advocating. This would enable local authorities to finance the building of some 60,000 extra homes, mostly on land that they already own, without the need for subsidy.

Some will argue that one area of housing on which there should have been an announcement in the Queen’s Speech is the regulation of the private rented sector. However, I was delighted that the efforts of your Lordships in support of the noble Baroness, Lady Hayter, led the Government to bring forward an amendment to the Enterprise and Regulatory Reform Bill that will give the consumer greater protection by requiring all lettings and managing agents, who look after about 60% of the private rented sector, to be part of an independent ombudsman dispute resolution scheme.

Sadly, the Government did not listen to your Lordships on another housing issue on which they suffered successive defeats in this House—the issue of welfare reform, which has targeted support with housing costs for those on the lowest incomes. The caps, ceilings and limits on housing benefit and local housing allowances, which are more likely to deter private landlords from letting to poor people than to persuade landlords to reduce rents to help them, have been accompanied by the levy on housing association and council tenants deemed to have a spare room. I have been much criticised for naming this the bedroom tax, but I suspect that Ministers now regret introducing this controversial measure. This levy penalises those in work as well as those who must find the money from their other benefits by cutting back on basic essentials. It is not too late for the Government to moderate its impact through a major increase in the totally inadequate level of discretionary housing payments, which local authorities need to deploy in the many cases of hardship, and where tenants cannot be offered a suitable smaller property.

It should be noted that the housing associations whose tenants are hit by the welfare reform cuts are anticipating major problems of rent arrears. This not only means they must cut back on spending on new housing investment just when the Government need them to do more, but they will be less able to undertake the brilliant community work that so many of them have been doing to provide for those with special needs, to tackle anti-social behaviour—again, something that the gracious Speech makes clear is a government priority—or to support young people into training and jobs.

Finally, I want to note the immensely important link between housing and the Government’s plans for funding social care, which we will be debating when the Care Bill reaches us. The Government’s proposals, in seeking to assist those who encounter high social care costs, are welcome, but the help provided for those in residential care may not go as far as many have hoped. A large proportion of the fees will be excluded because they cover the board and lodging or hotel costs, while the care costs will be met only at low levels, probably well below the average in each area. By my calculations, in a typical case the individual would probably not be assisted until they had spent some £144,000. If their fees reached £300,000, they could expect only some £50,000 in support.

This is where housing issues come in. If an older person’s own home is manageable, warm, accessible, affordable and safe and secure, independent living can remain a sensible option for their lifetime, with care delivered to the home when needed. They can return home from hospital, perhaps after a short stay in a residential setting, and the emotional traumas and heavy cost of moving permanently into institutional care can be avoided. If their housing is right, the Dilnot inquiry’s key recommendation for limiting care costs can work well and vital savings can be made to the NHS and social care budgets. This argues for priority within the hoped for boost to housebuilding to go to developing really high-quality older people’s housing. This has the enormous added benefit of freeing up for the next generation some of the 4.2 million houses occupied by pensioners that have more than two spare bedrooms.

The interrelationship between housing and care also argues for more and better opportunities for safe and sensible equity release schemes. These can enable home owners to recycle some of the wealth tied up in their home to do the improvements that will cut their fuel bills, make the adaptations such as replacing a bath with a walk-in shower, and generally ensure that it is not their home that forces them into residential care. Giving priority to the nation’s housing can not only change the lives of young and old but can support the Government’s wider ambitions for reviving the economy, tackling youth unemployment, reducing social care and health costs and so much more. I hope that the Government are listening.