Domestic Premises (Energy Performance) Bill [HL]

Lord Best Excerpts

2nd reading & 2nd reading (Hansard): House of Lords & 2nd reading (Hansard)
Friday 7th February 2020 Lords Chamber

[Lord Best (CB)]

My Lords, I declare my interests as president of the Sustainable Energy Association and in private rented and social housing, as on the register. I will say a word about the Sustainable Energy Association: it has private sector and non-profit members, and it campaigns for policy and practice solutions for securing a low-carbon, energy-efficient future. The SEA’s website is well worth a visit. I pay tribute to its head of parliamentary affairs, Ron Bailey, who is a wonderful advocate for sustainable energy and worked with Sir David Amess, another passionate advocate, to introduce a similar Bill in the other place. I am sorry to report that Ron Bailey was rushed into hospital this week. I send him best wishes for a speedy recovery. Thanks too go to Sam Crichton, who has also been working for two years on this Bill, now brought forward by the noble Lord, Lord Foster of Bath, whom I thank for his excellent speech and for championing this legislation.

I support this significant Bill. Its adoption would turn the Government’s aspirations for the next steps toward a net-zero carbon future into reality. We could move from good intentions and inspiring words to the firm commitments—the essential certainty—needed to harness the energy, investment and innovation of manufacturers, installers, developers, property owners, lenders and investors. I want to add two points to those already covered so well by the noble Lord, Lord Foster.

First, there are the special circumstances of properties in rural areas. These will be in localities where fuel poverty is likely to be a special issue because average incomes are lower, while energy costs are higher, than in the country as a whole. There are 4 million properties off the mains gas grid. Many of these use oil, which not only is expensive but has high price volatility, which makes budgeting difficult, particularly for low-income households. The positive aspect, however, is that a rural setting is likely to be more accessible for solar energy and for ground-source heat pumps. Renewable energy sources may be more expensive but should be easier to tap into than in high-density urban locations; their use will be of greater benefit in these rural communities. So my first point is the need to rural-proof sustainable energy solutions.

Secondly, perhaps I could add some thoughts on the private rented sector, where energy standards are proportionately at their worst levels. The underlying problem is that the upgrading of properties in the private rented sector does not directly benefit the landlord, because more energy-efficient properties seldom generate higher rents. It is true that landlords can expect cost savings from good tenants staying longer, so saving the costs of reletting homes, and from ongoing maintenance bills being lower because they are so often caused by damp and condensation. But persuading private landlords to invest significantly when financial returns are not evident has proved a stumbling block to a series of earlier efforts, including the ill-fated Green Deal.

Currently, and quite properly, private landlords must cover energy-saving costs of up to £3,500, in most circumstances, if properties fall below the EPC—energy performance certificate—band E rating. It will be a big jump to require expenditure of up to £20,000, which may be needed if major works such as external wall insulation are necessary to achieve a band C rating. It is sensible for government to recognise from the outset that enforcing payment from the 2.4 million private landlords, the majority of whom own only one or two properties, will be a difficult and costly task.

As we all know, local authorities are overstretched and under-resourced; enforcement action in the PRS—the private rented sector—is already problematic. It is very different from working with council landlords and housing associations, which manage hundreds or thousands of homes and are fully regulated bodies. I suspect that the necessary co-operation of the private rented sector will be forthcoming only if the Government accept the painful necessity for significant grant-aiding or serious tax concessions for PRS properties. The Bill is flexible on ways and means, and can accommodate such governmental help. Its principles remain absolutely right.

In strongly supporting the Bill, I emphasise, first, the need for rural-proofing of future policy and, secondly, the necessity of engaging with the realities of the most complex sector—the now extensive private rented sector, for which I fear some serious governmental investment will be needed if we are to get things done. However, that investment will be well worth while.

Local Housing Need

Lord Best Excerpts

Thursday 14th September 2017 Lords Chamber

[Lord Best (CB)]

My Lords, I declare an interest as vice-president of both the Local Government Association and the Town and Country Planning Association. Earlier, I welcomed the Government’s White Paper, not least because it reversed some of the worst bits of the Housing and Planning Act, as it now is, but also because it was entirely positive about trying to build more homes. I believe the Government are absolutely sincere in wanting to up the numbers and achieve some of these targets. I welcome the objective assessments regime, announced today, and recognise its intention to see more homes built. That is exactly what we want.

I think the two anxieties that people have are on the affordability and the quality of the new homes that are built. We need to express an interest not only in quantity but in affordability and quality as well. Earlier in your Lordships’ Chamber we made a good deal of mention of affordability when we discussed the fact that those on the lowest incomes are no longer able to afford rents, even those produced by the housing associations in their homes, because housing association grants have been cut. That has pushed up the rents but housing benefit has not taken the strain after the succession of cuts that have reduced it. I recognise that I am talking to the wrong government spokesman on those issues, as this is a matter for the Department for Work and Pensions, but those issues are extremely serious and it is very troubling that the housing associations set up to house the poorest in society are saying that they are having to turn the poorest away nowadays. Of course, the private landlord will not step into the breach, meaning, we fear, that homelessness is bound to rise.

The other issue, which comes squarely within the Department for Communities and Local Government’s remit, is that of quality, which goes alongside quantity. Our front line in trying to achieve quality—with the largest proportion of all new homes being built by housebuilders and private sector developers—is the planning system. We have watched that system become increasingly underresourced and unable to hold its own in the negotiations with housebuilders that followed. We consistently get complaints that housebuilders do not come up with the quality that local communities deserve; that they come up with poor design; that they do not always build out the schemes for which they have planning consent; that they negotiate rather too successfully to keep down the amount of affordable housing they can build; and that often they attempt to renege on the agreements they have made with local authorities to produce affordable homes at the end of the process.

We need a strong planning system as our front line to ensure quality under those different headings. Can the Minister assure us that in the package, as well as getting more help under the quantity agenda, we will get more help under the quality agenda by ensuring that planning departments are better resourced and better able to hold their own against the housebuilders and developers of tomorrow?

Housing: Social and Affordable Rents

Lord Best Excerpts

Monday 11th September 2017 Lords Chamber

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord will be aware that there is a difference between social housing and social rents. The amount of social housing is something to which we have committed in the White Paper, and we are looking at that. As I indicated, we are discussing the situation in London with the London mayor. In the meantime, most social housing—about 94%, I think—is at social rents. The noble Lord referred to the borrowing limit. At the moment, there is plenty of headroom for local authorities in that regard, and there is no indication that it needs raising. We are obviously alive to the fact that in the future that might be the case but it certainly is not at the moment.

[Lord Best (CB)]

My Lords, has the Minister heard, as I have, the housing associations say with great regret that although they were founded to house the poorest people in society, increasingly they are having to move upmarket and are having to turn away the poorest households because rents have risen with lower grants and benefits have been cut? If the housing associations cannot house the poorest households, how can we expect private landlords to do so, and does not that simply mean more homelessness?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is absolutely right to raise the considerable housing challenge that we face. In the meantime, we are building more than has been built in the years since 2008. I think that we are now running at record levels in relation to new starts. The noble Lord is right about particular issues with people and affordability. We are analysing the consultation on the National Planning Policy Framework, which is about building in the right place. I believe that that will make a difference when we respond to that consultation.

Grenfell Tower Update

Lord Best Excerpts

Monday 3rd July 2017 Lords Chamber

[Lord Bourne of Aberystwyth]

I thank my noble friend for those perceptive points, which are on a broader front than the Grenfell fire situation or fires generally, about the nature of social housing in our country today. First, she will be aware that we are conducting a racial audit within government; I think that this is the first time this has ever happened. It has slipped back by perhaps a couple of months because of the election, but we are looking, across all government departments, at issues such as education, school places and housing allocation to see exactly what the stark figures are. One cannot really argue with the figures, and one would want to ensure that policies are properly framed with regard to those. Secondly, the Casey report is still very much work in progress—that is the report that was made to the Home Secretary and the then Prime Minister on issues of integration—and we will want to take that forward as well in the context of the racial audit. Therefore, my noble friend raises important issues. She asked a second question about bereavement support, which is being done by government departments. We are ensuring that it is in place and being used, and it is important that we do so.

[Lord Best (CB)]

My Lords, I have three quick questions about this ghastly tragedy. First, the Secretary of State has promised extra funds for remedial work that councils need to carry out. Am I right to assume that housing associations will be eligible for those extra funds in the same way as councils? Often housing associations now own the blocks that were previously council owned. Secondly, will the funds that go to councils—and, I hope, also to housing associations—for remedial work on other tower blocks elsewhere be new money, or will this money be drawn from the funding set aside for new development? It would be a double tragedy if we lost some of the new homes that we desperately need to see built. Finally, on the governance point, rather specifically about the particular arrangements in Kensington and Chelsea, will the inquiry look at the tenant management organisation’s relationship with the local authority? It is a rather unusual way of working, with the danger—I want to know whether the inquiry will tackle this—of things falling between the tenant management organisation and the council as the owner itself.

[Lord Bourne of Aberystwyth]

My Lords, I thank the noble Lord very much for those pertinent questions. First, on his question about remedial work and whether funds will be made available for local authorities and housing associations, my understanding is that that is the case. I will, once again, cover that in the write-round letter, but I believe it is the case. I believe also that it is new money—our targets on housing remain very much as they were—but, again, I will cover that in the letter. On the governance arrangements, I will ensure that this debate is made available to the judge, Sir Martin, so that he is aware of the discussions here. I would be surprised if that issue did not come up in discussion with tenants’ organisations, which he will be speaking with. However, the point is well made, and I will make sure that it is brought to the attention of the judge, as well as the whole of this debate.

Queen’s Speech

Lord Best Excerpts

Tuesday 27th June 2017 Lords Chamber

[Lord Best (CB)]

My Lords, my contribution to this debate considers those aspects of the gracious Speech that relate to the nation’s housing. Of course, I begin by saying how deeply distressed everyone concerned with social housing has been by the terrifying, horrifying tragedy of the Grenfell Tower fire. I join the many others stressing that robust building regulations clearly must come before cost-cutting and deregulation and, equally clearly, must be better enforced. In addition, I have three practical questions for the Minister.

First, in terms of the resources to make a number of other tower blocks safe, particularly in relation to external cladding, I know the Secretary of State has said that central government’s help and support to local authorities will include funding for remedial works. Am I right in assuming that the housing associations, a number of which have taken on the ownership and management of previously council-owned properties, can also expect to receive this new financial support?

Secondly, can we be assured that the resources for this important task will not be taken from the funding previously announced for the building of desperately needed new homes? Will the funds instead be additional, from new grants and/or from raising the cap on council borrowing for housing purposes and/or from ending the current compulsory 1% real reductions each year in rents, which have hampered spending on property maintenance and renovation?

Thirdly, was there a special accountability problem for Grenfell Tower because of the unusual governance structure adopted by Kensington and Chelsea, with ownership by the council and management by a separate tenant management organisation? Although a TMO should give greater opportunities for the voice of the tenant to be heard and heeded, this seems to have broken down completely in Kensington. Is the current inquiry considering whether the ownership and management framework in this case might have meant that decisions—to prevent a disaster as well as to deal with one—fell, catastrophically, between two parties, providing lessons for this particular governance model elsewhere?

To turn to other issues in the gracious Speech, I support in principle the Government’s plans to prohibit landlords and letting agents from charging fees to tenants, and I look forward to consideration of the details in the promised Bill. I also greatly welcome the Government’s commitment to improving the position of leaseholders, on which they will consult. Selling houses on a leasehold basis, with rapidly escalating ground rents, is only one of the scams that must be addressed.

The Government have also committed to seeing through their proposals to ensure that sufficient land is available for the building of their new target of 1.5 million homes by 2022. That is entirely right, but my anxiety is that too few of those new homes will be affordable to those who are on average and below-average earnings. That problem—exacerbated by disjointed policies on rents and housing benefit—will have to await debate on another day.

I conclude with some thoughts on the impact of Brexit on the Government’s plans for increased housebuilding. Housing depends on borrowing, so house buyers and housing developers are extremely vulnerable to economic instability and changes in interest rates. Housing is hit by a fall in the value of the pound because that means rising costs of imported building materials and imported labour. Could untoward economic effects of Brexit on housing be offset by reductions in EU inward migration? Of the household growth on which the Government’s housebuilding targets are predicated, 37% is attributable to immigration, so would less immigration from the EU enable the Government to lower its targets for new housebuilding? The Department for Communities and Local Government’s projections for the number of new homes that will be needed already assume a huge fall in net immigration—from 385,000 last year to just 170,500 by 2021. It seems most improbable that the total drop in migration overall will mean that the figures fall below those on which the current housing targets are calculated. Moreover, depending on the deal struck for Brits who live in the rest of the EU, and depending on the exchange rate, housing pressures may arise from some of those million-plus citizens returning to the UK.

Curbs on EU inward migration could affect the construction industry because of its abysmal record in recruiting and training an indigenous skilled workforce. The Construction Industry Training Board forecasts a deficit of 200,000 workers by 2020, following the retirement of 430,000 workers from 2010 to 2020. Any additional loss at this time from the 194,000 building workers who come from other EU countries—notably Poland—would certainly create serious difficulties. New apprenticeship schemes and even the prefabrication of homes in factories will not overcome the skills shortages any time soon. A transitional period for any limits on building workers from the EU will be essential if the housing that we need is not to take a serious hit. I trust that the Government will keep the nation’s vital housing requirements in mind as the great Brexit challenge moves on.

Localism Bill

Lord Best Excerpts

Monday 31st October 2011 Lords Chamber

[Lord McKenzie of Luton]

My Lords, as the noble Lord, Lord Greaves, has spotted, we have an amendment in this group which may be familiar to him. Frankly, particularly following the debate last week, we were concerned that something was not going to get on to the agenda for tonight, so we reached for a handy amendment and this one came within our view. We tabled it to make sure that we had a last opportunity to address issues concerning sustainable development.

I am comforted by what the noble Lord, Lord Greaves, has just said if it is his understanding that the Government’s intent is consistent with the contents of his amendment. We accept that definitions are not going to be included in the Bill but I hope that at least we shall be able to get very strong assurances that there will be full definitions in the NPPF. However, again I accept that the state of the consultation and what now has to happen will mean that the noble Baroness cannot be as fulsome as she would perhaps wish to be.

Notwithstanding that, I should like to hear from the Government more precisely where they stand on sustainable development. We have had assertions in the past that Brundtland and the 2005 strategy still hold sway, yet some of the wording in the draft NPPF document seems to countermand and undermine that. Therefore, when the noble Baroness responds, can she tell us whether it was the Government’s intent to change the balance of that 2005 Brundtland sustainable development approach or whether it was just due to inconsistencies and lack of clarity in the wording? If the consultation took the Government in a direction of supporting more growth at the expense of other pillars of the approach, is that something that they would resist? Where is their core on this? Is it Brundtland in 2005 and is the issue making sure that that is comprehensively dealt with in a consistent and coherent manner in the NPPF, or is it open for change? If it is open for change, what is the Government’s view on what the direction of that change should be? It will be interesting to hear what the Minister can say on that.

[Lord Best]

My Lords, perhaps it would be valuable to noble Lords to hear the views of the Local Government Association. I declare my interest as its president. The LGA believes that sustainable development can only be defined locally. Indeed, sustainable development makes sense only at a local level, as set out in the definition of sustainable development at the beginning of the national planning policy framework. There must be a balance between economic, environmental and social issues and locally elected councillors must have the flexibility to make the necessary trade-offs locally. In relation to guidance from central Government, the LGA maintains that the NPPF should make clear that it will be for the local plan to set out what sustainable development means for the local area and for the development that it will require.

[Lord Howarth of Newport]

My Lords, the noble Lord, Lord Best, and the LGA are surely right that sustainable development must be interpreted locally and in the end you can only determine what it means in relation to local circumstances. However, I agree with both noble Lords who have spoken in the debate that it is important that the Government should fill out their definition, or at least their understanding of what is intended by sustainable development. The Brundtland definition is so high level that it leaves too much scope for varying interpretation. In the absence of specificity and rather fuller detail in the way in which the Government have set forth this policy, there is space for all sorts of anxieties to grow. Those anxieties have been intensified by what the Chancellor of the Exchequer said in his Budget speech when he referred to the planning system as being a “chronic obstacle to growth”. That is a profoundly misplaced analysis. Whether or not the planning system has played some part in obstructing growth over the years, what matters now is that a lot of people in this country are anxious about the Government’s intention. While they may possibly acquit CLG of desiring to concrete over the countryside and so forth, they have anxieties about the Treasury’s reading of the situation and intentions. I think that they feel the Treasury would be too ready to see the protections that the planning system has historically given to our countryside to prevent inappropriate development being swept aside. The more desperate we become to achieve economic growth the more reckless they fear the Government may be over those protections.

The Government would do themselves a good turn and would allay a great deal of anxiety that I am sure in reality is needless if they would undertake to clarify and amplify their intentions in committing themselves to promoting sustainable development. Like other noble Lords I do not think that it is appropriate to attempt a full definition on the face of primary legislation because, as we have noted, the understanding of sustainable development has itself developed over the years and will surely continue to do so. It seems that the right place for that is guidance, whether in an expanded section of the NPPF or perhaps in greater detail in fuller supplementary guidance that I continue to hope the Government will issue to support the NPPF because, admirable as I believe most of its tendencies to be, it is too high level and leaves too much scope for ambiguity and doubt.

There is not only anxiety but the danger of legal conflict and uncertainty among all concerned. I think that it would be very helpful if the noble Baroness were able to say that the Government have made up their mind firmly that they will provide a fuller explanation and definition of what they intend by sustainable development.

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The Government have emphasised the importance of the local plan but lack of fair transition arrangements will mean that it can be undermined and brushed aside at the start of the new planning arrangements. If the Government see this as presenting a window of opportunity for a dash for development, I suggest that this would seem to be misguided. Developers may just pocket the decisions and take them up when market conditions improve. But I hope that we can get an assurance from the Minister that, even if it is in the NPPF rather than in legislation, there will be fair transitional provisions and all local planning authorities will be given the opportunity speedily to ensure that their local plans are up to date, reflective of the final NPPF and consistent with the duty to co-operate. Such an assurance would provide comfort to those who have genuine concerns about what will happen once the NPPF comes into being. Concerns that incomplete local plans with a presumption in favour of sustainable development and an NPPF written in imprecise and conflicting language are a toxic mix which undermine the Government’s intent. I beg to move.

[Lord Best]

My Lords, in Committee and on Report, I tabled amendments on transitional arrangements. I agree that it is imperative that local plans are in place as soon as possible but councils must have adequate time and resources to put in place sensible plans that conform to the new NPPF and ensure that local needs are met and local people have a say in the development that affects them. This will require clear transitional arrangements so that citizens, councils and developers have certainty about when and how the presumption of sustainable development will apply. Those areas that have invested a significant amount of time and resources in getting an up-to-date local plan in place prior to the changes should not be required to go through the process again or to face further delays. It is important that any process for registering conformity is light touch and swift.

I have been pleased to hear from the Royal Town Planning Institute that progress is being made in making transitional arrangements. I know that the Local Government Association is also part of the process of working with the Government on this. I feel sure that the Minister will be able to confirm that appropriate arrangements will be put in place quickly and I look forward to hearing her response to the sensible points raised by the noble Lord, Lord McKenzie.

[Lord Greaves]

My Lords, I congratulate the Labour Party on writing such a brilliant amendment. The interesting thing about transitional arrangements is that when the Bill came to your Lordships’ House, they were not being talked about at all. The view was that in six months it could all be sorted out. The more it has been discussed in this House and with Ministers, the more it has become clear to everyone, including those of us who raised it tentatively at first, that it is an extremely important issue. Getting it right is crucial to the transition from the present system to the new system. The good news is that I believe that the Government, particularly the planning Ministers, now understand that. The bad news is that they have not yet produced a clear plan for that transition and how it will work. I believe that it is being thought about seriously across government.

Whether or not it should be in the NPPF is an interesting question. Originally, we were told that it did not need to be in the Bill because it could be in the policy framework. The more some of us think about it, the more complex it is and the policy framework may not be the best place for it—certainly not for most of it. It is so complex and requires so much detailed and substantive guidance to planning authorities on how to cope with the transition that it probably will need separate guidance. I do not think that this would in any way undermine the Government’s wish to bring the total of planning policy guidance down to around 50 pages, although I think that it will be a bit more than that when it comes out. The point is that, by its very nature, guidance on the transitional process will be temporary; it will come and then it will go. That is another reason why perhaps it should not be in the NPPF but should be separate guidance to local planning authorities in some detail as to how to cope.

Going back to another anecdote, I am reminded of the following phrase, which I learnt from Professor Danny Dorling:

“Anecdote is the singular of data”.

In this case I think it genuinely is.

I am about to read from a Pendle Council press release, not for special pleading but because I believe it is typical of the position that very many local planning authorities are in at the moment. I received the press release on Tuesday, headed “Six week consultation on Pendle’s most important planning document”. It says:

“It’s the final chance for Pendle residents to comment on a document that will influence how Pendle changes in the years to come. A six-week consultation starts on Friday 28th October on the Core Strategy”.

Then it explains what is in the document and what its purpose is. It continues:

“Between now and Monday 12th December you can view a draft version of the Core Strategy”,

at various council outlets and libraries throughout Pendle or, alternatively, on the website. It goes on to say:

“During the six-week consultation, planning officers will be attending a series of drop-in sessions in different parts of Pendle”.

That is what that glossy leaflet was all about. I think there are 10 or 12 of those taking place. It is a big consultation operation and exercise. It then says:

“A display will also be available to view at Nelson's Number One Market Street”—

which is the council’s call-in centre—

“for the full six weeks”.

The councillor who looks after planning issues in Pendle says:

“‘The Core Strategy will set out the overall approach for planning and development in Pendle for the next 15 years, so it's essential that residents make their views known before it's finalised … This is your final chance to help shape the future of Pendle’”.

Then I thought: this is all going ahead. The council quite rightly, I think, decided to continue going ahead with the production of its local plan as quickly as possible despite the presence of the Localism Bill casting a shadow over all these operations. This is really localising and turning into an anecdote some of the broad questions that the noble Lord, Lord McKenzie, asked. Will Pendle Council and lots of other councils around the country have to start again when this Bill comes into effect? To what extent will they have to go back and revisit their evidence base for their local plan? To what extent will they have to go back to the core strategy—which is 200 to 250 pages thick, I would guess—and rewrite it? To what extent will the whole process now be put back by six or 12 months? Will this quite intensive consultation process all have to be done again at this time next year perhaps? Those are the kinds of practical questions that councils all over the country are facing. They need very clear guidance on the transitional period from the Government as quickly as possible.

I think that this is my last speech on this Bill. There may be sighs of relief around the House. I have already thanked the Minister, her colleagues and the civil servants on the Bill team for their great kindness and for the assistance that I and my colleagues have had. I also want to thank people around the House. I thank the noble Lords, Lord McKenzie and Lord Beecham, on the Labour Front Bench for their very sensible and constructive approach to the Bill. I may be doing severe damage to their career prospects within the Labour Party by saying that, but I think it needs to be said. We have worked with them and discussed things with them. We have not always agreed, but the amount of co-operation that there has been around the House on the Bill has been to the advantage of the House and to the advantage of the Government in that when the Bill leaves very shortly now, it will be a very much better Bill than when it came.

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[Lord Tope]

My Lords, as the noble Baroness has just said, the Minister has moved a long way since we last debated this. We all accepted the strong desirability of resolving these matters locally whenever possible, but we realised during or even before that debate that it had an unintended consequence of giving the designated person the right of veto. I do not think that that was what the Government intended and I am pleased that they have recognised that, and that it has been removed. Once again, I thank the Minister for not only listening but for acting. At this late hour at this very late stage of the Bill I do not propose to debate further whether it should be six or eight weeks. I am just glad that we have got to where we have.

[Lord Best]

Once again the House of Lords consideration of this Bill has led to a really sensible change to the legislation. I congratulate the noble Baroness, Lady Hayter, alongside the noble Lord, Lord Newton—I have supported these amendments all the way—on persuading the Minister who I know has handled this with great distinction. On behalf of all the organisations which have been extremely worried about this and all the people whose complaints will now be better handled, I thank the Minister very much.

[Lord Kennedy of Southwark]

My Lords, I thank the noble Baroness for moving the amendments. They are a work in progress. I also thank my noble friend Lady Hayter for her amendment which would reduce the period before referral from eight to six weeks. I hope that the Government will accept my noble friend’s proposal.

I never really got to the bottom of why it was such an issue for the Government. Looking back to the debate on Report, it was not only Members from the Labour Benches who expressed such concerns but Members from all sides. I have always thought that the democratic filter would do nothing to improve the process of enabling tenants to resolve their complaints. The Government’s proposals allow a tenant with a complaint direct access to the ombudsman after going through a process or on the refusal of a designated person to send it on.

When the noble Baroness responds to the debate, will she say how the ombudsmen satisfy themselves that either of the two conditions for direct referral have been met? I hope that that will be something very simple, such as the copy of a letter or an e-mail confirming that the complainant has gone through the process and the period of time has elapsed, or the refusal of a designated person, as I do not want to see added burdens on the complainant.

At this point, I would like to add my thanks to the Minister, other noble Lords on all sides of the House and the Bill team as we draw to a close on this Bill. This is the first Bill on which I have contributed to your Lordships’ House’s discussions from the Dispatch Box. It has been an interesting learning curve for me. I hope, in particular, that I have been of assistance to my noble friends Lord McKenzie of Luton and Lord Beecham. I again thank the Minister for bringing these amendments back. They are very welcome.

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Moved by

[Lord Best]

84: Schedule 10, page 365, line 38, leave out “either” and insert—
“( ) that the draft order is made by the authority, or”

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[Lord Best]

My Lords, I am very pleased to be moving and speaking to the very last amendments to this Bill, after our many months of discussing it. This gives me the chance to say to the Minister, to the Ministers who have supported her, and indeed to the government Ministers in another place, that this Bill has been enormously improved during its House of Lords stages. Indeed, the key role of this House in scrutinising legislation has been wonderfully illustrated by the progress of the Localism Bill.

I have been given a list of 10 major issues that were originally of considerable concern to the Local Government Association, for example, and on which that body, representing local authorities up and down the land, now feels reassured and to a very large degree satisfied with the legislation as it now appears. The same kind of list could have been devised by a number of external agencies, with the same satisfaction rating at the end of that. It has been a long slog, with meetings all through the Summer Recess, and Ministers have worked incredibly hard. The outcome is a Bill that has been transformed. Both thanks and congratulations are in order, very much including congratulations to the opposition Front Bench, and, if I may say so, to the noble Lord, Lord McKenzie of Luton, in particular, who handled this process with great care, courtesy and skill to very great effect, and to the efforts of external bodies that have made their representations to us so helpfully and so effectively.

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[Baroness Hanham]

My Lords, before we get lost in the fact that we are nearly there, I will answer the noble Lord, Lord Best, briefly, but I hope satisfactorily. I want to make it clear that local authorities can use existing planning mechanisms to take forward planning proposals that a neighbourhood forum or parish council has produced without needing to hold a referendum. The draft neighbourhood plan policies can be taken forward by the local authority as a development plan document which is subject to independent examination but not referendum. Similarly, the permissions in the neighbourhood development order can be taken forward as a local development order which is subject to neither independent examination nor referendum. So both development plan documents and local development orders are required to be subject to appropriate and effective consultation.

However, it is an underpinning principle of this Bill that a parish council or neighbourhood forum should always be able to ask the wider community to decide in a referendum whether a neighbourhood plan or order should come into force. Therefore, neighbourhood development plans and neighbourhood development orders, which are tools that the Localism Bill introduces for planning at a neighbourhood level, will always be subject to a referendum of the neighbourhood. The referendum gives everyone in the community the opportunity to have their say and demonstrate evidence of community support in a manner that cannot be demonstrated through a petition or consultation.

Local authorities that work effectively with their communities in planning at a neighbourhood level will be in a good position to decide whether to take emerging proposals through the development plan or local development order route, but it has to be right that if a local community wants it, it can use the power in the Bill to prepare a neighbourhood development plan or order and ensure that the wider community has the final say in a referendum. The removal of that right would undermine one of the core building blocks of neighbourhood planning as envisaged in the Localism Bill.

With those reassurances and clarifications, I hope that the noble Lord will be willing to withdraw the amendment.

[Lord Best]

My Lords, I am delighted to withdraw the amendment.

Amendment 84 withdrawn.

Localism Bill

Lord Best Excerpts

Monday 5th September 2011 Lords Chamber

[Lord Whitty]

My Lords, in moving Amendment 38 I shall speak to the other amendments in the group. We have come to the housing revenue section of the Bill and my amendments would delete the lot. I suspect that if the Chief Whip were in her place she would say that I am using Committee procedures because potentially I am using a clause stand part Motion to get some clarification of the Government’s intentions. In other words, this is a probing amendment and I do not expect to seek a vote on it. Indeed, I think I probably support the general direction of government policy in this area. However, it is an area that was not discussed at all in Committee and is one in which, to my knowledge, in all the copious material that the Minister has provided for us, we have not had a comprehensive statement of the Government’s intention. Perhaps I missed it, but I have not seen a clear statement of where we are going on housing revenue.

Housing revenue means two different things. It means the allocation between housing authorities so that some are losers and some are winners in a national reallocation process that seems in part to be reproduced in these provisions, and it is a protection at the individual local authority level to ensure that rental and other income received for housing purposes is actually recycled for those purposes. That protection is not always quite adequate, but nevertheless it is part of the long-existing provision. On previous occasions when housing revenue stipulations have been significantly changed, there has been a whole Bill that has gone through a number of procedures. Here we are squeezing them into a very large Bill in which, to my mind at least—although again I should say that I may have missed it—the Government have not spelt out their intentions. The last Government made a start on this, and by and large I approved of the Minister’s approach, but I have not seen a similar comprehensive statement of where we wish to end up.

There are a lot of complicated provisions here, particularly in regard to the formal abolition of subsidy to the balance between what the Secretary of State allocates to different authorities. No new formula has been proposed, but neither is it clear that the old formula will still operate. One has to say that the old formula was pretty opaque and gave rise to some disgruntlement in a number of local authorities. The Government owe us a clear explanation of where we are going on the housing revenue account, and if it already exists I would be grateful for it. If not, I am happy for the noble Baroness to write to me in the interval between now and Third Reading, but I do not think that this House should let what could be a major strategic redirection on housing revenue provisions pass without comment.

Some of my colleagues have tabled detailed amendments, but my amendments are intended to give the Government an opportunity to explain what their strategy is. At least the position will then be clear so that by Third Reading we can decide whether we agree with it or not. Given the way I am trying to use these amendments, I hope that the noble Baroness will take them as they are intended, in a spirit of inquiry, and give us greater clarification. I beg to move.

[Lord Best]

My Lords, the amendments of the noble Lord, Lord Whitty, would leave out a whole series of clauses that relate to the housing revenue account. I have added my name to Amendment 46, which would leave out just one of those clauses. That implies that I am happy with the others, as indeed I am.

The housing revenue account is regarded in local government circles as well past its sell-by date and there is general acclaim for its abolition. It is a significant aspect of the localism agenda that financial responsibility for council housing is to be put back into the hands of councils. In place of pooled debt and pooled rents, each council involved will henceforth assume direct responsibility for housing debt according to its ability to repay it, and it will keep all the income from rents for managing and maintaining its own council stock. Efficiency gains on its rented account will go back into improved housing provision. These are helpful reforms, but they stop well short of giving councils the full financial independence that could enable proper asset management of their housing resources and harness significant prudential investment in new homes. These freedoms are enjoyed by even the smallest housing association.

Amendment 46, in leaving out Clause 158, would remove the restriction on councils that want to borrow prudentially—knowing that they can repay what they borrow—for housing purposes. When councils move to a self-financing regime with the housing revenue account buyout on 1 April 2012, they will face new restrictions on borrowing for housing purposes—a new capping regime—despite the continued presence of the prudential code that has operated perfectly well since 2003. The chairman of the Local Government Group points out that it has demonstrated on many occasions that councils have a strong record of sound financial management and manage borrowing responsibly in accordance with the prudential code. He says that local government’s view is that these rules to which it adheres provide sufficient protection that councils will undertake only borrowing that is affordable, and that imposing a cap on councils’ ability to borrow for affordable housing will severely restrict their ability to invest in an increased number of affordable homes, which government wants to see. Paradoxically, housing associations are being encouraged at exactly the same time to borrow a lot more to replace the shortfall resulting from smaller grants. A lot of housing associations are borrowing more, but not councils, which must accord with the new cap. The Local Government Group says that it hopes that if government will not remove the new cap, Ministers will at least consider committing that local government will be properly consulted in determining the level at which the cap is to be set for each authority to allow some crucial further investment on a sustainable basis. I support the removal of the clause as proposed by Amendment 46.

[Lord McKenzie of Luton]

My Lords, I suppose that there are not many people who like to collect together at this hour to discuss local housing finance, but it falls to us to do it. We understand that the amendment of my noble friend Lord Whitty is probing in nature to try to gain an understanding of where the Government currently stand on this issue. If I have to be fair to the Government—I try not to be—I think that they have been quite active in putting out consultations; there is one due in November if my understanding about the final figures which will be debated with local government is correct. Of course, they have built on the prospectus that was issued in March last year under the previous Government.

As with the noble Lord, Lord Best, we support the thrust of most of these clauses except for Clause 158. They provide the framework for the self-financing scheme for local authority housing stock which will replace the existing housing revenue account subsidy system. As noble Lords have recognised, the current subsidy system is based on a range of assumptions about local authority housing stock, covering rental income, maintenance and management costs, costs of service in debt and of major repairs. An authority will either receive a subsidy from the notional calculation if it was in deficit or pay to the Exchequer amounts when the calculation showed a surplus.

When the current subsidy system started, no local authority was in surplus but, as I understand it, by 2008-09 the system overall had tipped into surplus with the aggregate of amounts paid to the Exchequer exceeding the aggregate of subsidy payments. The reforms reflected in these clauses were initiated by the last Labour Government. As my noble friend recognised, the current system had become a source of discontent for a variety of reasons, particularly because it is complex and lacks transparency, with changes from year to year making it difficult to plan effectively over the long term. We believe it is right to change that, which is why we support the thrust of these amendments.

The reform consulted on by the previous Government involved a devolved, self-financing system where there is no redistribution of revenues in return for a one-off allocation of debt to local authorities. This allocation would be based on each authority’s ability to service the debt and maintain its housing stock. In essence, this represents a deal between central government and local authorities. In return for allocating excess debts to local authorities, the latter will obtain greater spending power over the long term through retention of future rent increases. It represents a transfer of risk from the Government to local authorities.

My noble friend Lord Whitty will doubtless recall that the proposition for a self-financing regime proposed by the then Housing Minister, John Healey, included the one-off distribution and allocation of housing debt. All rents and receipts from the sales of housing and land in the HRA were to be obtained by the local authorities, with rental income to be based on current rental policy—that is, convergence with standard housing association rents by 2015-16. The housing stock would be valued using the 7 per cent discount rate. The latter component in particular—the 7 per cent discount—would have given local authorities headroom to be able to fund 10,000 new council homes each year.

Noble Lords will be aware that the principle of moving to a self-financing regime was overwhelmingly supported by local authorities. As these clauses make clear, the coalition Government are proceeding with the self-financing option and the basic method of debt allocation is to be as set out in the March 2010 prospectus—that is as I understand it but the Minister will tell me if I am wrong.

However, there are some differences and some major concerns, which are reflected in subsequent amendments. In particular, the discount rate to be used is 6.5 per cent not 7 per cent. This may seem a small difference but the effect is for central government to be some £1.2 million to the good and to remove much of the headroom that would have been in the system for building additional council housing. As the noble Lord, Lord Best, has said, the plan to cap the overall borrowing of each authority at a level linked to opening debt runs contrary to the spirit of localism and the self-financing concept.

We would argue that central government already have powers under the Local Government Act 2003. I should be grateful if the Minister could specifically deal with this. Section 3 of that Act talks about a local authority determining and keeping under review how much money it can afford to borrow. Section 4 gives the Secretary of State, by regulations for national, economic reasons, power to set limits in relation to the borrowing of money by local authorities. If that is on the statute book already, we do not need Clause 158. I agree with my noble friend and with the noble Lord, Lord Best, that that should not stand part of the Bill.

As for rents, retaining the approach of convergence with RSLs by 2015 is all very well, but the impact of changes to housing benefit, the urban benefit cap, the non-dependant reductions upratings and the 2013 room- size criteria for the working-age tenants create additional uncertainty and risk. Reversal of the plans for local authorities to retain all the receipts from right to buy should not be accepted, and we will debate that shortly.

Although my noble friend is right to challenge these provisions, we consider that it is right for the self-financing regime to proceed. However, as ever, the devil is in the detail and we look forward to an update from the Minister.

Localism Bill

Lord Best Excerpts

Thursday 14th July 2011 Lords Chamber

[Lord True]

I have taken some part in this Bill and, on the basis of having spent 13 rather misspent years in the usual channels, I heard what my noble friend Lord Lucas and others have said about potentially sitting on another day. As other noble Lords have said, I would be very willing to do that to make progress on the Bill. I did not hear the noble Lord opposite express similar willingness.

One thing that I looked up, which might be helpful to these discussions, is what has happened in previous years. This is in fact the earliest date on which the House would rise in July since and including 1996, apart from 2003. If one looks at three separate years after the party opposite formed a Government, in 1998 we were asked to sit until 31 July and noble Lords on this side co-operated; in 2002 we were asked to sit until 30 July and noble Lords on this side co-operated; and in 2006 we were asked to sit until 25 July and noble Lords on this side co-operated. I do not think that it is unreasonable to ask noble Lords opposite to show the same willingness as noble Lords on this side have to allow the usual channels some flexibility in considering not only sitting late but perhaps allowing an extra day to complete this important Bill.

[Lord Best]

Perhaps a word could be said from the Cross Benches, too. I have quite a lot of the amendments that might detain us further on. Although we must all accommodate whatever the usual channels decide, it is quite late notice for next Thursday suddenly to be removed from our diaries when we had every reason to expect to be on Recess at that time and had other plans. I, for one, would be letting down an awful lot of other people, which I may have to do if we have to sit next Thursday. If it is of any help—and I am sure that we all have our different preferences—I would be quite prepared to go into all hours of the night on Wednesday night and will try to remain fresh, if that is required of me.

[Lord Shutt of Greetland]

My Lords, I thank noble Lords for their contribution. It is not easy, because we had no idea of the exact time when the earlier Bill would conclude today. There were great expectations that there would be a serious amount of time to discuss localism today, but noble Lords in regulating themselves felt that it was important to consider the previous Bill. Those who have been observant will have seen that various noble Lords have been talking off the Floor of the House, as others have been talking on the Floor. If we could make a start on the Localism Bill now, even though there are only 22 minutes before seven o’clock, we could do one or two amendments. That would be sensible.

The usual channels can channel away a little longer and, I hope, make a statement before we conclude tonight. We do have it in our diaries to come here on Monday, Tuesday and Wednesday. The prospect has been put—