Houses of Parliament: Co-location

Lord Best Excerpts

Thursday 16th June 2022 Lords Chamber

[Lord Best (CB)]

My Lords, I thank the noble Lord, Lord Norton of Louth, for giving us this chance to debate the importance of the collocation of both Houses of Parliament and for his brilliant opening speech.

My contribution to today’s debate is in two parts: first, an illustration from my diary of parliamentary engagements that demonstrate the interconnectedness of the two Houses; and secondly, a commentary on the Secretary of State for Levelling Up’s suggestion for the relocation of the Lords. I make this second point from my perspective of representing your Lordships’ House on the restoration and renewal sponsor body.

First, this is my personal illustration of the extensive connectedness of the two Houses. This was the subject of a note I sent to the Lord Speaker when thanking him for his response to Secretary of State Michael Gove’s suggestion of a move for the Lords to the Midlands or the north of England. On that day of writing—16 May —I attended the following meetings that involved both Peers and MPs: a lunchtime presentation in the Lords by the International Energy Association’s chief executive —I am president of the Sustainable Energy Association; a meeting of the All-Party Parliamentary Group on Park Homes chaired by Sir Christopher Chope MP—I piloted the Mobile Homes Act 2013 through your Lordships’ House; the AGM of the adult social care APPG chaired by Damian Green MP, of which I am a vice-chair; and a reception in the Churchill Room for the National Custom and Self Build Association, hosted by Richard Bacon MP and attended by Michael Gove—I piloted the Self-Build and Custom Housebuilding Act through the House of Lords in 2015.

The following day, I attended a breakfast meeting for Peers and MPs of the Industry and Parliament Trust on tackling the housing crisis, then a meeting of the Lords Select Committee on the Built Environment. Although this is a Lords committee, from time to time it requires the presence of government Ministers from the Commons, who clearly need to be close at hand. On this day I also attended the AGMs of both the Land Value Capture APPG and the Fuel Poverty and Energy Efficiency APPG, attended by Peers and MPs. In the evening I hosted an event on the repeal of the Vagrancy Act 1824, attended by Members of both Houses.

Over these two fairly typical days, I was involved in eight meetings that brought together Members of both Houses, plus a session of a Lords Select Committee that periodically needs the attendance of a government Minister from the Commons. I think everyone accepts that holding all these joint meetings online, not in person, would hugely diminish their value, yet obviously this intertwining of face-to-face engagements of Members of both Houses in events, meetings and discussions could not possibly happen if the Lords and Commons were not located in accommodation very close to each other.

Moving to my second contribution in support of the case made by the noble Lord, Lord Norton, perhaps I could offer a more direct commentary on the proposition from the Secretary of State, Michael Gove, on moving the upper House to a city elsewhere. Alongside the noble Lords, Lord Carter and Lord Deighton, and the noble Baroness, Lady Doocey, I am a board member of the Restoration and Renewal Sponsor Body and I have the responsibility of reporting to your Lordships’ House on behalf of the board as a whole. Any opinions I express today are entirely my own, not those of the board, but there are some points to share on the current position that affect any decant of the Lords to an alternative location outside the Palace of Westminster.

The two House commissions have agreed the principles of a new approach to saving the Palace, which involves taking the sponsorship role in-house and providing a range of different options for restoration and renewal. To interpret the House commissions’ report for the noble Lord, Lord Young, and others, I think the new proposals incorporate the following changes.

The R&R programme, as initially envisaged and as set out in the Parliamentary Buildings (Restoration and Renewal) Act 2019, will not now proceed. In place of a comprehensive programme of major works, the delivery authority is being asked to bring forward a selection of more modest ideas—an incremental approach to the works—which probably means a series of consecutive minor upgrades. This is fundamentally different from the previous strategy.

The proposed presentation of a comprehensive, costed business case for a vote by both Houses, scheduled for the summer of next year, is put back. The plans for decanting both Houses so that extensive works could proceed have not been progressed for several months. I detect no progress in persuading MPs of the necessity to move out to facilitate the mammoth task of upgrading the basement’s frightening tangle of sewerage pipes, electrical cables, et cetera, and I see no prospect for many years of Members of either House or both decanting anywhere voluntarily.

Despite governance performance deemed exemplary, the sponsor body established to oversee the process is to be disbanded as soon as possible. Meanwhile, our excellent chief executive will leave next month, and three other senior employees have already gone.

The changes will require legislation to amend the 2019 Act and the views of both Houses will be sought, perhaps before the Summer Recess. Whatever emerges from those debates, the issue of relocating the House of Lords to another venue, whether near or far, has been delayed indefinitely.

Some see this as a victory for those who were keen to kick the can way down the road and avoid facing the public with a large bill and troubling Members with a requirement to decant. Others see the new arrangements as preventing a train crash next year when the full R&R programme might well have been derailed by the House of Commons refusing to approve the business case for it and the consequent decant. Others see the changes leading to greater disruption, greater cost and a longer timescale for a programme that, in the end, will have to return to the necessity of a full-scale decant.

However matters turn out in the long term—it may now seem that the decant venue issue has receded—I fear that the unanswerable case made by the noble Lord, Lord Norton of Louth, may still be of urgent interest if the changes now proposed lead to greater risks of a major fire, falling masonry, asbestos poisoning or other serious incident. In concluding, I echo noble colleagues in expressing deep appreciation to the noble Lord, Lord Norton. I look forward to debating, in the next few weeks, the proposed changes to the R&R legislation.

Procurement Bill [HL]

Lord Best Excerpts

2nd reading
Wednesday 25th May 2022 Lords Chamber

[Lord Best (CB)]

My Lords, my contribution relates to the Bill’s impact on registered providers of social housing—bodies involved in contract procurement worth billions of pounds each year. The sector is a key contributor to easing the housing crisis by building tens of thousands of new homes, helping to fix the building safety disaster and undertaking day-to-day works to ensure residents in social housing have decent homes, while addressing the climate crisis and seeking to implement an ambitious decarbonisation strategy.

I want to raise one factual question, one issue of principle and one point of practical detail. First, am I right in assuming that the definition of public authorities, which clearly covers the non-profit registered providers of housing—housing associations, in common parlance—also covers the new breed of for-profit registered providers? The latter can obtain government grants and are subject to regulation by the Regulator of Social Housing. Indeed, their profit-making ethos may demand increased regulatory attention, compared with the non-profit providers, but are they classified for the purposes of this Bill as public authorities?

Secondly, my overarching point of principle concerns one way in which the procurement process can determine the success or failure of a contract. I have received excellent briefings from the specialist law firm Trowers & Hamlins. The view of experts in this field is that the use of current relative price models drives a race to the bottom. As many noble Lords have pointed out, a key objective of the Bill is to maximise the public benefit of contracts. But the current process actually leads to a narrow interpretation of best value which translates into awarding the highest marks to the tender with the lowest price and downplays the real benefits of other, more expensive but more advantageous bids. Even if the weighting split between quality and price favours quality, the evaluation model gives preference to the lowest price. In effect, the public sector asks bidders to guess the lowest price to win—not the actual price they think is necessary to perform the contract properly. Such an approach can undermine the relationship between client and contractor. From day one, the contractor must look to cut costs and retrieve its profit margin. This leads to conflict and loss of quality, innovation, investment, apprenticeships and safety.

The UK Construction Playbook already acknowledges the harm caused by such pricing models. This acknowledgement needs to flow into the Procurement Bill and its associated guidance. The Bill already requires scoring methodologies to be described in the tender documents. I suggest that this obligation incorporates provision to prevent these unhelpful “relative price models” from being used by public authorities when procuring contracts that should prioritise safety, quality and value.

My third and final point is about a grey area in the world of public procurement to which my noble friend Lord Aberdare has drawn attention. This relates to the fees charged by procurement consortia that offer a service to bodies such as housing associations that are not confident of their compliance with all the statutory regulations governing procurement. These organisations make sure that all the necessary requirements are met—for which they charge a fee that can add anything from 3% to 10% to the cost of the contract. While larger housing providers such as Places for People—which has explained the position to me—have in-house expertise to perform this role, smaller operators are spending millions of pounds hiring these intermediary bodies.

The practical point I want to leave with the Minister is that these procurement consortia should not be operating—as some are—under a cloak of commercial secrecy. Since taxpayers’ money is involved, surely the Bill should require these transactions to be fully disclosed, proportionate and used solely in the public interest.

In conclusion, are for-profit registered providers covered by the Bill? Can unintended preference for price over social value—currently built into most evaluation models—be prevented through this legislation for those contracts which have quality, safety and value at their core? Will the Minister look at mandatory transparency for the fees charged by procurement consortia to ensure that they are used solely in the public interest?

Covid-19: Debt Collection

Lord Best Excerpts

Thursday 23rd July 2020 Lords Chamber

Asked by

[Lord Best]

To ask Her Majesty’s Government what action they are taking to reform debt collection processes (1) during, and (2) after, the COVID-19 pandemic in response to (a) the report by the Centre for Social Justice Collecting Dust: A path forward for government debt collection, published on 26 April, and (b) representations from Citizens Advice, the StepChange Debt Charity and the Money Advice Trust.

[The Minister of State, Cabinet Office (Lord True) (Con)]

My Lords, we welcome the Centre for Social Justice report and look forward to advice sector representations. We responded to Covid-19 by pausing outbound debt collection and on 29 June published a call for evidence to inform post-Covid policy in this important area. Central Government have for some time had a debt strategy that advocates the use of the widely welcomed fairness principles. Each local authority, however, is responsible for its own autonomous interpretation of the relevant debt management legislation on, for example, council tax enforcement.

[Lord Best (CB) [V]]

I thank the noble Lord for his positive response. A debt management Bill would establish clear protocols and an independent regulator for bailiffs as proposed by the Centre for Social Justice and others. Does the Minister agree that heavy-handed debt collection processes, principally by some local authorities owed council tax, are costly, ineffective and often ruinous for those concerned? Will the problem not get much worse post Covid, if we do not act now?

[Lord True]

My Lords, as the noble Lord will know, action was taken in 2014 in relation to enforcement agents. This is an area under examination. We have recently launched the call for evidence to inform policy, as I mentioned. That will obviously influence the consideration of whether a debt management Bill is a proportionate and reasonable response.

Social Housing

Lord Best Excerpts

Thursday 31st January 2019 Lords Chamber

[Lord Best (CB)]

My Lords, I thank the noble Lord, Lord Whitty, for this debate. I congratulate the noble Baroness, Lady Osamor, on her powerful maiden speech. I draw attention to my housing interests on the register.

I spoke last week about social housing in the valuable debate introduced by the noble Lord, Lord Scriven, so I will concentrate today on a single issue: land value capture. Sir Oliver Letwin, in his radical report of last December, recommends that for future large sites local planning authorities should have the power to acquire sites at a maximum of 10 times their existing use value—for example, not £1 million or £2 million an acre but, say, £80,000 or £100,000 an acre. This would make it possible to provide thousands more genuinely affordable homes without frightening the Treasury.

The authority would create master plans and design codes. To deliver those, it would deploy a special development company to put in the infrastructure of the land being parcelled out, with individual parcels sold to builders and social housing providers to create housing of different types and tenures. Sir Oliver recognises that when landowners are unwilling to sell on these terms, compulsory purchase will be necessary.

The current CPO system needs overhaul, not least because it requires, under the Land Compensation Act 1961, that the valuation of sites subject to compulsory purchase must include “hope value”—the prospective uplift which could follow from a change of use. To achieve the Letwin model, a new Act of Parliament to amend the 1961 Act will be necessary. In the meantime, can land value be captured in any other ways?

The Mayor of Cambridgeshire and Peterborough, James Palmer, is doing deals with landowners to secure sites at just eight times agricultural value, rather than 100 to 200 times, and the mayor will switch locations for development if landowners are recalcitrant. However, planning decisions will often be pre-empted by infra- structure constraints, emboldening some landlords to hold out for wildly inflated prices.

An alternative opportunity is to use legislation that already exists. In 2016 and 2017, the noble Lord, Lord Taylor of Goss Moor, and I secured two amendments to planning Bills, with government support. These retain the still operative power in the New Towns Act 1946 which enables the Secretary of State to acquire land for a new settlement at existing land value, and now gives that power to development corporations set up by local authorities.

The Government are now canvassing bids from councils to use this route to capture land value and create sustainable mixed-tenure new communities. These can demonstrate that, if only land value can be captured, all our housing developments could be far better and far more affordable social housing could be created without overwhelming the public finances. An update on this issue from the Minister would be much appreciated.

Tenant Fees Bill

Lord Best Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 20th November 2018 Lords Chamber

[The Earl of Lytton (CB)]

My Lords, I rise to speak to Amendment 29. I entirely understand the points made by the noble Baroness, Lady Grender. A number of individuals collectively forming “tenant” particularly occurs in London and other metropolitan areas. Those of us who inhabit the countryside tend to have single tenants in a building, rather than a system of sharing.

I have absolutely no problem with the idea of ensuring that landlords are not overcharging beyond reasonable cost. My concern is that this is beginning to look like micromanagement of the letting process. The question is, “reasonable” by whose standards? For instance, a group of tenants—perhaps four of them—decides to take on a property on a two-year term. Let us suppose they collectively decide that they want to finish the tenancy after one year and want to move out in the run-up to Christmas, which is known to be a difficult time for the letting market because things tend not to get going again until into the new year. By whose standards would “reasonableness” be measured? Would it be by reference to the tenants, who, after all, have agreed to take on the property on a two-year basis and wish to terminate after one year; or by reference to the reasonable costs the landlord would run up in that process? All sorts of things hang on that—for example, rent voids and running costs such as heating and security while the place is unoccupied, were that to happen.

I appreciate that things get more difficult when you have a number of tenants and one wants to go, because that creates a dynamic which, as the noble Baroness rightly said—and has said previously—affects the other occupants. It would be really undesirable if landlords responded by simply deciding not to agree to early termination. That would be the worst of all possible worlds. As a private sector landlord, I have never used that other than when someone wants to terminate at short notice and before the property can reasonably be re-let. That tends not to happen in the high-pressure circumstances of inner-London shared residential, but with a freestanding property in the countryside, where things are quite different. The Bill will apply across the nation.

I counsel a little caution here, and perhaps the Minister would care to comment. If the culture creeps in whereby no early termination of a lease is possible or will be agreed, we will be back here later with another measure to say that landlords must provide that facility. I do not see this as necessarily being the endpoint, and I should like to tease out that issue to give some closure on what we are doing with residential landlord and tenant. Hopefully, the situation can stabilise so that everyone will know where they are for, at any rate, the reasonably foreseeable future.

[Lord Best (CB)]

My Lords, it is worth underlining that this part of the Bill is an important measure to prevent what is a pretty common abuse, which is, when there is a change of tenancy, at little or no cost to the landlord, the agents involved making serious amounts of money, which the Bill would prevent them doing in future.

At Second Reading, I cited an illustration from my last intern, whose sister was taking her place in a flat share of three. Each of them, on entering the flat, needed to pay the agent a fee of £275 for the privilege of signing up. When one of the occupiers left and was replaced by her sister, the outgoing one was charged £250 for termination of the tenancy agreement and her sister, who was moving in on the same day with her packed suitcase, was charged £275 as a new tenant. The agents got £525 for this transfer from one sister to another. The landlord received exactly the same amount of rent, because there was no discontinuity in the rent paid.

In such circumstances, paying £50 as a takeover fee for the privilege of signing a photocopied document when one person moves in in place of another sounds quite enough. The guidance may be the best place to put this, but the test must be whether the landlord has suffered a loss of rent. If there is no such loss, surely the £50 should kick in as the maximum which the agents can take. One can understand the need to compensate if there has been a loss of rent because of a gap when one tenant has moved out and no new one has arrived. Otherwise, £50 sounds like a maximum not a floor.

[Lord Young of Cookham (Con)]

My Lords, I am grateful to all noble Lords who have taken part in this short debate relating to the charges that can be imposed for variation, assignment, novation or termination of a tenancy where these are requested by the tenant. We have previously set out that it is not fair to ask landlords and agents to pay reasonable fees where these arise from the action or request of a tenant. Following pre-legislative scrutiny, we clarified that both early termination and change of sharer costs were permitted, so long as these were fair. As a result, the Bill provides that a landlord or agent can charge a tenant in these circumstances, but such fees are capped at £50—one-tenth of the fee charged in the case cited by the noble Lord, Lord Best—or reasonably incurred costs if higher.

Amendments 27 and 28 seek to impose a hard cap on the amount that can be charged and to prohibit this charge in relation to a change of sharer. When considering how to manage these amendments, we share the caution mentioned by the noble Earl, Lord Lytton. We want to ensure that landlords and tenants can agree reasonable requests to vary a tenancy. Although we do not expect this charge to exceed £50, it is only fair that, where it does so, landlords and agents are able to recover their reasonably incurred costs. For example, if a landlord is required to undertake a search, conduct reference checks and amend tenancy deposit protection arrangements for a new tenant with no help whatever from the outgoing tenant, those costs may be higher than normal. Landlords and agents will need to be able to demonstrate, if challenged, that their costs are reasonable. They will have to justify them and, if they cannot do so, trading standards officers may have a case to investigate.

Crucially—this point was mentioned by the noble Earl, Lord Lytton—we do not want to create a situation where landlords are reluctant to agree to a change of sharer because they do not believe they can recover their reasonable, justifiable costs. This would not help tenants, who would be required to break their contract if they wanted to leave, nor would it help those hoping to move in to replace the sharer moving out. This matter was discussed during pre-legislative scrutiny and tenant representative bodies recognised the need for the ability to charge in such circumstances, provided that the risk of abuse was mitigated, which we have done by imposing a cap of £50 and requiring any additional costs to be reasonable. In its report, the Housing, Communities and Local Government Committee said that:

“We welcome the Government’s intention to clarify the legislation and to permit charges related to a change of sharer where these are requested by the tenant”.


Amendments 29 and 30 would place an obligation on the landlord to take reasonable steps to re-let the property where they have agreed to terminate a tenancy early. These amendments would also limit the loss a landlord can recover to the period reasonably required to find a new tenant, even if he was unable to find one.

An assured shorthold tenancy is a contract where a tenant commits to pay the landlord rent for a given period of time, the fixed term. The landlord is entitled to the rent for the entirety of that term. If the tenant seeks to leave the tenancy before the end of it, then they would need to seek agreement of the landlord to do so. Where possible, landlords should agree to this, and can ask the existing tenant to find a suitable replacement. We encourage them to do so through our guidance.

Turning to the amendment introduced by the noble Baroness, Lady Grender, paragraph 6(2) of Schedule 1 says:

“But if the amount of the payment exceeds the loss suffered by the landlord as a result of the termination of the tenancy, the amount of the excess is a prohibited payment”.


In other words, the landlord can only recover any loss they incur in permitting a tenant to leave early. They cannot double-charge for the same period of time. They are entitled to recover only the sum of any rental payments which would not be met by the start of a new tenancy. If a replacement tenant is found and there are no void periods, we would expect no early termination charge to be levied to the outgoing tenant. This has been reiterated in the consumer guidance for tenants and landlords, and we welcome the constructive comments made by the noble Baroness on our draft guidance.

However, looking at the amendment, we cannot necessarily expect landlords to know how long would reasonably be required to find a replacement tenant. This depends on several factors, including the rental market in the local area. Therefore, we expect landlords and tenants to consider on a case-by-case basis the likely void period and any reasonable charge for early termination. Again, we do not want to harm tenants by disincentivising landlords agreeing to a reasonable request to end a tenancy early or to a variation of a tenancy. That is not what this Bill is seeking to achieve, but there is a real risk of this if the amendments are agreed to. On that basis, I hope that the noble Baroness will withdraw her amendment.

--- Later in debate ---

[Lord Best]

My Lords, I take an opposing view. I am sad to do so on the noble Baroness’s amendment, since she does so much good work in this sector. I declare my interest as a co-chair of the Home Office’s right to rent consultative panel, which looks at the right to rent that people require before taking up a letting.

For sure, somebody has to pay for the identity and immigration status check which now has to happen. The question is whether tenants should pay the agent for this—they would do so whether British citizens or not—or whether the landlord should ultimately expect to pay, getting their agent to do it on their behalf. It is one of the functions of an agent to check whether the tenant is an illegal immigrant or has the right to be in this country. That task is for an agent to perform, just as they need to make sure that the landlord’s property has a gas safety certificate or an energy performance certificate. This is part of the process that an agent is paid for. There is a fundamental principle that the landlord is ultimately responsible for the letting, along with the agent who acts for that landlord, and they and not the tenant should be the ones who pay. In the same way, the tenant does not have to pay for their own reference—that is something that the agent takes up. This is part of the process taken on by an agent and it justifies the fees that agents charge their landlords. What else do we want agents to do but look after the landlord’s interests in cases of this kind?

Therefore, I think that the Government have this right. This is not an area where the tenant should be asked to make a supplementary payment to the agent, and the agent may well charge the landlord a good deal already. As the Bill spells out, it is a matter on which no fee should be payable by the tenant.

Legislative Reform (Regulator of Social Housing) (England) Order 2018

Lord Best Excerpts

Wednesday 23rd May 2018 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, the draft order we are considering today is, I hope, a largely uncontroversial one. Indeed, it passed through the other place without a debate. It seeks to establish the Regulator of Social Housing as a stand-alone body. It implements the recommendation in the Tailored Review of the Homes and Communities Agency to establish a stand-alone regulatory body for social housing. In so doing, it removes any possibility of a potential conflict by separating out the regulatory function from the organisation, which is also responsible for investment. It will not, however, change how registered providers of social housing are regulated or how they operate on a day-to-day basis.

That is not to say that this change is insignificant. The change will ensure the continuation of independent and robust regulation of the social housing sector. At the moment, the regulation of social housing is the responsibility of the regulation committee, a statutory committee of the Homes and Communities Agency. While the organisation responsible for undertaking this function refers to itself as the Regulator of Social Housing, it remains legally part of the Homes and Communities Agency. It is independent from government and is crucial in underpinning investor confidence in the social housing market.

In 2016, the then Department for Communities and Local Government conducted a tailored review of the Homes and Communities Agency. The review was forward-looking and focused on the challenges faced by the agency. In respect of regulation, the review found there was a compelling case for change of the regulator’s structure. In recent years, the Homes and Communities Agency has expanded into commercial investments. This makes the agency, in some cases, both a secured creditor and regulator of registered providers. This potential conflict of interest did not exist when the decision was made to incorporate social housing regulation within the Homes and Communities Agency as, at that time, the agency’s funding predominantly focused on grant-making.

I should make clear that existing governance arrangements and an operational “ethical wall” have ensured that information has not been inappropriately exchanged between the regulation and investment functions. However, the financial landscape of the sector continues to evolve and become more complex. Because of that, it becomes ever more important that the Homes and Communities Agency and the regulator are best positioned to adapt to such changes and that commercially sensitive information is safeguarded. Moreover, it is crucial that the regulator is perceived to be adept at handling such complexities, so as to uphold lender confidence.

The regulator’s role and functions are set out in the Housing and Regeneration Act 2008, as amended by the Localism Act 2011. As a result, changes to primary legislation are needed to deliver a stand-alone regulator. We have used the powers in Section 2 of the Legislative and Regulatory Reform Act 2006 to deliver these changes through a legislative reform order. The order ensures that social housing regulation is made more consistent with better regulation principles by providing for greater accountability and transparency for regulatory activities.

I should also make an important point about legislative reform orders. They are intended to be used either to reduce the overall burden of regulation or to ensure that regulation is carried out in a more transparent or proportionate manner. They cannot be used to create new, or vary existing, regulatory functions. That means the current provisions on the regulatory and enforcement powers of the regulator contained in Sections 192 to 269B of the Housing and Regeneration Act 2008 remain effectively unchanged by this legislative reform order. These provisions set out the regulatory framework, for example around the economic and consumer standards that can be set and how they are monitored. They also cover enforcement powers at the regulator’s disposal, for example, to impose penalties or to award compensation in the event of failure by a housing association. So—to anticipate points that noble Lords may wish to make—changes to how the sector is actually regulated are better considered as part of the forthcoming social housing Green Paper. What this legislation will do, however, is to put in place the arrangements for a robust and independent regulator ready to adapt to any policy changes that may arise from these reviews.

A crucial part of the process of delivering changes through a legislative reform order is that there is public consultation on both the changes proposed and the use of a legislative reform order to deliver them. The department conducted a consultation in early 2017. While the number of responses was relatively small, they were overwhelmingly in favour of the move, including from the sector and investors.

I turn briefly to the specifics of the LRO. In effect, this order reverses the changes made by the Localism Act 2011 and removes the regulator from the Homes and Communities Agency, thereby making it a stand-alone, independent body. The detailed provisions that do this are set out in Schedule 1 to the order. Part 1 of the schedule establishes the regulator and transfers functions from the HCA to the regulator. Part 2 makes amendments to other legislation consequent upon the creation of the regulator. Part 3 provides for the transfer of property, rights and liabilities from the HCA to the regulator. Finally, Part 4 of the schedule provides for transitional and savings provisions consequent upon the transfer of functions.

To conclude, the creation of a stand-alone Regulator of Social Housing is a necessary change that will ensure that the sector continues to be regulated effectively. This is essential if we are to ensure that the financial markets continue to have confidence in the sector and to allow housing associations to invest in providing the homes that we need. I commend this order to the House, and beg to move.

[Lord Best (CB)]

My Lords, the argument over whether the grant maker for social housing and the regulator for social housing should be the same government body has raged for 45 years. I was in the midst of the argument back in 1973, representing the housing associations as chief executive of the National Housing Federation. The Housing Corporation was being greatly enlarged by the Housing Act 1974; it had been created 10 years earlier, but only to promote cost rent and co-ownership housing. My federation concluded that that the Housing Corporation, as the body responsible for paying out housing association grants—which frequently covered 90% of the capital costs in order to keep rents low—should also be the body responsible for regulating these organisations. Regulation meant registering each housing association as fit and proper and then visiting it to monitor performance, ensure probity, and so on. These regulatory processes to ensure good governance were of critical importance to the funding agency before it could allocate substantial government subsidies to the fledgling housing associations. It was natural then for the grant-making and regulatory functions to be combined.

With the arrival of housing benefit—the personal subsidies to tenants—charging higher rents created fewer problems and the Housing Corporation could reduce grants somewhat without those on lower incomes having to be turned away. The Minister was Housing Minister at the time. When it fell to him to oversee cuts to the Housing Corporation’s grant making, he could declare, with some justification, “Let housing benefit take the strain”. Moreover, loans from the Housing Corporation became increasingly less relevant after the Housing Act 1988, under which the housing associations could borrow the money they needed on the private market. So the dominant funding rule of the Housing Corporation was changing.

Increasingly, the combination of funding and regulatory functions within the one agency looked less relevant, and the earlier requirement for combining the roles in one body was becoming strained. The Labour Government, with Yvette Cooper as Housing Minister, in 2007 appointed Professor Martin Cave from Warwick University to review the position. Professor Cave argued convincingly that these were two different roles, requiring different skills. Indeed, Cave pointed out the potential conflicts of interest if the funder and regulator were one and the same.

Housing Associations

Lord Best Excerpts

Thursday 8th February 2018 Lords Chamber

[Lord Young of Cookham]

The noble Baroness will know that, for any given sum of public investment in housing, you can build either more houses at slightly higher rents or fewer houses at slightly lower rents. In 2010, her party and mine decided to go for the higher-output option. That was the right decision at the time to make faster progress in adding to the stock of good-quality, permanent homes for rent. In October last year, the Prime Minister announced an extra £2 billion for affordable housing and made it clear that a big chunk of that should be redirected towards social housing, as the noble Baroness suggests. We have listened to the representations from housing providers. The £2 billion will be available for social rents as opposed to affordable rents, and by lifting the cap on what local authorities can borrow we are enabling local authorities to build more council houses.

[Lord Best (CB)]

My Lords, the Minister knows that tens of thousands of affordable homes have been produced by requiring the housebuilders to include a percentage of affordable housing in all their big new developments. He will also know that over recent years the housebuilders have found a loophole—the so-called viability test, a specious argument—to renege on those obligations. Can he reassure the House that the Government are going to close this loophole, which is just a scam to enable the housebuilders to get out of the agreements that they have already made and increase their profits?

[Lord Young of Cookham]

The noble Lord makes a valid point. We are concerned at the way in which certain housebuilders use the viability test to reduce the percentage of homes on their sites for social housing. We are reviewing the viability test with a view to increasing the original intention on these sites to have a fixed percentage of social housing units.

Housing: Rental Market

Lord Best Excerpts

Thursday 2nd November 2017 Lords Chamber

[Lord Young of Cookham]

I am not sure that I would sign up for a short-term letting on those sorts of terms, which sound penal. Many landlords would rather have their property occupied throughout the year rather than for up to 90 days and then not used for the rest of the year. The balance we have tried to get in London is to safeguard the stock of long-term accommodation for rent by Londoners with the freedom for Londoners, when they are not using their home themselves, to let it out to other people who want to rent it.

[Lord Best (CB)]

My Lords, does the Minister agree that the real deterrent for landlords letting on the open market to people on lower incomes is the policies of the Department for Work and Pensions, which mean that, if the tenant is on universal credit, the landlord will not get any money for six weeks and will then not get the full market rent and therefore is having to make a sacrifice? With those deterrents from the welfare system, is it not likely that homelessness will rise as private landlords increasingly will not accept anybody who is on a low income?

[Lord Young of Cookham]

The noble Lord is right to raise the issue of universal credit. It is one of the issues that is now being looked at as we run up to the Budget later this month. We will also have a debate on universal credit later this month, before the Budget, when he can make the point again. However, in certain circumstances the rent can be paid direct to the landlord in order to provide the security of income that the landlord may need.

Intergenerational Fairness in Government Policy

Lord Best Excerpts

Thursday 26th October 2017 Lords Chamber

[Lord Best (CB)]

My Lords, as the noble Baroness, Lady Smith of Newnham, has noted and as the noble Lord, Lord Willetts, explained so well, the obvious manifestation of intergenerational unfairness in the UK is found in this country’s housing circumstances for young and old. Clearly, the UK needs to redress the imbalance between, on the one hand, the majority of those over 60 who are home owners with a substantial capital asset, security, and more than adequate space and, on the other hand, the majority of those under 40 who have the heavy burden of paying a disproportionate amount of their income for accommodation that seldom suits their needs. Yet the successive deep cuts in housing support to those on the lowest incomes are hitting the under-35s hardest of all. However, today, counterintuitively, I am going to suggest more support specifically targeting older people, rather than advocating brave but vote-losing measures that tax or penalise them.

Much of this country’s housing comprises three and four-bedroom suburban houses with gardens, occupied by one or two elderly people. This accommodation will become increasingly problematic to manage and maintain and, with its steps and stairs, increasingly inaccessible. But where are the spacious, light and airy homes that are easy to heat and maintain, in convenient locations, and designed with older people in mind? Only when demand is stimulated and supply is generated will those of us in our extended middle age take the plunge and rightsize before a crisis forces us to move. Such a move would free up the family homes that the next generation so badly needs.

I strongly commend the measures devised by the All-Party Parliamentary Group on Housing and Care for Older People, which I co-chair with Peter Aldous MP. The APPG has set out a three-part help-to-move package to change attitudes and behaviours. We propose, first, stamp duty exemption for purpose-built, age-exclusive housing; secondly, equity mortgages to top up purchase costs for older people, as Help to Buy does for the young; and thirdly, good financial advice on housing from an extension to the Government’s Pension Wise advisory service.

Helping and incentivising older people to rightsize to new accommodation could contribute massively to intergenerational fairness by releasing significant numbers of family houses on to the market, as happens in so many European countries, the USA and Australasia. Even sales of expensive homes have a knock-on impact that works its way down, releasing property for those on the lower rungs of the ladder. It would also inject some momentum into the stagnant wider housing market, with the economic stimulus of an average of three subsequent movements down the property chain. HM Treasury, although forfeiting stamp duty on the new homes bought by older people, would collect far more stamp duty from the three other movers. So the help-to-move package would cost the Government nothing.

In addition, there would be significant savings to health and social care budgets. Hospital admissions frequently follow accidents in the home; subsequent delayed discharge—bed-blocking, as it is horribly called —is often caused by people being unable to leave hospital or being readmitted because their home cannot take them back. Admission to expensive and unpopular residential care can be prevented or postponed when people move to accessible, care-ready new housing.

Rather than risking the wrath of the electorate with sensible but politically problematic measures, I ask the Minister to lead the charge in backing a help-to-move package which would lead to the redistribution of housing from old to young and free up resources for the NHS and local authority care budgets. This could be the winning formula for some real intergenerational fairness.

Housing: Availability and Affordability

Lord Best Excerpts

Thursday 12th October 2017 Lords Chamber

[Lord Best (CB)]

My Lords, I congratulate the noble Lord, Lord Smith, on initiating this excellent debate, which has demonstrated an incredible consensus across the whole House on a number of the key issues. I am only sorry that I can do justice to only one aspect of the housing availability and affordability debate. However, as a preface, I congratulate the Government on much of the policy thinking in their earlier housing White Paper, and now the announcement by the Prime Minister of a £2 billion grant fund for councils as well as housing associations to deliver 25,000 new homes for so-called social rent. This may be a modest part of the 1.5 million homes to be built by 2022, and obviously is only a start, but the Government’s action signifies a recognition of the need to target those who can afford only a modest rent, demonstrating a significant move away from the higher-rent policies that have been leading even the charitable housing associations to turn away the poorest in society.

The issue of affordability also highlights the crying need for the good intentions of Ministers at the Department for Communities and Local Government not to be continually undermined by the Department for Work and Pensions. The DWP has been disastrously cutting, capping and freezing the support it provides to enable poorer people to afford a proper home. This interdepartmental conflict is currently undermining the provision of supported housing for vulnerable and older people, and it undermines the Homelessness Reduction Act that I had the honour of piloting through your Lordships’ House, because the DWP freeze on the local housing allowance, which caps rent for those who rely on benefits, causes homelessness when landlords inevitably turn out or turn away anyone in receipt of benefits.

The issue I want to address is the nation’s abject dependency on the sector which creates by far the majority of new homes: the private housebuilders. Despite making record profits, this industry, dominated by half a dozen volume housebuilders, is failing us badly. The catalogue of failures includes: poor quality in construction and design; bad customer care; miserable space standards; rip-off leases for houses, with escalating ground rents—on which the Government are acting, and I congratulate them; deteriorating satisfaction of buyers; avoidance of housing for older people, where profits are lower; rejection of brownfield sites and a concentration on the easier greenfield opportunities; little concept of creating properly planned places; sitting on land with planning consent until prices go ever upward; and, perhaps worst of all, reneging on Section 106 agreements and wriggling out of obligations to provide affordable homes for local people, on opaque grounds of “viability” and housebuilders’ “right” to make at least 20% profit on the deal. While the major housebuilders’ shares have risen by 127% in the past four years, compared with 21% for the FTSE All-Share Index, and profits in companies such as Persimmon rose by more than 30% last year, I believe the private housebuilding sector has lost the confidence of the whole nation.

What is to be done? After the last war we nationalised the development of land and in theory what is built is determined by the community, in particular the local planning authority. But we are dependent on a planning system that has been starved of resources and now sorely lacks the capability to enforce quality housebuilding and place making. If planners can stand firm, it is the price paid for the land that meets the cost of including affordable homes and achieving quality. We must restore authority and capacity to the planners, who are our front line against the social and environmental costs that we will otherwise suffer at the hands of overpowerful housebuilding interests. I am pleased to note that discussions are afoot, led by the RIBA president, Ben Derbyshire, on the sharing between councils of good practice in design and place making, strengthening the resolve and raising the profile of the planners upon whom we depend.

I confess to being very surprised by the announcement at the Conservative Party conference, to which other noble Lords have referred, that a further £10 billion was to be provided for the Help to Buy scheme, dwarfing the new investment in social housing. Alastair Stewart, analyst at Stockdale Securities, calculates that purchasers are paying 5% to 7% more for a Help to Buy property in order to take advantage of the government-funded equity loan that does not attract any cost for five years. Help to Buy may well turn out to be a very bad deal for purchasers, who have to start paying escalating fees five years down the road and must pay back the whole of the equity loan when they move, but who seem unlikely to get back what they paid for the property. Although the housebuilders are hooked on this subsidy, I am certainly advising my 30-something year-old son to avoid the temptations of Help to Buy. It is unwise for government to feed the housebuilders’ addiction.

Therefore, there have been important steps forward for availability and affordability of housing. But sadly, with housebuilders apparently too big to displease, there has also been a step back. The Minister’s response would be much appreciated.