Housing and Planning Bill
Debate between Lord Best and Baroness Hollis of Heigham
Baroness Hollis of Heigham
But councils with retained stock—and that stock is not coming forward as fast as government would wish—will have a levy in view until their own vacant stock is forcibly sold. That levy has to come from somewhere. Why on earth should some local authorities be expected to fund RTB discounts out of their money when other local authorities are not? What is the basic fairness in that? I absolutely take the noble Lord’s point that this is a redistribution from some local authorities but it means that those with retained stock will have to pay double the size of the levy or double the number of sales to make good the fact that a very large proportion of more rural district councils do not have any retained stock.
Lord Best
My Lords, the noble Lord, Lord Porter, and the noble Baroness, Lady Hollis, are in agreement on this. They both oppose the fact that this levy will be solely on those authorities that have retained stock and a housing revenue account, and that it will be a very large sum of money—£4.5 billion per annum on those councils that have retained their stock, and nothing on those councils that have transferred their stock. The noble Lord, Lord True, can read my script at his leisure. He felt I was saying that housing associations should not contribute but councils should. I am absolutely not saying that councils should carry the burden of the right-to-buy discounts for housing association tenants, as he thought that I might be. I am saying that neither councils nor housing associations should pay for this new policy and that we should see new investment, which is what we need to replace homes that are lost, and to build new homes. We need new investment.
I happen to know a bit about the Richmond Housing Partnership, which is the body to which the stock of Richmond has been transferred. It is a really excellent example of a housing association that has received the council stock and is doing extremely important things to build more homes. It is doing exactly the right thing. It would be a terrible shame if, instead of councils or the Government paying for these discounts, that organisation were taxed with a levy—that would be very detrimental to the interests of Richmond—and had to pay for the right-to-buy sales. It is making some serious economies at the moment. It is having to make efficiency gains on a big scale because its rents have been reduced due to welfare reform pressures. Nevertheless, it is doing a great job. It would be a very big shame if the idea gained any momentum at all today that housing associations were the cash cow from which could be extracted the resources to pay the £4.5 billion per annum. That would simply take resources out of the development programme for the very people for whom we need to build the new homes of tomorrow.
Housing and Planning Bill
Debate between Lord Best and Baroness Hollis of Heigham
Lord Best
Perhaps the noble Lord will give way on that point. I think it is fair to say that the National Housing Federation also made clear its public opposition to the way in which these discounts were to be funded. There may be common cause here on the way in which they are to be funded—including with the noble Lord, Lord Porter.
Baroness Hollis of Heigham
My Lords, if the noble Lord, Lord Best, will forgive me, I am not sure that that is correct. The chief executive of the National Housing Federation said:
“How this policy is paid for is a matter for the government, not for the National Housing Federation”.
That is known as the washing-of-hands defence.
Housing and Planning Bill
Debate between Lord Best and Baroness Hollis of Heigham
Baroness Hollis of Heigham (Lab)
My Lords, I support the amendment, because I think there is a real issue here. Speaking as a former local authority leader—many people in this House are either former or current local authority leaders—I had three ombudsman judgments against me, of which two were correct and one, in my view, was not. That was over about 25 years, and most were associated with planning issues.
Throughout all my ombudsman experience, both in this sector and in the health service, the issues were between the ombudsman service and a publicly accountable body, such as a local authority or a health authority, in which there were members concerned to maintain the reputation of that authority, and to respond, if not precisely to the ombudsman’s proposals—the ombudsman had no enforcement powers—at least in a positive way. The ombudsman had no powers to make us do anything, but people would respond positively by trying to address the problem and see whether it was largely procedural or whether policy needed to be changed in some substantial way. That was because the ombudsman was overseeing a public organisation that had a reputation, with trustees, councillors and so on, who were accountable for their decisions in public, in the press.
If the Minister cannot support an amendment like Amendment 17, I hope that she will tell us how she would apply that same degree of scrutiny and enforcement to rulings against rogue landlords. There is a real issue here. Local authorities will respond, even if they cannot go all the way, but a private individual, knowing that the ombudsman has no statutory powers of enforcing a decision, may decide to go in a different direction and weather hostile criticism. Can the Minister help us by telling us in what ways the Government would ensure that the naming and shaming effect of ombudsman practice could apply in the private sector?
Lord Best (CB)
My Lords, I declare my interest as the chair of the council of the Property Ombudsman, and so I am on familiar ground. As chairman of an ombudsman scheme, I am very much in favour of the principle of having ombudsman services. They save having to go to court, spending a lot of money and being at loggerheads for longer. If one can resolve matters through the mediation services that, in effect, an ombudsman provides, it can be beneficial to everyone. I am also familiar with the Housing Ombudsman scheme because it is the body to which people take their complaints if they are tenants of housing associations and local authorities. I have had responsibility for housing associations and, like the noble Baroness, Lady Hollis, I have had judgments against my organisation for, hopefully, rather trivial matters. The Housing Ombudsman has a very good reputation and is doing a very good job. It is sorting out many complaints and provides a good model for ombudsman-ery.
However, in the circumstances of both the Property Ombudsman, who looks after complaints from estate agents, letting and managing agents and corporate bodies, and the current Housing Ombudsman scheme, which looks after the mostly responsible local authorities and housing associations, one is in completely different territory to the 1.8 million individual private landlords. I see severe practical difficulties in applying the principles of ombudsman-ery—which require you to deal with a corporate entity, a body whose reputation needs protecting and who has a great deal to lose from the process—to the 1.8 million individual landlords, which, I say to the noble Lord, Lord Foster, is perhaps the current figure, 72% of whom have just one property.
It is extremely expensive if one gets bogged down in an individual dispute. Cases which involve the Property Ombudsman in dealing with disputes between agents and tenants who complain to us can sometimes go on for a very long time. However, the agents will try to get matters sorted: they will have their own complaints procedures and will work things through. They will show a willingness to go with this and, at the end of it, when we make an award—if we do make an award—against the agent, then the agent will pay up. We have sanctions if they do not.
When dealing with individual landlords, who sometimes do not have an office or an address and do not reply, these disputes can run and run and be extremely expensive to administer. This, I am afraid, is a criticism of having a system which has 1.8 million landlords looking after the properties. The practical difficulties of simply applying the ombudsman system to all private landlords are enormous. I suggest that if one were to have a pilot scheme to test out whether one can apply ombudsman principles to this sector, it would be a good idea to go with the corporate entities first. These landlords are private companies and have status. There is therefore an opportunity for legal processes to be brought into play if they do not pay up on awards and so on.
Forget the great mass of individuals for the moment because they could be expensive. I am afraid 96p per landlord will not do it because if tenants and landlords get into a dispute it can be ongoing. Even when one is half-way through trying to fix a dispute the landlord/tenant relationship can break down again on a new issue and the case could run and run. It is a big undertaking. So, to start with, I would stick with the corporate entities.
The Housing Ombudsman scheme is able to take on board corporate players. Some of the good landlords we have are already in membership of the Housing Ombudsman scheme on a voluntary basis. If one was seeking to extend the principles of ombudsman services, the first step would be to make this compulsory, as it is for housing associations and local authorities. Corporate bodies which are landlords should have somewhere to go. As with when we complain about our electricity, telephones or anything else, there should be a service. I suggest a pilot should start there, but it should be a little less ambitious than the scheme suggested in the amendment which, in many ways, is going in the right direction.