Housing and Planning Bill (First sitting)

Lord Jackson of Peterborough Excerpts

Tuesday 10th November 2015 Public Bill Committees

[The Minister for Housing and Planning (Brandon Lewis)]

May I draw attention to my entry in the Register of Members’ Financial Interests?

[Mr Stewart Jackson (Peterborough) (Con)]

May I also draw the Committee’s attention to my entry in the Register of Members’ Financial Interests?

[Chris Philp (Croydon South) (Con)]

May I likewise draw the Committee’s attention to my declarations in the Register of Members’ Financial Interests?

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[Kevin Hollinrake]

Q 16 Mr Blakeway, one of the biggest challenges in providing more housing is delays in the planning system. There are a number of measures in the Bill, such as insisting on local plans by 2017, simplifying overall plans and more timely decisions in planning in principle. How do you think these will work out in terms of expediting the planning system?

Richard Blakeway: We welcome all the measures that are being introduced by the Government to try to accelerate or expedite the planning processes. As you know, since the GLA’s inception, we have had a long-established strategic planning role and in particular we are keen to build upon clause 101, which gives the Mayor greater authority to exercise those strategic planning powers. In addition, we would like to be able to play a role around permission in principle and issuing development orders, as well as the register of brownfield sites and our ability to co-ordinate that. As a basic principle, we would like to see the Mayor of London exercise the kind of functions that the Secretary of State envisages exercising in the rest of the country.

[Mr Jackson]

Q 17 Obviously there is a predisposition in the Bill towards support for residential accommodation and housing in London and across the country. What impact do you think that might have, specifically in London, on commercial and business premises?

Richard Blakeway: I think that some of the issues in relation to the conversion of office to residential are actually outside the Bill. None the less, we very much welcome the Government’s agreement that there will be an exemption until May 2019 for some of the existing areas that we have sought exemptions for, such as the CAZ—the central activities zone—the Royal Docks enterprise zone, Tech City, and the northern part of the Isle of Dogs. We really welcome the Government’s move on that. Clearly, the article 4 measure allows those areas to formulate an application to extend the exemption beyond 2019 and there is obviously a window to do that.

[Brandon Lewis]

Q 18 May I take you back to the conversation a few minutes ago about starter homes? Are you able to give us an idea, even if it is a ballpark figure, of the average price paid by a first-time buyer for a home in London?

Richard Blakeway: A ballpark price would be about £290,000. I think that is based on CML data.

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[Helen Hayes]

Q 31 Given some of the uncertainties that you have all outlined, do you think too much is being left to regulations when it should be in the Bill?

Phil Glanville: Yes.

Philippa Roe: I would say no, because the Bill is going through now, this is complex, and if we tried to rush it through too quickly now there might be unintended consequences. I would like to see proper time given for the regulations to be introduced, picking up on those unintended consequences.

Martin Tett: I agree with Councillor Roe about unintended consequences. If you try to shoehorn everything into the Bill, there is a danger of locking in things on which you might need flexibility later. The LGA is keen to sit down with the Government, understand some of the intentions behind the Bill and try to work through the best solutions that lead to the best outcomes for not just the Government’s policies but local councils and their housing responsibilities.

Sir Steve Bullock: Going forward, the Bill is interesting in the way it proposes to create that space. I suspect that that means that if we are going to be in an ongoing process of negotiation beyond the Bill becoming an Act, local and central Government need to step up their games to demonstrate how they will make that work and how we can have sufficient transparency to provide the reassurances that people will want.

[Mr Jackson]

I was rather remiss earlier for not declaring another interest that might not be in the Register of Members’ Financial Interests: I am a vice-president of the LGA, so that is on the record. That brings me neatly to Councillor Tett.

[The Chair]

Mr Jackson, it is an unpaid post, is that correct?

[Mr Jackson]

Q 32 Yes, regrettably.

If the Bill becomes law, the Secretary of State will acquire powers in respect of local development plans. With your LGA hat on, Mr Tett, why do you think a significant number of local planning authorities have still not adopted local development plans? Is there a systemic issue that is preventing them from doing as other local authorities have done?

Martin Tett: I can give a generic answer to that, but we would have to get down to some specifics as well. There is a complex answer to what sounds like a very simple question. In some cases I suspect that, quite frankly, local authorities have not risen to the challenge sufficiently. In some areas, though, I think they have made their best efforts but, during the process, have fallen foul of various requirements. The one that is cited to me a lot is evidencing the duty to co-operate to the satisfaction of the planning inspector.

There is a lot of frustration in some councils because they have been found to be inadequate and effectively have to restart the whole process. A lot of councils say to me, “Why can’t we go back to where we were found to be inadequate, rather than having to start again?” Councils in my area have failed their local plan on two occasions and are now well into their third, whereas had they been able to short-circuit that, they would probably now be well into adopting a plan. There is a variety of reasons throughout the country and it is a long-drawn-out process. In some cases, councils have not risen to the challenge; in other cases, the process itself is convoluted, complex and difficult.

[Mr Jackson]

Q 33 Is that officer capacity or political leadership?

Martin Tett: It is both. There is a variety of answers to that. In some cases, if one is honest, there has probably been inadequate political leadership, but often local councils are really struggling with sufficient professional, experienced officer capacity. One thing we have all experienced across virtually every council in the country is that experienced, professional planning officers are very difficult to recruit and retain. They are being hoovered up—I use that expression quite often—by the private sector. As the building and civil engineering industries have recovered nationally, they have been able to pay substantially higher salaries than local councils. It is very difficult to recruit and retain the experience required for the successful implementation of a local plan.

[Mr Jackson]

Q 34 May I ask the London representatives about the parts of the Bill that relate to rogue landlords, banning orders and so on? How do you see that working within the context of London boroughs?

Martin Tett: First, although we welcome the provisions in the Bill, we are not clear that they will necessarily go far enough to make the impact that we all feel is needed. For example, on the level of fines, in my borough we had a landlord who was making £319,000 a year. That is at the extreme end, with landlords who are close to being criminal. A fine of £5,000 would be a minor inconvenience to them. Secondly, we would welcome the proposed register, but it needs to be very accessible. The deputy Mayor has been talking about that. It may be something that individual or would-be tenants need to be able to access.

Philippa Roe: We similarly support the proposals. They sit alongside the tools which, as a council, we already use very effectively—for example, to do with environmental health—to pick up on landlords who are providing substandard properties. The proposals will be another tool in our armoury, which is good.

Phil Glanville: I would go along with what has been said: the proposals are positive. Sharing the tenancy deposit database with local authorities allows them to build up a better picture of landlords in a given area or neighbourhood. It is a question of where thresholds lie in terms of banning orders and the register, and where they will end up. Moving to a fine-based system rather than having to take things to a full prosecution is a positive step—though one questions whether the fines would be enough of a deterrent. In building more tools for our armoury the proposals are a positive step.

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[The Chair]

You have sparked a great deal of interest and quite a lot of people are catching my eye, so may I ask for both questions and answers to be as crisp as possible in the 20 minutes left?

[Mr Jackson]

Q 69 May I ask you, Ms Butters, to restate your specific opposition to pay-to-stay? It seems that you might be overlooking fairness and social equity issues and the release of funds that the policy may very well give rise to. London aside, I would contend that £30,000 is significantly above an average wage in somewhere such as Stoke-on-Trent or Newcastle-under-Lyme or several other parts of your area. Therefore, apart from the administrative, bureaucratic issues that Mr Orr mentioned, on what basis do you oppose the policy?

Sinéad Butters: There are two reasons. One is the need for local housing providers to be able to make judgments about what their area needs and to reflect the points you made about affordability. An imposed national figure of £30,000 will not take account of local need and local incomes.

In Stoke, 38% of the working adult population earns £16,000, so two adults together would be above the £30,000 limit, yet that is a marginal figure for being able to pay a market rent. I accept that market rents in Stoke are low, but in other areas they are not. We had the example of a tenant in Oxfordshire whose particular circumstances could mean that her rent would be tripled from £600 to £1,800. Obviously, there are issues about tapers and how they would apply, but this national approach with a single £30,000 outside of London does not take account of local circumstances, and that is our greatest fear. For me, it is about the ability of housing associations to set rents that are appropriate for that tenant, and the freedoms and flexibilities that the National Housing Federation has talked about. That will mean a range of different choices, working with our local authority partners, on how to pitch and what is right for their area in terms of affordability. This does not allow us that flexibility.

[Mr Jackson]

Q 70 But you agree that registered providers, with the extra income that may arise from this policy—I do not know whether you have any examples; you mentioned some examples earlier—may have the authority and autonomy to ring-fence for developing other sites for social rented housing.

Sinéad Butters: Absolutely, but the point I am making is that that ability to use the additional receipts should be based upon known local circumstances—local incomes and local affordability—and not set nationally. That would allow flexibility.

David Orr: May I add something here? Rents in our sector are a shambles because of Government intervention in rent-setting for the past 17 years. Decisions that are made for short-term reasons, which do not understand the long-term impact, have created a pattern of rents that is almost incomprehensible to anyone. We would like to be in a position to relocate responsibility where it lies: with the boards of individual housing associations, to provide housing and associated amenities in accordance with their objectives and to be responsible for charging appropriate rents. The rents will be different for different people in different parts of the market. Part of pay-to- stay says, is it sometimes appropriate to charge people higher rents if they have higher incomes? Yes. Is it right for Government to be imposing it? No.

[Mr Jackson]

Q 71 That is a fair point, Mr Orr, but this is at the beginning of the process and Ministers might surprise you in a pleasant way.

David Orr: Good. I am always happy to be surprised in a pleasant way.

[Mr Jackson]

Q 72 Far be it from me to speak for the Ministers, but are you really suggesting that registered providers operate in a hermetically sealed bubble, given that the housing benefit bill has spiralled significantly over the past 20 years? The Government surely have a fiscal responsibility to make big strategic decisions in the provision of public housing when they have a spiralling housing benefit bill.

David Orr: The housing benefit bill is spiralling primarily because the number of people who need to claim housing benefit has grown as rents have grown, and because of the number of people in work in the private rented sector who have to claim housing benefit. It is not fundamentally about the growth of rents in the social sector, but, where rents have grown in the social sector, that has been a direct consequence of Government decision making. So I can sit here and say, “It’s not our fault, guv. It’s your responsibility. It’s Government decision making.” I don’t think that is acceptable. I think that local government and the public should be able to hold housing associations to account for the rents that they charge. It has been the case in the past that when the Government were setting rents, they also said that housing benefit would cover the cost of those rents. I am afraid that the decision to set the overall benefit cap at £20,000 and £23,000 means that rents that the Government have themselves set are not now, in a significant number of cases, covered by housing benefit. So if the Government want to limit their exposure by what they do with housing benefit rules, they should withdraw from rent-setting.

[Grahame M. Morris (Easington) (Lab)]

Q 73 I want to go back to starter homes and the issues that you have touched on. A survey found that 6 million people— 5.84 million, in fact—earn less than the living wage. That is not a TUC figure; it is from KPMG. Some 23% of the labour force earn less than the living wage, and the numbers are going up. There are 750,000 people on zero-hours contracts. What is there in the Bill to address the housing needs of that substantial sector of people who we refer to as the working poor?

David Orr: There is little in the Bill that addresses that group specifically. The only real new housing or tenure product that it contains is the starter home initiative. As a component of a much wider, mixed-tenure, mixed-priced series of developments, starter homes have a role to play, but a comprehensive transfer away from social rent or shared ownership towards starter homes would be a mistake. They have a role to play as part of a broad pattern of provision, but not instead of the other things we are doing.