Housing and Planning Bill

Lord Kennedy of Southwark Excerpts

Wednesday 20th April 2016 Lords Chamber

Making such processes properly planned and properly predictable is a valuable aid to making sure that these sorts of things, which would stand in the way of somebody buying a freehold because they were fearful of the costs which had been rolled up and might not be fully known, were brought out into the open and that a sinking fund was available as a credit against those costs. That seems to be invaluable and, to that extent, I support both amendments.

[Lord Kennedy of Southwark (Lab)]

My Lords, as this is my first contribution to Report today, I refer noble Lords to my declaration of interests and confirm that I am an elected councillor in the London Borough of Lewisham. I join other noble Lords in welcoming the noble Baroness, Lady Hanham, back to your Lordships’ House. She has been much missed and is very welcome here today.

The issues raised in these two amendments were discussed in Committee. The noble Baroness, Lady Gardner of Parkes, is knowledgeable on these matters and it is always worth listening to and taking note of what she says on a variety of matters, particularly concerning leaseholders.

We on these Benches largely welcome the spirit of what is proposed here, but I am not convinced that it strikes the right balance. In Committee, my noble friend Lord Beecham raised issues in respect of the wording, specifically use of the term “buyer” in proposed new subsection (1) in Amendment 102, and asked what majority would be required. Equally, on Amendment 101, concerns were raised about the practicalities by my noble friend Lord Campbell-Savours. How do you deal with a situation where 51%, a simple majority, want to make a change, but 49% strongly oppose it? I understand fully the noble Baroness’s point about 100%, because of course that would be impossible to achieve. However, at this stage, I think that we need to come up with another mechanism or formula to address the concerns raised in the amendment. I hope that the Government will be much more amenable to finding a way forward and not give the response that the noble Baroness had from the previous four Ministers.

[Viscount Younger of Leckie]

My Lords, I thank my noble friend Lady Gardner for her amendments on leasehold, which have led to a short and informative debate. I want to take this opportunity to thank my noble friend for her tireless efforts and dedicated service in raising issues on behalf of those in the leasehold sector.

As we have heard, Amendment 101 would modify a lease where leaseholders have exercised the right to manage. As a leaseholder herself, my noble friend will appreciate the benefits and the associated responsibilities of acquiring and exercising the right to manage. However, this amendment, although introduced with the best intentions, would not achieve what its intended purpose appears to be.

As noble Lords will know, the right to manage allows leaseholders of flats to take over, by means of a right-to-manage company, the freeholder’s or landlord’s management responsibilities. Where the right to manage has been exercised, the amendment would allow leases to be modified in relation to communal services or general safeguards if a majority of eligible leaseholders voted in favour of the modifications. A lease can be varied only by mutual agreement of all the parties to the lease, or by reference to a tribunal or court. If one or more leaseholders believe that their lease in a block needs to be varied, the Landlord and Tenant Act 1987 already allows them to seek a variation from a tribunal, in particular circumstances, or a court.

The amendment tabled states that if a leaseholder or their proxy fails to vote, they will be deemed to have voted in favour of a proposal to vary a lease. I hope my noble friend agrees there may be many reasons why a leaseholder or their proxy could not partake in a vote. The amendment appears to be somewhat undemocratic in extrapolating a leaseholder’s non-vote to be a vote in favour for a proposal that would affect an individual’s property rights. As mentioned by the noble Lord, Lord Kennedy, I believe the noble Lord, Lord Campbell-Savours, raised this concern when the matter was discussed in Committee. However, I appreciate that my noble friend Lady Gardner has strong views and genuine frustrations on this. I would welcome the opportunity to meet her outside this Chamber to look at the voting procedure in right to manage and to consider, if necessary with the wider leasehold sector, whether any legislative or other changes are needed to address her concerns.

My noble friend mentioned that she did not really know whether majority should be defined as just over 50% or upwards. That leads me to believe that further discussion is needed. She also mentioned the question of 100% agreement. Again, I believe it was mentioned in Committee that the question of not being able to do anything without 100% agreement is not the case, because the right to manage companies need a majority of directors at a meeting of directors and 100% is needed only for the variation to the lease.

I am sure my noble friend will agree that it is important that we seek a greater understanding of the issue raised. I hope she will join us in looking at this in the wider context of the legislative framework on leasehold and the right to manage, and that we do not rush to make a change to the Bill. The noble Baroness, Lady Maddock, hit the nail on the head when she said that this was a challenging and complex issue. Although she did not say this, I believe this is something that should not be rushed and we should look into it in a lot more detail.

Amendment 102 was also debated in Committee and raised by my noble friend Lady Gardner. As I said, I agree with my noble friend on the importance of there being sufficient funds available for the repair and maintenance of leasehold blocks. Sinking funds can indeed play an important role in mitigating large, one-off service charge demands. However, as I set out in Committee, I believe that these concerns are unfounded. This amendment, while well intentioned, would conflict with existing requirements and responsibilities under the terms of the lease and the existing legal contract between the freeholder and leaseholder.

A lease provides for the collection of service charges for the maintenance of the block. In many cases, provision is also made for money to be collected to support a sinking fund. Where it does not—this is important—legislation makes it possible to seek a variation of the lease to provide for a sinking fund. It is sensible, clear and workable for the person responsible for the upkeep and maintenance of the building also to be responsible for any sinking fund. Separating this responsibility would create conflict and confusion with the existing lease, as would trying to dovetail separate responsibilities with the existing arrangements. Importantly, legislation enables the freeholder to be held to account on service charges, including any sinking fund. Leaseholders have the right to challenge the reasonableness of service charge amounts being sought, whether for day-to- day use or towards a sinking fund.

My noble friend raised the matter of a sinking fund and those with very small incomes, which is a fair point. Additional payments into sinking funds could be extremely difficult for those on small fixed incomes and it would not be right to force them to have a sinking fund if it was not already implicit in the lease when the funds may not be needed immediately or for many years.

I should like to address a matter that was raised by the noble Earl, Lord Lytton. He said that you cannot get an agreement from absentee freeholders or leaseholders. But if there is no sinking fund or any lease variation and leaseholders cannot get agreement, they can go to the First-tier Tribunal. I hope that reassures him.

[Viscount Younger of Leckie]

The noble Lord, Lord Campbell-Savours, was extremely helpful in debates on this matter in Committee and he raises an important point. That leads me to say that, as a result of this debate and the debate in Committee, we now want to work closely with my noble friend Lady Gardner and all those interested in the sector to consider the complexities of these detailed issues. We need to balance the rights of all parties and consider how well the existing routes to push necessary repairs or vary leases work through the First-tier Tribunal and look at how all the aspects are working. I would like, with the Minister, to meet my noble friend Lady Gardner to discuss this issue, and I am sure that all noble Lords who have taken part in this debate would be most welcome to attend. I hope that, with my assurance to take these issues forward and look at the complexities, my noble friend will feel able to withdraw her amendment.

[Lord Kennedy of Southwark]

If the House will indulge me, that offer is welcome, but it is fair to say that no one could accuse either this Government or previous Governments going back many years of any haste in dealing with these matters. I hope that we shall finally see some progress.

[Baroness Gardner of Parkes]

My Lords, the comments that have been made are very interesting and I am grateful to all those who have given their support. However, we tend to overlook the fact that there are now something like 6 million leaseholders, so we are not talking about a little subject. It is a pretty big one that is important to a great many people. It cannot just be brushed aside as something that it would be nice to do.

I would love to see a completely new consolidation Act for all property issues; I raised this at a meeting where I was asked to give a speech. I said that people should write to their MPs and press for one. A man who said he was a member of the Law Commission made it clear that the commission does nothing for nothing now, so the only way you could get it to prepare a consolidation Act, which it often used to do in the past, is by pre-paying for it. Some Government must decide that it is time to put all property legislation, which keeps a lot of solicitors happily and expensively employed referring to Act after Act with each one changing the previous one, into one Act. It is all piecemeal and there is no cohesion. Those 6 million leaseholders and the multiplicity of legislation are big problems for us.

The noble Lord, Lord Kennedy, said that this might well be a growing problem, and I think he is right. Foreign ownership and the fact that so many people are having to move out of London because service charges are too high are the reasons for these issues. What the Minister had to say was very good, but he has not really given an indication that he will say anything before Third Reading, which is coming up pretty soon. What I would like to hear from him is that he will look at another approach, either through regulations or in some other way, to deal with this. That, at least, would put his good intentions on the record. As I say, it is important that these issues are not just pushed aside, which has been the case too many times when I have raised them. This basically applies to the situation as set out in Amendment 101.

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[Lord Kennedy of Southwark]

My Lords, this issue was debated during consideration in Committee. I support the devolution of power to local communities and we should seek to achieve it wherever possible. I have advised the House before that I am a councillor in the London Borough of Lewisham and a member of the planning committee—I am going there tomorrow night. The ward which I represent is Crofton Park, where we are in the process of developing a neighbourhood plan. As noble Lords have said, that is not an easy process. It takes quite a long time and we are hopeful of getting to a point where we can put it to the vote in a ballot of local residents. But it is a complicated matter and a lot of work needs to be done. It is right that communities have a direct say in developments in their area, and the amendment provides a mechanism for a limited right of appeal in certain circumstances. The right of appeal would apply only to parish councils and neighbourhood forums whose plans progress to formal submission to the local authority.

We need to strike the right balance here, and that is often difficult to achieve. It could be suggested that objections could be raised just to stop developments, which is a fair point, but the amendment allows for appeals only in a fairly limited range of circumstances, at the risk of costs being awarded by a planning inspector if anyone made a vexatious appeal. The amendment is an attempt to strike the right balance. I am happy to support it, but I also accept the points made by the noble Lord, Lord Best, and the noble Earl, Lord Lytton.

[Baroness Evans of Bowes Park]

My Lords, Amendment 102ZA has enabled us to revisit our discussion on a proposed community right to appeal where there is an emerging or made neighbourhood plan, and I thank all noble Lords who have contributed today. Although I appreciate the intention behind the amendment, I cannot accept it and will explain why.

We have a long-established and much-valued right of appeal. It recognises that the planning system acts as a control on how an individual may use their land. This existing right of appeal serves an important purpose—to compensate for the removal of the individual’s right to develop—and there is no need to change this fundamental principle. That is because communities are integral to and involved in the whole planning process. They are consulted on the preparation of the local plan for their area from the earliest stages, through to making representations to be considered at the independent examination. The right of every community to produce a neighbourhood plan takes this further, allowing communities to set their own planning policies for the area. Those are the basis for decisions on planning applications and guide how the neighbourhood develops.

Importantly, communities can make representations on individual planning applications and appeals, and the Bill and new regulations will provide neighbourhood forums with the right to request notification of applications in their area, alongside being statutory consultees on their area’s local plan. The views of the community are considered at every stage in the decision-making process. Given all the opportunities that already exist, the Government do not believe that a community right of appeal is necessary.

It cannot be right for development that secures planning permission to be delayed and uncertainty created at the last minute by a community right of appeal. The amendment would serve only to discourage people from getting involved in the planning process earlier, or lead to repeated consideration of issues raised and addressed during the planning application process.

To reinforce what I said in Committee, decisions on planning applications must be made in accordance with the development plan, unless material considerations indicate otherwise. A made neighbourhood plan is part of the development plan and therefore already a powerful tool that must be the starting point for the authority’s decisions on applications. National policy is very clear: proposals that conflict with a neighbourhood plan that has been brought into force should not normally be approved.

We have also made it clear that an emerging neighbourhood plan can be a material consideration in planning decisions, including where there is a lack of five-year housing land supply in the local authority area. Decision-takers may give weight to relevant policies in emerging plans according to the stage that the emerging plan has reached, the extent to which there are unresolved objections, and the degree of consistency with the National Planning Policy Framework. The extent of local support should also be taken into account. I also remind the House that in January, we announced that for a further six months, the Secretary of State’s criteria to recover and decide planning appeals would continue to include housing proposals in those areas where there is a made or submitted neighbourhood plan.

We have a planning system that balances competing demands for growth and protection. We have asked local planning authorities to balance these competing considerations to deliver sustainable development. We must now allow them get on with the job. For these reasons, I hope that noble Lords will not press their amendments.

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[Lord Kennedy of Southwark]

My Lords, can the noble Viscount, Lord Younger, say a little more about these amendments? As has been said, on the face of it they could be interpreted as giving considerable power to the Secretary of State or the Mayor of London. Can the Minister also confirm that in the case of London they will be exercised only by the Mayor of London and will not be exercised by the Secretary of State as well? Can he also explain further, as the noble Lord, Lord Stunell, outlined, what he sees are the circumstances when the use of such powers would need to be considered, and can he tell us, for the benefit of the House, how they complement localism? It seems that localism is spoken of less and less from the Government Benches as we discuss these Bills and these issues. The noble Lord, Lord Stunell, outlined very carefully a number of very detailed questions and I look forward to hearing the Minister’s response to those as well.

[Viscount Younger of Leckie]

My Lords, I thank noble Lords for their interventions in this very short debate. I hope that I will be able to address the questions raised by the noble Lord, Lord Stunell, in particular, and the noble Lord, Lord Kennedy.

First, as regards statistics—my noble friend Lord Lansley raised this issue—the majority of authorities already have a plan in place or are working on their plan. Some 70% of local authorities—the figure I have—have adopted a local plan and 84% have published a plan. The point is that where an authority is not making sufficient progress on its plan, we have been clear that we will step in—but in consultation with local people. The whole aim is to accelerate getting a plan in place. Parliament has already given the Secretary of State the power to intervene in local plan-making, so to this extent we are not doing anything new.

The Bill allows targeted intervention in plans and keeps decision-making local wherever possible while still ensuring that plans are in place. This amendment ensures that where an authority has failed to set out publicly its intention and timetable for producing a local plan, we can take action to make this information available to communities. I should also try to reassure the noble Lord, Lord Stunell, that we are talking about quite a long time that local authorities have had to put a plan in place. They have had more than a decade to get their plans in place, so I regard this as being very much a last-resort issue. It is meant to be light-touch rather than bringing in a sledgehammer to crack a nut—and I hope that may help.

To go a little further, the noble Lord, Lord Stunell, raised the issue of the timing as to where and when the Secretary of State might intervene. We have consulted—

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[Viscount Younger of Leckie]

That is absolutely correct. If it had not be clarified before, it must be clarified. It is simply a means of taking over the plan-making process, not taking over the whole plan for good—that is a very important point.

We set out our proposals for prioritised intervention, where the least progress in plan-making has been made. Where policies and plans have not been kept up to date and there is higher housing pressure, for example, intervention will have the greatest impact in accelerating local plan production. To finish on that note, the fact is that where nothing is being done, it is right that as a last resort there should be government intervention. I hope that that will reassure the noble Lord, Lord Stunell, and the noble Lord, Lord Kennedy.

[Lord Kennedy of Southwark]

Can the noble Lord give us more information about where these areas are? Clearly he must have a list of what is going on, as the Government have clearly done some work on this.

[Viscount Younger of Leckie]

I can certainly write to the noble Lord with that specific detail, but, clearly, we are very wise to the fact that some local authorities have not produced a plan, and therefore we want to be sure to encourage them to do so. We are bringing in the encouragement and the nudge factor here, not the sledgehammer.

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[The Earl of Listowel]

My Lords, I had not planned to comment on these issues, because my experience is limited. I remind noble Lords of my registered interests as a landowner. I recall speaking some years ago with a young project manager on a development about extensive work she had done in consulting local people in taking forward this development. It seemed to her that she had done everything that the local planners had asked of her but she found that her work was not acceptable. She said that this was often her experience—one jumps through all the hoops and suddenly one finds that the hoops have changed. This is only one person that I remember speaking to about this issue, but it certainly left me concerned that there is not enough certainty in the system and that developers can put a lot of work into a project and find that suddenly the hoops have changed and different requirements are being asked of them. I just wanted to put that into this debate.

[Lord Kennedy of Southwark]

My Lords, Amendment 107ZZB in this group, in my name and that of my noble friend Lady Andrews, would delete Clause 136 from the Bill. The clause is concerned with permission in principle and was debated at some length in Committee in your Lordships’ House. Permission in principle is a major change in how we approve developments. It has, of course, been suggested that the supply of new homes is being held back due to the planning process and the failure to get planning applications approved. That is complete nonsense which has been cited by one or two noble Lords in debate on this issue in recent times.

I tabled a Question to the Government on this issue and received a reply from the noble Baroness, Lady Williams of Trafford, on 4 April. In her reply the noble Baroness confirmed that there were planning permissions for 658,000 homes in England where work was either not started or not completed. That is a large number of approvals. As a local councillor I have approved some of those applications over the last two years. In the area where I live I regularly note sites for which I have been party to approving an application for housing but nothing has happened. All that has happened on one site is that, a few days after the committee gave permission for housing, a “for sale” board went up saying, “for sale with full permission for housing and two shops”. That is all that has happened since we gave permission well over a year ago.

That is not the local planning authority dragging its feet or attempting to stifle development; no, there are other factors at play here which this clause does nothing about. It is about the value of land and the price it is rising at. It can also be about the ability to raise finance to undertake a development. It is not about a planning authority dragging its feet. We very much support building new homes, although we may seek to do it in a different way. We want to see brownfield sites brought back into use for housing and other ancillary and alternatives uses, but we have concerns about what will be built, in terms of design, space, energy efficiency and affordability. We want to see a range of tenures and the building of viable, long-term communities.

Government Amendment 106A confers additional powers on the Secretary of State. I draw the attention of the House to the 28th report of the Delegated Powers and Regulatory Reform Committee—in particular, the section concerning Amendment 106A which starts at the bottom of page 1 and carries on to page 2. The report concludes:

“Inadequate and incomplete provisions of proposed primary legislation cannot be excused on the basis that consultation has not taken place or that the Government wish to retain ‘flexibility to set out differing timeframes as they apply in different contexts’. The policy should have been finalised following appropriate consultation before, not after, the Bill was introduced.

We therefore consider that the delegation of power in the proposed new Section 59A(8) inserted by amendment 106A is inappropriate, and that the duration of permission in principle should instead be specified on the face of the Bill. An alternative approach, although we think that this is a less satisfactory option, would be to specify the maximum duration on the face of the Bill, coupled with an affirmative procedure power to provide for a shorter period”.

That is damning criticism by the committee and the Government should take heed of it.

To help matters along, I make the following offer to the Government. If the noble Baroness, Lady Williams of Trafford, will withdraw the amendment today with a view to reflecting on the concerns raised by the Delegated Powers and Regulatory Reform Committee and bringing an amendment back at Third Reading that takes those concerns on board, then in the same spirit we will not test the opinion of the House on our Amendment 107 in the next group, in my name and that of my noble friend Lord Beecham. Instead, we will wait to see whether we can get an amendment that addresses the concerns raised in the report. It is for the Minister to decide what to do and I hope the noble Baroness will take up this offer made in the spirit of wanting to get this right.

[Baroness Williams of Trafford]

My Lords, I thank all noble Lords who have contributed to this short debate. Let me clarify that the Government do want to get this right. We do not want PIP to be a disincentive to building homes or create risk in the system. I take on board what the noble Lord, Lord Kennedy, says about the comments of the DPRRC. I am very willing not to move Amendment 106A for the time being, and to use the next few days to perhaps bring something back at Third Reading.