Non-Domestic Rating (Lists) (No. 2) Bill

Debate between Lord Kennedy of Southwark and Baroness Thornhill

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Thursday 4th February 2021 Grand Committee

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, as this is my first contribution, I draw the attention of the Committee to my relevant registered interests: as a vice-president of the Local Government Association, chair of the Heart of Medway Housing Association and a non-executive director of MHS Homes Ltd.

Amendment 1 would put on the face of the Bill a new clause requiring the Secretary of State to publish a Statement setting out

“how the Valuation Office Agency and local authorities were consulted in relation to the provisions of this Act prior to its passage.”

A property’s rateable value, which business rates are based on, has been assessed independently of Ministers by the Valuation Office Agency since 1990. The Bill will, among other things, make a change to when the Valuation Office Agency must publish draft rateable values. The noble Lord, Lord Greenhalgh, has told us previously that this is to support the smooth transition of the revaluation. The publication of these draft rateable values will be aligned with the timing of decisions relating to the multipliers and transitional arrangements.

This is only a probing amendment and I am hopeful that the noble Lord will be able to set out for the Grand Committee exactly how what is asked for in the amendment has been done. If the agency and local authorities have not been consulted, can he tell us why not, and why the Government think that that is an acceptable course of action?

Amendment 6, in the names of the noble Baronesses, Lady Pinnock and Lady Thornhill, would insert a new clause into the Bill. I am very much in support of this new clause, as it would provide for an impact assessment of the timing of a rates revaluation. I am sure that we will get a full explanation of the amendment from the noble Baronesses.

There is of course a wider debate to be had about the whole question of business rates and their appropriateness as an element of local government funding. It is important to note that the Government have cut £15 billion from central government funding for local government in the last decade. The Covid-19 pandemic has had a catastrophic impact on local authority finances, with income falling and costs rising. The current lockdown, which is the right thing to do, will also have a serious impact. Here, the Government need to keep their promise to fully fund local authorities for the costs of the pandemic.

According to the Local Government Association, local councils in England will face a funding gap of more than £5 billion just to maintain services at current levels. But to respond to demand pressures and plug the existing funding gap, an additional £10 billion per year in funding will be needed by 2023-24. For those reasons and many others, which I am sure we will hear from the noble Baronesses, Lady Pinnock and Lady Thornhill, I support their amendment. I beg to move.

[Baroness Thornhill (LD) [V]]

My Lords, I, too, am a vice-president of the Local Government Association.

I wish to speak in favour of Amendment 6, which stands in my name and that of my noble friend Lady Pinnock, and to support Amendment 1 in the name of the noble Lord, Lord Kennedy of Southwark.

I am very aware that this is a narrowly focused Bill and that it has had broad support and been welcomed. However, it is significant that, despite that, several Members of your Lordships’ House have taken the opportunity to table amendments. I believe that that shows the depth of concern around the whole issue of business rates. The amount of interest shown in both this tightly drawn Bill and the Government’s consultation for their ongoing business rates review shows how important it is for the review to be both bold and radical.

It is also significant that all the amendments seek to hold the Government’s feet to the fire with regard to the various ongoing impacts of the Bill, be they on sports clubs, the high street or local government finance—hence, Amendment 6 stipulates a timeframe of six months. This is due to the fact that the instability and uncertainty provoked by the impact of Covid-19 are exacerbating issues that were already of significant concern—and we are not out of the woods yet.

Indeed, the amendment seeks to continue to draw your Lordships’ attention to the challenging situation regarding local council finances. The latest figures from the Local Government Association show that the financial impact of Covid-19 on local authorities is an estimated £9.7 billion for 2020-21, with a further £2.8 billion of lost income from council tax and business rates. However, it must be noted that these figures were reported before the lockdown and the spread of the new strain was known. This is a significantly different set of circumstances from when the 2020-21 funding package was last evaluated, and is part of the reason for continuing concern around council finances. I am sure it is appreciated by all noble Lords just how important business rates are to the individual finances of a local authority.

One reason for the amendment is to highlight the volatility of the tax base, which is so unpredictable at present. For example, the loss of office space to residential—a topic much discussed with the Minister in this House—is a trend that is likely to continue with inevitable loss of revenue. The Valuation Office Agency is currently negotiating appeals and challenges for offices, airports and factories under a material change of circumstances appeal, due to Covid-19. A rebate of up to 25% was mooted. The reduction in income could be substantial. If a rebate were forthcoming, would subsequent losses be repaid to local government in line with the recently announced tax income guarantee? Some 75% of losses will be guaranteed for 2020-21, but nothing has been said yet about 2021-22. Of course, local government must make up the other 25%.

The amount of money that councils have had to put aside for appeals is also significant, hence local government concerns around cutting down the window of time to appeal and getting the number of appeals reduced. The more certainty that we can add to the processes the better. To date, councils have had to divert £3 billion from services to appeals. A significant amount of money is also tied up in irrecoverable losses for both business rates and council tax. With debt recovery and enforcement activities understandably limited due to the pandemic, and with limits on activities and pressures on court time, councils’ ability to recover debts and secure income as they usually would, will be restricted. These are not usual times, and more businesses are likely to fail.

I use these points to illustrate one purpose of the amendment and the volatility of this important tax base. There is much instability in the system at present, which is being masked by the current, much-needed and much-valued reliefs offered to businesses from the Government. This could change significantly when the reliefs end; it could impact on local authority incomes, but we do not know when this will be. If the amendment is not accepted, could the Government at least agree to look closely at the impact once all reliefs have been suspended? This could provide vital evidence on which sectors are most impacted as well as on local councils’ finances.

Regarding Amendment 1, it was noted by several noble Lords at Second Reading that the VOA has been formally criticised as being cumbersome and difficult to deal with, and its valuations opaque and inconsistent. This is why I endorse what has been said by the noble Lord, Lord Kennedy of Southwark, and support his amendment and additional amendments tabled by my noble friends. In short, the amendment asks the Government how the pandemic that happening now will affect the revaluation in 2023, based on values at April 2021, which will not be looked at again until 2028.

Rough Sleeping

Debate between Lord Kennedy of Southwark and Baroness Thornhill

Thursday 27th February 2020 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, even if the Government’s figures truly reflected the scale of street homelessness, the situation would be horrifying. But the situation is even worse. Yesterday, an FoI obtained by the BBC showed that 28,000 people slept rough in the UK over the last 12 months, of whom nearly 25,000 were in England. This is five times the number recorded by the Government’s statistics, which blatantly hide the scale of the problem.

The Government have no basis to parade their own figures as anything resembling an accurate picture. In 2019, the Office for Statistics Regulation said that it expected the Government to plan for better statistics on rough sleeping. The recent defence that these statistics are only a good estimate brings into question why they were ever published. Can the Minister confirm that these government statistics have official statistics status approved by the UK Statistics Authority? If they do not, that is because they fail to meet official standards on trustworthiness, quality and public value. If they fail this test, they should never see the light of day. These figures are misleading and I would welcome an investigation into their accuracy. If the Minister is unable to confirm the status of these statistics today, could he write to me and place a copy of the letter in the Library?

In 2018, 726 people died homeless across England and Wales—the highest year-to-year increase since the ONS time series began. This is an emergency and requires emergency measures. The announcement of the £236 million and an urgent review to tackle rough sleeping is insufficient and shows that the Government are in denial of the problem. They have failed to properly address the issue over the past 10 years and must finally make it a priority, beginning with properly funding homelessness services. Such funding, in combination with supportive housing, has been cut by £1 billion a year, leading to 9,000 fewer hostel beds. Will the Minister tell the House what the Government will do to replace the beds that have been lost and provide new ones?

In recognition of the role local authorities can play, the Government must introduce a duty for councils, and proper funding with that, to deliver shelter and support, building on the emergency cold weather support that many already provide. The Government must, however, also look at why individuals and families become homeless in the first place. Many have found themselves on the streets after losing their privately rented accommodation—perhaps through extortionate rent increases or unliveable conditions, or through substance abuse. The Government must make renting affordable and give tenants the right to hold their landlords to account. There must also be recognition of the root factors that can trigger homelessness, be they substance abuse, domestic abuse, violence or mental health problems, so that support can again be offered to tackle these wider causes.

We can look back to the record of the Labour Government on homelessness and find that, by 2010, this had been virtually eliminated. Here we are back again, 10 years later, and it is back with a vengeance. Homelessness is not inevitable in a country as well-off and decent as ours, but the levels of rough sleeping under this Government have shamed us all. It is action, not words, that will put an end to this crisis; simply saying that rough sleeping is a priority for the Government is not good enough.

Just outside this noble House, in Westminster Station, there are people sleeping rough there now. In London Bridge—I walk through it most evenings—there are people sleeping rough in the station. I walked down Victoria Street to Victoria station: there are people sleeping in the doorways. Opposite Charing Cross station, people wait every night to get soup and bread from those who come to support them. We are one of the richest countries in the world; the homelessness we see on the street is an utter disgrace. As I said earlier, this was virtually eliminated by 2010 and the situation in which we find ourselves today is shameful and entirely of the Government’s own making. They get no credit for claiming to be solving the problem that had already been solved many years ago.

[Baroness Thornhill (LD)]

My Lords, I echo much of what my fellow local government vice-president has said. This is a huge public concern, and on these Benches—particularly from within the local government family—we have always had a “credit where credit is due” policy. On this occasion, however, we have to say that so far, it is not good enough. Context is all, and as the noble Lord, Lord Kennedy, has said, we need to be careful with the interpretation of the figures. Any decrease is welcome, so let us not be churlish about that, but in reality, according to the Government’s own figures—and they are surely not challenging their own figures—rough sleeping is still 141% higher than it was in 2010.

We all knew—those of us who have been out on the local authority counts night, searching under every flyover and in every station and shelter to make sure that we had an accurate count for the night—that we were underestimating the number of people because we knew all the homeless people in Watford by name. So where was Fred that night? That night he was probably sofa-surfing with somebody he had managed to get into a house with. I hope we can all agree, at least, that the current figures are inevitably an under- estimate.

Likewise, we hear that local authorities have suffered considerable funding loss in their budgets, but that is particularly so in relation to homelessness funding: £1 billion less was spent on these services last year than a decade ago. If that level of funding had been sustained—not increased, but just sustained—there would have been £6.2 billion more in services. On a very practical level from the homeless charity that I am involved with, all the funding is short-term: it is one-year funding. This gives charities and councils great difficulty in recruiting and retaining staff, as well as in sustaining long-term delivery. It is essential for these groups of people that we know that we can provide the services for the longer term. My question to the Minister is: is all the funding ring-fenced? Is there any chance, now that the Government are more stable, that they will look at three- or even five-year funding?

I particularly welcome Dame Louise Casey’s role. I think that she is a Dame who is prepared—as we northerners would say—to call a spade a shovel and that she will lift up stones. Can the Minister reassure us that her role will be to look holistically, compassionately and, particularly, cross-departmentally about the issues that affect homelessness? Let us take universal credit. Sanctions are automatic—we know this—but they do not take into account an individual’s circumstances or their vulnerability. Sanctions being implemented can make their situation more perilous. Delays in the housing element of universal credit being paid directly to the landlord lead to further issues. Issues around zero-hours contracts—if they eventually get work, it is very often in that area—can lead to a fluctuation that puts their situation in peril. As a direct consequence of all these things, private landlords are extremely reluctant to take these people on as tenants. That puts all the pressure back on local authorities to house people. The logjam is very much in move-on accommodation, which this money is for, which is why, on these Benches, we welcome it.

However, we see the issue as being the lack of social housing. It is noticeable even in the Statement that the terms “social” and “affordable” are being used inter- changeably all the time. Affordable is 75% of market rate and social is 50%. Can the Minister explain the Government’s policy? Is it to provide more affordable homes and have they given up completely on social homes to rent? Are they relying on councils to build social homes to rent? The unfreezing of the local housing allowance part of housing benefit is welcome, but in high-rent areas such as Watford and most of the south-east, it is still considerably less than the average rent. The shortfall is too great. It is certainly too great for this group of vulnerable people to make up the shortfall, so the private sector is largely out of the question.

Will Dame Louise also be looking at policies such as the Government’s Housing First initiative? When I saw this, it was about developers giving priority to veterans as one group, but when I looked at it further, I realised that it actually meant that there would be even fewer social homes available to vulnerable people. It sounded really noble and people agreed with it, but the actual reality of it will mean fewer social homes. A colleague on the Benches opposite—the noble Lord, Lord Young of Cookham—actually mentioned last week in Oral Questions what we have come to know as the viability loophole. We have been letting developers off the hook from providing social housing for years. As a result, social housing in this country has been decimated. Social housing is what this group of vulnerable people and others need. Surely, if the Government’s own side is saying that it is time to close the viability loophole, it must be time. Finally, is it not time to stop making homelessness a crime and to repeal the Vagrancy Act?

Town and Country Planning (Fees for Applications, Deemed Applications, Requests and Site Visits) (England) (Amendment) Regulations 2019

Debate between Lord Kennedy of Southwark and Baroness Thornhill

Monday 15th July 2019 Grand Committee

[Baroness Thornhill (LD)]

I thank the Minister for that concise and informative introduction. We understand the technical purpose of the SI, and particularly appreciate the need for local authorities to be able to recoup their costs. The uplift of 20% that he mentioned was certainly welcomed, although he is probably as aware as I am that there is still a gap.

Evidence shows that more and more people extend their homes rather than move, so an increasing number of prior approvals are being sought. Therefore, the ability to charge for that will be welcomed. I know from personal experience that there is a reasonable amount of work involved, the more so in larger extensions. Those usually involve conflict with the next-door neighbour, who of course has no means of stopping the development because these are permitted developments. Despite that, councillors and officers get drawn in and it all takes time. I am curious about how the nationally set cost of £96 has been arrived at, alongside other fees. Perhaps the Minister could point me in the right direction for an explanation.

As the Minister said, councils need well-resourced planning departments to deliver the Government’s ambitious housing agenda; on that we agree. There is also a national shortage of planning officers, and the cost of living in different parts of the country differs considerably and means that councils struggle to recruit or have to pay higher salaries if they are to function. Yet these fees are nationally set, so from Land’s End to John O’Groats they are the same. Are there any plans to allow a fair and transparent scheme to give councils flexibility to set appropriate fees that might reflect local circumstances?

Permitted development rights in general are being extended, the latest being, as the Minister said, in May this year, despite some serious opposition from organisations such as the Campaign to Protect Rural England, the Town and Country Planning Association and others that have genuinely well-documented concern that in the Government’s legitimate desire to increase the number of homes, which we would absolutely agree with, issues such as quality and sustainability are being totally neglected, and that the most recent liberalisation of permitted development on the high street could be a blessing or a curse depending on local circumstances. Councils’ only recourse is to apply for an Article 4 direction to remove that automatic right. I know from personal experience of how difficult it was to get an Article 4 direction placed on our premier office headquarters area that this is neither speedy nor simple. We succeeded, but it was an expensive, tough battle. Do the Government keep records of the number of councils that apply for an Article 4 direction and how many are actually granted? The Minister mentioned other reviews; are there any plans to review the impact, good or bad, of the extended permitted development rights, particularly on quality and sustainability?

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I draw the Committee’s attention to my relevant registered interest as a vice-president of the Local Government Association. As noble Lords have heard, these regulations will remove the sunset clause to enable fees to be charged beyond the date the noble Lord referred to and introduce an additional £96 fee for prior approval applications for larger new extensions.

As far as they go, I am very happy to support the regulations. The increases in fees in recent times have generally been welcome, but it is still fair to say that planning departments are still being subsidised by the local council tax payer. We should try to eliminate that over a period of time. I agree very much with the comments of the noble Baroness, Lady Thornhill, who asked how the £96 fee was arrived at. It would be good to hear that from the noble Lord, Lord Bourne, because it is a fair point that there are different associated costs across the country. How was this one figure reached? I look forward to hearing that.

I have mentioned many times during these debates that the Government often want to try new things out, such as new pilot schemes. I have asked many times: why can we not find just one volunteer authority to look at full cost recovery of planning fees? Surely we can find just one council in England to do that for us to see whether full cost recovery would work. It might not, and the pilot might show that that is the case, but I cannot see why we cannot find just one council somewhere in England to pilot full cost recovery on planning fees for the Government to see what effect it has. We hear lots of stuff about planning, most of it a load of old nonsense about how planning committees and planning departments are holding up all this housebuilding. It is absolutely rubbish. Was it 300,000 applications without a brick being laid? I know that the noble Lord did not say that, but we read this rubbish all over the place. I do not see why we cannot look at full cost recovery and at how it is not the planning regime, the council or the planning committees holding up housebuilding.

Having said that, I have no objection at all to the regulations. I am very happy to approve them and I look forward to the noble Lord’s response to the few points that I and the noble Baroness, Lady Thornhill, have raised.

Tenant Fees Bill

Debate between Lord Kennedy of Southwark and Baroness Thornhill

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

[Lord Kennedy of Southwark]

My Lords, all the amendments in this group are in my name except Amendment 37, although I support that amendment as well. They seek to amend Schedule 2, which concerns holding deposits. Amendment 33 would remove from the Bill the ability for a holding deposit to be withheld if the prospective tenant is prohibited from being granted a tenancy due to the restrictions of the Immigration Act and has failed the right to rent check. It is of course a probing amendment and I look forward to the Government setting out their case to justify this part of the Bill.

Amendment 34 would strengthen paragraph 8 of Schedule 2 by adding the word “knowingly”. That is a reasonable bar to have to reach for a deposit to be lost. Otherwise, it is unfair on the prospective tenant. If you knowingly provide false and misleading information, fine, but if it is unintentional, it seems harsh that the deposit can be withheld.

Amendment 35 would allow a tenant to decide not to proceed with a tenancy by notifying the landlord or letting agent before the deadline. It gives the tenant a reasonable period in which they can change their mind and not lose the deposit. I hope the Government can respond positively to that amendment.

Amendment 36 seeks to put into the Bill a requirement, where a holding deposit is withheld, that the landlord or agent say why they are doing so; that they set out the information they believe is false or misleading and which has been relied upon to withhold the deposit; and that they explain how the tenant can challenge the decision, including how to get advice on doing so, to ensure that the decision is sound. Again, I hope that the Government can respond to this amendment because people should be able to understand why a decision has been made and be clear on whether there is anything they can do. If your deposit is withheld, it must be right that you be told why and that the reasons be set out. If you do not like the decision, you should be told where you can go to get further advice and challenge it.

The final amendment in the group, Amendment 37, has been tabled by the noble Baronesses, Lady Grender and Lady Thornhill. It looks sensible and I look forward to hearing the explanation behind it. I beg to move.

[Baroness Thornhill (LD)]

My Lords, I rise to speak briefly to the final amendment in this group, Amendment 37. I thank the noble Lord, Lord Kennedy, for his remarks and I should say that we support his amendments.

If the Bill is rightly concerned with redressing the balance of power a little more towards tenants, this modest amendment would surely do that. Its purpose is to ensure that on payment of a holding deposit, which can sometimes be a significant amount of money, the tenant actually gets to see the tenancy agreement and therefore knows the terms of the contract that they will be asked to sign and abide by. The real question is whether there is a good reason for tenants not automatically and always being given this right. I am at a loss to understand this. In life, if we buy a product or a service, we see all the terms and conditions. We tick the “I agree” box online, while on paper we sign on the dotted line—although, like me, I suspect that we do not actually read all of the small print. The situation we are discussing would not arise in any other consumer transaction, so the amendment seeks to ensure that the same applies when people rent their home.

It is impossible for tenants to spot and negotiate out of the tenancy agreement any unfair terms if they have not received it before signing or moving into the property, the more so as they might ultimately incur default fees. Even if they receive the agreement in good time, they do not have much power to negotiate the terms because they stand to lose their holding deposit if they walk away. The ability of tenants to negotiate unfair terms out of a contract would be made just a little easier through the provision in this amendment.

It is equally important that the Bill makes it clear that the draft tenancy agreement must meet a certain universal standard. Thus the amendment refers to the Consumer Rights Act 2015, the legislation that would form the basis for the standard. The rationale is that if the tenancy agreement contained unfair terms, the tenant could ask for those to be removed. If the landlord refused to remove them, the tenant could pull out of the tenancy and claim the holding deposit back on the basis that the draft agreement did not comply with the Consumer Rights Act.

Existing government guidelines for the Act on what are and are not “unfair terms” are quite clear. They talk about transferring risks to consumers—in this case the tenant—that cannot be controlled. The tenancy agreement might be the first time the tenant gets to see what default fees the landlord is setting, and sometimes, even more significantly—and perhaps horrifically—it does not specify the level of default fees they might subsequently wish to apply. Efforts elsewhere in the Bill to define default fees more tightly might help to address these concerns, but surely it is both fair and reasonable for tenants to have some ability to negotiate the terms of their contract before signing it.

Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill

Debate between Lord Kennedy of Southwark and Baroness Thornhill

Committee: 1st sitting (Hansard): House of Lords
Tuesday 19th June 2018 Lords Chamber

[Lord Kennedy of Southwark]

My Lords, the previous couple of debates have highlighted why this amendment is needed. We have talked about the effects of the Bill—although it is a small Bill—particularly with regard to council tax payers and empty properties. I think it is worth having in the Bill a clause that enables the Government to review—my amendment suggests within 24 months—what has happened in respect of Clause 2 and the impacts of the decision. My amendment also requires that after the review a report is laid before Parliament.

The noble Baronesses, Lady Pinnock and Lady Thornhill, have tabled a very similar amendment. Subsection (2) of their new proposed new clause suggests that,

“the Minister may also consider the impact of any penalties imposed on persons for failing to register their dwelling as empty”.

I am happy to support that as well. Considering the debates we have had on the previous groups, having a mechanism whereby the Government can look at the effects of the Bill, small though it is, is a good thing to do. I beg to move.

[Baroness Thornhill (LD)]

My Lords, I declare my interest as a vice-president of the Local Government Association. I fully support the words of the noble Lord, Lord Kennedy. I thank the Minister for the very detailed and informative letter he sent all of us after Second Reading; in particular, his response to my comments on fiscal incentives and deterrents with regard to empty homes. I really appreciated that and took on board what he said. Perhaps he will indulge me by allowing me to hang on to the one measure that he did not elaborate on—that is, the matter of penalties.

It is probably little known that councils actually have the ability to levy a civic penalty on an owner for not informing councils that their home is empty. It is not surprising that it is little known; the maximum penalty for doing so is actually £70, so it is no surprise that it is rarely, if ever, used, and that the general public are oblivious to it. In fact, I suspect that if we talked to the general public we would find they believed that by informing the council that their home was empty they would actually pay less or no council tax, so that shows that we have a long way to go. As the average council tax, the band D monthly payment, is now around £165 a month, a penalty of £70 is nothing—it is neither a penalty nor a deterrent. So this is a small matter but I feel that the two should have been taken together. If we are going to, justifiably and rightly, hike up council tax premiums, the penalty that goes with not informing the council should send the same level of message—£70 is, frankly, derisory.

I see both these measures—the penalty and the increased premiums—as really important in motivating councils to move this up their agenda. I say this with a degree of experience in local government, particularly in district councils where this is not a priority, largely because of costs. At Second Reading we heard a lot about powers not being used because of costs, but I think that together these two things would encourage councils to publicise the need to not leave homes empty, and to make it a publicly unacceptable issue so that people would be enraged by it and want us to do something about it. If there were to be a review, would we also review penalties in this regard, as I feel that it would be a missed opportunity if we did not? I beg to move.

[Lord Bourne of Aberystwyth]

I am very grateful to the noble Lord, Lord Kennedy, and the noble Baroness, Lady Thornhill, for their contributions on this group of amendments that relate to how we seek to address the penalty point just covered by the noble Baroness and the issue of the review, which was raised by the noble Lord.

The amendments would require the Government to review the impact of the increase in the maximum permitted level of the empty homes premium. I pause briefly to say that I think I am going to organise a list of all the things that the noble Lord, Lord Kennedy, has asked us to do reviews on. I know that he very often says that we have so many things out for review and then we have a critique of that, but we have had a couple of issues today at least where he has asked for reviews. I am only teasing.