Housing and Planning Bill
Debate between Lord Kerslake and Lord Porter of Spalding
Lord Kerslake
My Lords, I rise to speak in favour of Motion D1, in my name. These amendments take on board the debate that we had about the perceived restrictive nature of the previous amendments and are changed in some important and significant ways. The first part of the Motion, Amendment 47B, is new and simply confirms that, where a local authority enters into an agreement with the Secretary of State on the one-for-one replacement of a vacant council property that has been sold off, it will be able to retain the funding needed to build a new affordable home. An affordable home would, under the Government’s definition, encompass social rented, affordable rented, shared ownership and, indeed, starter homes. It would be for the local authority to decide whether it wished to enter into an agreement with the Secretary of State and, under this amendment, for the Secretary of State to agree whether they wish to do this—no restriction on either side. If it does so, the local authority will be required to replace one property sold with one new one, which was a welcome addition during the debate on the Bill. However, it will also be for the local authority to consider whether the new affordable property is for rent or for sale, based on the assessment of local needs. The amendment puts beyond doubt in the Bill that the local authority will be able to retain the funding required to deliver this replacement. As such, it is entirely consistent with the Government’s manifesto and I hope, therefore, that the Minister can readily accept it.
Amendment 47C builds on this issue and seeks to put beyond doubt that, where a local authority can make the case—this is in addition to the Secretary of State—on the basis of its particular needs, it will specifically be able to fund the provision of the new dwelling as social housing on a like-for-like basis. Again, the choice is there for the local authority to make its case to the Secretary of State and it is for the Secretary of State to take a view on that case. If they both conclude that there is already sufficient social rented housing in the area, the local authority can choose to build affordable housing for sale or affordable rented housing at a higher level of rent. However, if they conclude that they want to replace with a social rented property, the local authority can make the case on the grounds of its particular need and this amendment will give it the opportunity to do so.
Why is this amendment needed? First, because the other routes to deliver social rented and affordable rented housing will be severely curtailed by other actions that the Government propose taking, both under this Bill and outside it. The new starter homes requirement that we have just discussed will squeeze new social rented housing out of Section 106 planning agreements. Grant funding for new affordable rented properties by the Homes and Communities Agency will almost entirely cease after the current affordable housing programme ends in 2018. The reduction of rents by 1% per annum over the next four years will make it much harder for housing associations and local authorities to deliver viable schemes with social rented housing in them. Taken together, these changes present a formidable challenge to the continued delivery of affordable and social rented housing. Therefore, the ability to replace the forced sale of vacant council houses represents one of the few routes that will be available to secure new social rented supply.
My second reason for these amendments is to provide some protection for local government against the huge unresolved issues in this policy. Since Third Reading, the Public Accounts Committee has published its report on the extension of right to buy. It makes for sobering reading, to say the least. I will quote a small part of it:
“Despite the implications and complexity of this policy, the Department has not published a detailed impact assessment to inform Parliament’s consideration of its legislative proposals. Many key policy details have not been clarified, with the Department offering only vague assurances as to how this policy will be funded, without producing any figures to demonstrate that additional funding from central or local government will not be required”.
It is worth noting in this context that Shelter has issued research today which suggests that local authorities will need to sell off some 23,500 properties a year— 30% of their vacant stock—if they are to deliver the level of receipts set out in the Conservative Party manifesto. Given the potential scale of the impact and the verdict of the Public Accounts Committee, it is not unreasonable to look to provide some protection for local authorities in the Bill. The risk otherwise is that proper replacement will be the first thing to go.
My third and final reason for these amendments is the desperate need for more housing for those on low incomes. In some low-demand areas, social rents are little different from market rents, but in other areas, particularly London and the south-east, the problems are acute. Average market rents in London are now some £1,400 per month, or £16,800 per year, making it pretty tough for the median earner in London on a salary of £30,000. They are completely beyond the range of those on lower incomes. Rents for social housing are typically one-third of that level, making it accessible to ordinary people. But we are simply not building enough new social rented housing, and just one consequence of that is that some 3,400 families with children in London are living in temporary accommodation. This is a scandal and something that all political parties are committed to ending. The forced sale of higher-value properties—typically bigger family properties—in the highest demand areas without proper like-for-like replacement will make these problems even greater.
I have gone through these issues at length to emphasise just how much is at stake and why these amendments are so important. They confirm the funding of one-for-one replacement and provide the opportunity to deliver new like-for-like social housing where a local authority wishes and where it can make a persuasive case to the Secretary of State on grounds of need. These are not restrictive amendments, they are enabling amendments to address a very serious issue. I hope the Government will recognise this issue and that noble Lords will support Motion D1 when we come to vote on it.
Lord Porter of Spalding (Con)
My Lords, I rise to speak against Motion D1. Again, that is very difficult to do given that the sentiment that is supposed to be behind it is something I am trying to support, but it is written in a way that I cannot. I refer noble Lords to my interests in the register, which have not changed since I last referred to them.
I seek the Minister’s confirmation that the Government intend to stick to their manifesto commitment. To avoid any doubts about what the manifesto commitment was, this time I am going to read it, because nobody else has referred to it, just to make sure that we are all talking about the same thing. The intention behind it was that we would retain sufficient high-value asset sale receipts to replace the units sold. That was confirmed by the Prime Minister, who said:
“As the most expensive council properties fall vacant, we are going to require councils to sell them off ”,
which is fine as stock management,
“and we’ll replace them with new affordable housing in the same area”.
That should deal with it being affordable, which just leaves us with the argument about what “affordable” is.
Housing and Planning Bill
Debate between Lord Kerslake and Lord Porter of Spalding
Lord Kerslake
My Lords, I speak very briefly in support of the spirit behind the amendment and what is sought to be achieved. I will not repeat the arguments that have already been made, but I will refer to the experience I had during the London Housing Commission, where I consulted extensively with developers across every type and scale. The consistent and unanimous view of all those developers was that they were willing to pay more to get a better service.
What they described to me was a service that was truly struggling to do the job, where major and important applications were held up through the absence of good-quality staff and where they often experienced dealing with temporary staff who were learning on the job and did not have the authority to make decisions. This is, in any description you care to think of, a false economy. The improvement by way of inflation will be helpful but it does not go to the heart of the core problem, which is that, in the situation of severe funding challenges in local government, authorities are unable to resource, in the way that is required, the level of planning services that we need to deliver the increase in housing supply.
I am absolutely of the view that there should be a link to performance here, but I also believe very passionately that we should give local authorities the local initiative and flexibility to set their own fees. Over time the consequence of this will be that they will be able to plan for increased resources and, crucially, recruit new, skilled staff and rebuild a profession which, in the public sector, has been severely reduced in its capacity.
Lord Porter of Spalding (Con)
My Lords, strangely, I am going to speak against the amendment, because of the second part. I am not sure why this amendment is not linked to the one about the private sector being able to compete against local government to do planning. In my mind they should go together. There is no way that the private sector will pick up any planning applications if it is only allowed to charge the current fee structure that we as councils are allowed to charge. That is because in the last three years the taxpayer subsidy to planning has been £450 million. The private sector will not engage on that.
Without the second part being in there, it would allow local government to be put in the right place to prevent the private sector being able to take the work at a subsidised rate for itself. The risk seems to be that, when we get to that part of the Bill, private sector firms will be allowed to charge excessive fees and make money, safe in the knowledge that there will be an expectation that they will be more sympathetic to the applicant. I think a true level playing field would be one in which we charge full cost recovery and for those applications that are minor, where that would not be possible, there needs be a different mechanism. That is why I cannot support the amendment as written.
On the next amendment, on the retrospective planning application, again, we need some way to penalise serial offenders who wilfully abuse the planning system by not seeking planning permission in the right way when they first set out on their projects. Again, I am not sure how that should be worded in a way that will deliver it to best effect for everybody, because there will be genuine cases where some people simply were not aware that they needed to make a planning application. So any amendment must recognise that for me to be able to support it. As I have said before about any amendment that has “local government must” in it, there is no way I can support the third part of that amendment, where it says that we “must consult”. I do not think that local government ever “must” do anything. I think we should always “may” do something.
Housing and Planning Bill
Debate between Lord Kerslake and Lord Porter of Spalding
Lord Kerslake (CB)
My Lords, I shall speak briefly in support of the amendment and in doing so repeat my interests as chair of Peabody and president of the LGA.
I am a passionate advocate of close links between housing associations and local authorities. There is a huge amount of close working that they can and should do together, not just on housing but on issues to do with employment and social care. I also agree with the noble Lord, Lord Shipley, about the need for housing associations to be open to review and scrutiny, and for debate with local authorities about what they are doing in their local area.
As I understand it, this is a very specific issue that relates to the classification of housing associations and how we move from the current—I think, by common consent—unsatisfactory position whereby they are classified as public bodies to one where they return to being classified as private bodies. The issue here is about nomination and therefore the implication of some level of control, rather than participation that might come through the normal routes of filling board membership of housing associations. Therefore, it is not an issue that should in any way prohibit housing associations having local authority members or officials on their boards, but the process by which they become board members would be more in line with those processes for other board members. It is unfortunate that the measure has come this late, but I think that it is an inevitable consequence of the negotiations that are going on with the ONS and it is the direction of travel we need to go in.
Lord Porter of Spalding (Con)
My Lords, perhaps I may seek clarification that we are talking only about nominations to boards of RSLs and not nomination rights over where the tenants who occupy their homes come from. All those homes that were transferred under LSVT were transferred on the basis that the host council which decided to transfer would maintain its nomination rights. I appreciate that the noble Lord, Lord Kerslake, is slightly conflicted by having to take an LGA position and an RSL position which are completely opposed to one another on this issue, but sometimes we all have to be Janus-headed.
My concern is not about who sits on the boards, because I think the RSL experiment has failed and I am not sure how many councils would want to be associated with it, but about the loss of nomination rights. Those LSVT units were all taken out of council control; they are not private sector homes—or they were not when they left. The Labour Government who did the transfers assured everybody that they were not being transferred to the private sector. If we are now saying that they are, we must at least honour the agreements under which they transferred. While I will support the Government on this, because it is not an issue I would want to die in a ditch over, I think that it is a lost opportunity. We should take all social housing off the public sector debt book so that we can borrow money against it to provide the homes that we badly need. There are 4 million under-sweated assets out there and we should all be able to do the same thing.
Housing and Planning Bill
Debate between Lord Kerslake and Lord Porter of Spalding
Lord Porter of Spalding
My Lords, I do not wish to drag this out any longer, but I feel the need to support this amendment given that I am the chairman of the Local Government Association and local government nationally is subsidising the planning system by about £150 million a year. As the noble Lord, Lord True, said, to make money on planning is probably a step too far, but we should certainly be in a position where councils are able to fully recover costs. I know that the previous coalition Government gave the first decent increase in planning fees for a long time, but that was a fair while ago, so it is about time someone looked at the way that we are dealing with planning permissions. I add my support to the previous two speakers to ask the Minister to make sure that when she is speaking to her colleagues this is something that is looked at.
It works in the industry’s interest to have well-resourced planning departments. It enables us to do planning permissions in a stronger, quicker way so that the industry benefits. I do not think anybody would suggest that we should make money on this, but we should certainly be able to fully recover the costs.
Lord Kerslake
I add my support to this amendment, which goes to the heart of an issue of performance and capacity in local authorities. One thing that we did as part of the London Housing Commission was to talk to developers and housebuilders. Absolutely consistently, every single one of them raised concerns about the impact of budget reductions on the capacity of planning departments. It was not simply the number of planners; it was also the fact that often senior positions had been taken out in order to save money and they would be dealing with quite junior planners who did not have the authority to take a decision. They were often temporary and then moved on just at the point that the report might be going to committee. This costs housebuilders and developers a huge amount of money. I did not find a single developer or housebuilder who was not prepared to pay more for the planning service in order to tackle this issue—not one, and I talked to literally tens if not hundreds of different people through the course of this commission.
That is an issue for London, but I believe that it goes beyond London. It has always been incomprehensible to me why we do not go with a model that says: charge the proper rate—not an excessive charge, but the proper rate—for the job that needs to be done. We have planning performance agreements, but they simply do not go to the heart of the issue, which is the ability for local authorities to reliably plan their resources based on a high level of fee income. I strongly support the amendment and hope that the Minister will seriously consider its contents.