Housing and Planning Bill
Debate between Viscount Younger of Leckie and Lord Campbell-Savours
Viscount Younger of Leckie (Con)
My Lords, before we get into our discussion of the main issues of the day, we will start with a group of amendments that are undoubtedly minor and technical in nature. I hope, therefore, that we will be able to make rapid progress. The amendments address a small number of technical amendments that are required to provide additional clarity or implement technical corrections to a number of measures.
I shall start with Amendment 1. I hope that it is clear that it was always the intention that Clause 54 would not apply to individuals who carry out property management work under a contract of employment, in the same way that Clause 53 does not apply to individuals engaged in letting agency work as part of their contract of employment. However, the current drafting is not explicit on this point. The amendment inserts a minor and technical amendment to Clause 54 that makes it clear that it does not apply to employees.
Amendment 9 makes a minor and technical change to the interpretation of the chapter as a consequence of the changes to the housing administration objectives already agreed on Report. Unfortunately, in making the other changes, the definition of the objectives of housing administration in the interpretation chapter became inaccurate. This amendment corrects that inaccuracy.
Amendment 12 amends the new clause tabled by my noble friend Lord Lucas on Report on planning freedoms. We understand that the intention was that Clause 154 would allow the Secretary of State to make planning freedom schemes only in England. However, the current drafting is not explicit on this point. I am therefore proposing, in the interests of clarity, simply to add the words “in England” to the end of subsection (1). This will make it explicit in the legislation that the power to make planning freedom schemes applies only in England.
Amendment 13 removes a superfluous consequential amendment from Clause 181 on the appointment of an inspector, while Amendment 14 is a minor amendment to Clause 196 about the payment of interest on late payments of advance payments of compensation, which is consequential on an amendment made on Report. It inserts a reference to new Section 52(4ZA) of the Land Compensation Act 1973, inserted by Clause 195(2)(b) of the Bill, which refers to the date by which an advance payment must be made.
As I mentioned, these amendments are intended to provide clarity and remove any ambiguity that might remain within their respective clauses. I beg to move.
Lord Campbell-Savours (Lab)
My Lords, I am sorry to delay proceedings, but I am a little confused by Amendment 1. As I understand the Bill, the banning order offences are to be specified in regulations which we have not seen. They will define the nature of the offences that can lead to a banning order. Under Clause 14(2), if a banning order is made against a corporate body, it must be made at the same time in the case of “any officer” involved in “the same offence”. Under Clause 13(1)(c), the banning order applies to people involved in “property management work”, yet the amendment seeks to exclude people employed under a contract of employment. The Bill goes on at page 26 to define who these employees are. They are defined as,
“any director, secretary or other similar officer of the body corporate, or … any person who was purporting to act in any such capacity”.
How can we possibly exclude people who are the directors of a company? I understand that it is quite usual for directors themselves to have contracts of employment. Are they somehow to be excluded from responsibility which might lead to a banning order when in fact they may well have taken the decision that led to the banning order having to be introduced? I wonder whether the Minister can clarify the position.
One of the problems is that in the Bill there are references to different groups of people, but I think they are actually all meant to be the same—that is, people who are involved in property management, people who are property managers and people who are officers, and I think that there is another category as well. Perhaps the Bill should have been clearer in defining these particular different individuals and describing them in one particular form instead of under three different headings.
Viscount Younger of Leckie
My Lords, I hope I can provide some clarity. It is true that the amendments are minor and technical, but let me try to explain. The purpose of the amendment is to make it explicit in the legislation that Clause 54 does not apply to individuals engaged in property management work under a contract of employment. The noble Lord, Lord Campbell-Savours, may remember that on Report we made a number of amendments to the housing administration section of the Bill, and unfortunately, during this process the definition of housing administration objectives became inaccurate. This amendment corrects the definition.
To give a little more detail, it may help the noble Lords, Lord Kennedy and Lord Campbell-Savours, if I say that I believe that officers are defined as directors or executive members of a company. Given that this is technical, it would be wise if I gave a fuller answer than the one I am giving at the Dispatch Box now, so I will write to all noble Lords with a description.
Lord Campbell-Savours
The amendment says:
“But a person is not a property manager for the purposes of this Part if the person engages in English property management work in the course of that person’s employment under a contract of employment”.
A director of a company involved could have taken the decision that led to the banning but, as far as I can see, would not be responsible under this clause. Is that the intention, or am I simply misunderstanding what the Bill says? I think we should have a bit more information while the Bill is in this form, on Third Reading, because this is our final opportunity.
Viscount Younger of Leckie
My Lords, just when you thought it was nearly over, I want to return to the issue raised by the noble Lord, Lord Campbell-Savours, about the application of amendments discussed earlier. He asked questions about the definition of a letting agent and the difference between someone who works for a letting agent and a member of its management. Clause 53 provides that a letting agent is a person who engages in letting agency work but qualifies that definition by stating that a person who engages in letting agency work in the course of their employment, under a contract of employment, is not to be regarded as a letting agent. This distinction means that someone who simply works for a letting agent is treated differently from someone who owns the business or is a director, company secretary or other similar officer of that company.
Clause 54 provides that a property manager is a person who engages in English property management work. The intention has always been to exclude ordinary employees of a property manager from that definition, for the same reason that we excluded ordinary employees of a letting agent. That is why we have tabled an amendment at Third Reading which excludes ordinary employees of a property manager from the definition. The amendment, however, is not intended to capture a director, company secretary or other significant employee of the company. For example, if a property management company faces a banning order, the directors could also be banned if they had committed the banning offence, but we would not want to ban every employee who had simply been acting under their contract of employment. I hope that helps to make the distinction.
Lord Campbell-Savours
That is not what the amendment says. It does not draw a distinction between the two classes of employee that the noble Viscount has referred to. He is drawing a distinction between directors and what he calls normal employees, and it is not clear from the amendment that that is what he is doing there.
Viscount Younger of Leckie
I was trying to make that clear distinction between those who own the business and those who are employees, and the difference between those under a contract of employment and those who own the business. As I said earlier, it would help if I left the matter here and wrote to the noble Lord.
Lord Campbell-Savours
I am very sorry, but both have contracts of employment. That is my point.
Housing and Planning Bill
Debate between Viscount Younger of Leckie and Lord Campbell-Savours
Lord Campbell-Savours (Lab)
My Lords, I totally oppose Amendment 119B. I made a long contribution in Committee —I think it was 18 or 20 minutes—on the whole question of the compulsory purchase of land.
I want to ask the mover of this amendment and his supporters a very simple question. In Committee I drew attention to the value of agricultural land, and the value of that land when it is given full planning permission. If I go by memory, I quoted figures of £880,000 in west Cumberland, where my former constituency was; £4 million per hectare in Watford; and £7 million per hectare somewhere on the southern outskirts of London, although I cannot remember the place exactly. Why should a landowner have the value of his or her land transformed from between £15,000 and £20,000 a hectare to between £4 million and £7 million a hectare simply on the stroke of a pen designating a national infrastructure scheme somewhere in the UK? What right does he or she have to that increased value on land to which they have done absolutely nothing to secure that additional value apart from own it?
When our fathers went to war in the Second World War, they did not fight for a country where people could make vast fortunes simply by holding land. The cost of that land falls upon people all over the UK who now cannot afford to buy a home, particularly in our major cities. The price that they are paying for all that is to feed the landowners who own the land, who should be readily giving up that land to help to deal with the national housing crisis at the price of its worth to them in its existing use, but of course they do not want to do that.
If people outside reading Hansard think the amendment is complicated, it is actually quite simple: it would protect landowners and their wealth, and the people who would pay for that are the people who cannot afford to do so—young people throughout the country who cannot afford to buy a home.
Viscount Younger of Leckie (Con)
My Lords, the noble Earl, Lord Lytton, has helpfully expressed concerns about landowners losing out from any uplift in land values when the compulsory acquisition of land is sought for housing as part of an application for nationally significant infrastructure. He has also raised the important issue of how claimants are treated by acquiring authorities. I recognise that these are also issues of concern for members of the Country Land and Business Association, who met the Minister for Housing and Planning last week to discuss these matters and our proposals for further compulsory purchase reforms, which are now out to consultation, which the noble Earl alluded to. We welcome these discussions with the CLA and look forward to receiving its further thoughts in response to the current consultation.
I turn first to Amendment 119B. We had quite an interesting short debate, particularly with the intervention just now from the noble Lord, Lord Campbell-Savours. In response to the noble Earl, and taking account of the comments from the noble Duke, the Duke of Somerset, I can only reiterate the main points of the response to the amendment made in Committee. A key principle under the Land Compensation Act 1961 is that compensation is offered at the open market value of the land. The open market value will take into account the effect of any existing planning permissions, and any that might be given in future in accordance with the planning assumptions in the 1961 Act. Any increase or decrease in value that is due solely to the scheme that will acquire the land—for example, a nationally significant infrastructure project including related housing development—is disregarded. The same principles apply irrespective of the powers under which compulsory acquisition is granted.
Amendment 128YAR would introduce a statutory duty of care to be owed by acquiring authorities to claimants. I agree completely with the noble Earl, Lord Lytton, that those whose land is being taken by compulsion should be treated fairly and with respect. I also listened carefully to the comments from the noble Lord, Lord Cameron, and I know that stretch of the A303 reasonably well. I also respected the comments made by the noble Duke, the Duke of Somerset. However, I do not think that imposing a statutory duty is necessary to achieve that fairness and respect. Instead, the way forward is to set out clear expectations for acquiring authorities’ behaviour in dealing with claimants in guidance, and to ensure that the system itself is fair to claimants. We have done the former already: updated guidance was published in October 2015. The latter is being addressed through measures in the Bill; provisions on lengthening the notice before entry and earlier advance payments will make the system fairer for claimants. We are also consulting on further proposals to ensure that claimants receive fair compensation, to further encourage the prompt payment of advance payments and to ensure that claimants in areas with high rateable values are not systematically excluded from issuing blight notices.
As I am sure the noble Earl will appreciate, Amendment 119B would require a fundamental change to the provisions for assessing compensation for land compulsorily acquired in the Land Compensation Act 1961. For that reason, we will be unable to support this amendment. On Amendment 128YAR, as I have explained, the Government do not consider that a statutory duty of care is necessary. I know the noble Earl will be disappointed by this, but none the less I ask him not to move his amendment.
However, I emphasise that we will of course be happy to continue our engagement with the noble Earl and other interested parties, should they wish to discuss these matters further, particularly in relation to Amendment 128YAR, as it may be possible that more can be done through changes to guidance.
Housing and Planning Bill
Debate between Viscount Younger of Leckie and Lord Campbell-Savours
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.
Lord Campbell-Savours (Lab)
My Lords, a particular problem arises which I do not think has been dealt with in the legislation. It is where leaseholders go into arrears and the cost of carrying those leaseholders who are in arrears is borne by the other leaseholders in the block. I wonder whether Ministers might ask civil servants to consider this area because it is an escalating problem, particularly in London where a large number of apartments in blocks of flats are owned by leaseholders who live overseas and often do not fulfil their responsibilities here in the United Kingdom. Even though this problem is not covered in the legislation, maybe officials in the Minister’s department could look at it and come back to us at some future stage.
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.
Property: Shared Ownership
Debate between Viscount Younger of Leckie and Lord Campbell-Savours
Viscount Younger of Leckie
I think the noble Lord will know that the Government’s main aim is to increase the supply of houses across all tenures. We are focusing today on one of many aspects of our policy, which is to ensure that more people, particularly young people, are able to get on to the housing ladder. It is an urgent and important part of what we are doing.
Lord Campbell-Savours (Lab)
My Lords, in the rent-a-room scheme, to which the Minister referred earlier, there is a cap. Is that cap costing the Revenue very much; and if so, how much is it actually costing?
Viscount Younger of Leckie
I do not have a figure for the cost, but the noble Lord might like to be reminded that the income cap for this shared ownership policy has gone up from £60,000 to £80,000 in England, and I am pleased to say that it has gone up to £90,000 in London. That means that we are allowing 175,000 more households to have access to shared ownership.
Housing and Planning Bill
Debate between Viscount Younger of Leckie and Lord Campbell-Savours(8 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Viscount Younger of Leckie (Con)
My Lords, I turn to the detail of the compensation amendments, Amendments 102CK and 103BB, tabled by the noble Lord, Lord Cameron, and the noble Earl, Lord Lytton, but spoken to today by the noble Duke, the Duke of Somerset.
I will outline briefly the principles of compensation for land taken by compulsion. These points have arisen in an earlier amendment in Committee. The compensation code is underpinned by the principle of equivalence. This means that the owner should be paid neither less nor more than his loss. The code provides that land shall be purchased at its open-market value, disregarding the effect of the scheme underlying the compulsory purchase.
The land is valued in a construct called the no-scheme world, whereby any increase or decrease in value that is due to the scheme is disregarded. Land will always have its existing-use value but market value also takes into account the effect of any planning permissions that have already been granted and of the prospect of future planning permissions. This is generally known as hope value, as the noble Duke eloquently pointed out. In the context of compensation for compulsory purchase, this is assessed according to the planning assumptions in the Land Compensation Act 1961, which require the valuer to assume that the scheme underlying the acquisition is cancelled. I remind the House that these were extensively revised and debated in the Localism Act 2011.
In some situations, there will be no hope value, because the individual claimant could not have obtained planning permission for some more valuable use. For instance, the land might be in an isolated rural location where permission for development would have been unlikely to be granted in the absence of a comprehensive scheme requiring compulsory purchase powers. In other situations, perhaps where land is acquired near an existing settlement, there will be pre-existing prospects for development on the land. In lay man’s language, that is development potential that existed prior to the scheme. The strength of those prospects will be reflected in the market value of the land.
On Amendment 102CK, it has been said that land acquired for housing by means of a development consent order should always attract development value. If the land had development potential in the absence of the scheme underlying the development consent order, that hope value would be reflected in the market value and the compensation to be paid. But an increase in the value of the land that is solely attributable to the scheme would be disregarded under the compensation code.
I turn to Amendment 103BB. The noble Lord, Lord Beecham, and the noble Baroness, Lady Andrews, have suggested that there is something unique about the land taken for new towns that requires the Secretary of State to provide a formula for compensation. New towns may well fall into the class of case 1 mentioned earlier, where there is no pre-existing hope value, as there is no reasonable prospect of development in the absence of a comprehensive scheme requiring compulsory purchase powers. In this situation, compensation in the no-scheme world is likely to be at or close to agricultural values. Schedule 1 to the Land Compensation Act 1961 makes it very clear that for new towns any increase in value that is attributable to the development of other land in the new town must be disregarded, where that development would not have been likely to be carried out had the area not been designated as a new town.
I thank the noble Earl, Lord Lytton, for the amendments spoken to by the noble Duke, the Duke of Somerset. I suspect that your Lordships will not be very keen to be further enlightened this afternoon by a technical debate on these particular matters. However, we shall look carefully at what the noble Duke said, and I shall write further to him and the noble Earl before Report about these matters.
Lord Campbell-Savours
The Minister said that he will write to the noble Duke. Can we all see a copy of that letter, and can we have an assurance that there will be no movement, no concession made to the CLA, in this area?
Viscount Younger of Leckie
I am not in a position to make any guarantees this afternoon, but I will certainly include all noble Lords who have taken part in this debate, and copies will be placed in the Library of the House.
I turn to the compulsory purchase policy elements and Amendments 103BC to 103BF. I am very grateful to the noble Lord, Lord Cameron, and the noble Earl for raising these important matters, again spoken to by the noble Duke, the Duke of Somerset. They concern the matter of ensuring that advance payments of compensation are not only paid, but paid on time. This links to the equally important question of the way that acquiring authorities should treat claimants when land is being purchased by compulsion.
Starting with Amendment 103BC, having considered the responses to the spring 2015 consultation, the Government think that penal rates of interest on outstanding advance payments are the most appropriate sanction, and we are providing for this in Clause 174. Taken together with the new arrangements for making claims and obtaining further information in Clauses 172 and 173, we think that the prospect of a penal rate of interest will sufficiently concentrate the minds of acquiring authorities, so that advance payments will be made on time.
I now turn to Amendments 103BD and 103BE. The Government think that setting interest rates in a Bill is too restrictive. Provision to set both rates is available in secondary legislation. Coming to the detail of the amendments, the Government think that it is premature to decide on the punitive rate of interest for late payments of advance payments of compensation—as proposed in new subsection (1A) of new Section 52B in Amendment 103BD. The noble Lord, Lord Cameron, and the noble Earl, Lord Lytton, will know that the Government published our consultation paper on phase 2 of our compulsory purchase reform programme on 21 March. The good news is that the paper proposes that 8% above the base rate should be the punitive rate for late payments of advance payments.
The second part of Amendment 103BD—proposed new subsection (1B)—would overtake the existing provisions in Section 32 of the Land Compensation Act 1961 to set the rate of interest for compensation unpaid at the date of entry. This rate is not punitive, as there are often legitimate reasons for some compensation to be unpaid at that date. The final claim for many businesses, for example, cannot be finalised until their relocation has been completed.
Noble Lords will recall from the spring 2015 consultation that the Government consulted on increasing this rate of interest from 0.5% below the base rate. The Government confirmed in their response to consultation that the rate would be increased to 2% above the base rate. The Committee will be interested to hear that new regulations are in preparation by the Treasury and will be published in due course.
The new rate of 2% above base is intended to achieve an equitable and fair settlement between the claimant and the acquiring authority. The interest on unpaid compensation from the date of entry is not the same as the interest on commercial lending. It may be helpful if I say that it is more likely that it will be based on a formula which will compensate the claimant for interest which he or she would otherwise reasonably be receiving, had the money been otherwise invested. We can have a separate debate on that, I am sure.
I now turn to Amendment 103BF, which focuses on introducing a statutory duty of care to be owed by acquiring authorities to claimants. There is no doubt that claimants should be treated with fairness and courtesy and kept up to date with developments. This is best practice, and all competent professionals should be advising their clients to act in this way. The Government believe that a new statutory duty of care for compulsory purchase is not necessary and would not help relations between acquiring authorities and claimants. The kind of assistance which should be provided by an acquiring authority may differ depending on the circumstances. A broad duty of care may be imprecise in nature and difficult to enforce. The professionals working in compulsory purchase suggest that clear guidance on good practice would be a better way forward.
The recently updated compulsory purchase guidance, published on 29 October 2015, makes it clear that acquiring authorities should make reasonable offers of compensation in the context of overall project costs. Acquiring authorities should also be prepared to engage constructively with claimants about relocation issues and mitigation and accommodation works where relevant. The guidance also urges acquiring authorities to offer those with concerns about a compulsory purchase order full access to alternative dispute resolution techniques, from the planning and preparation stage to agreeing the compensation payable for the acquired properties. With these explanations, I ask the noble Duke to withdraw the amendment.
Housing and Planning Bill
Debate between Viscount Younger of Leckie and Lord Campbell-Savours
Lord Campbell-Savours (Lab)
My Lords, I profoundly disagree with that case. I will refer a little later to my own experience of dealing with these matters.
I understand from the DCLG website that older people now occupy nearly one-third of all houses in the United Kingdom, and nearly two-thirds of the projected increase in the number of households over the next 17 or 18 years will be in households headed by someone over 65. We have an ageing population going into housing all over the country, the vast majority of which is simply not intended for that purpose and has not been adapted. Very often, the people who are moving cannot afford to adapt the housing because they fall within a means-testing system, which sometimes they find embarrassing or sometimes leaves them on the margin and they do not really want to spend the money.
I understand that the Government have introduced a disabled facilities grant, home improvement agencies and FirstStop advice centres. The National Planning Policy Framework asked local authorities to assess housing requirements, including for the elderly. But that is just not enough.
In a case that I was involved in—and I understand it is quite common because I talked to the salesmen from the various lift companies, such as Stannah and Acorn, who visit people’s homes—the issue was the depth of the stairlift. Many stairlifts on the market can be fitted only in homes that have stairs of a certain width. Many homes cannot take British lifts and people buy the German lift because that is a narrower lift going up the stairs. I would have thought that it would be simple for the Government to insist, whether through the Building Regulations or whatever, that when companies are building houses, the stairs are of at least a certain width to enable lifts to be fitted when, inevitably, they will be required in a very large number of homes in the United Kingdom as the population of this country gets older and we reflect on the statistics on the huge increase in households headed by people over 65.
Dealing with the point that the noble Baroness has just made—she has reservations about quotas and so on—I cannot see why we cannot lay down really important standards of that nature so we can get over the problem. That is exactly what the amendment in the name of the noble Baroness, Lady Greengross, deals with. It refers specifically to the requirement to,
“have special regard to the local need for such accommodation”.
There is no reason at all why most houses cannot be built within a spec that is easily adaptable for disabled requirements.
Viscount Younger of Leckie
My Lords, before I respond to the amendments, I will make some introductory remarks to set today’s discussions in context.
This Government want to see new homes and places that communities can be proud of and which stand the test of time. We want to ensure that the appropriate infrastructure is in place when and where it is needed. We also want to see high-quality design creating places, buildings or spaces that work well for everyone, look good and will adapt to the needs of future generations. All sections of society have a role to play.
The Government have a leadership responsibility in setting the overall planning framework. Local government plays a critical role in the delivery of great places, applying the principles of the framework to fit the local context. For example, through the National Planning Policy Framework, we require local planning authorities to plan proactively to meet the local housing needs in the area based on the needs of different groups in the community. Through their local plans, planning authorities set out the vision for the local area, the types of housing they need, and their expectations for the design quality of the built environment, including standards of individual dwellings.
The amendments all tackle very important issues but, as I will explain, it is not necessary to place new requirements on local authorities. Amendment 89LZB, proposed by the noble Baroness, Lady Andrews, places a requirement on local planning authorities that in carrying out their planning functions they ensure the adequate supply of accessible and adaptable dwellings and wheelchair-user dwellings in England. National planning policy sets out clearly the need for local authorities, through their local plan, to plan for the housing needs of all members of the community and that planning should encourage accessibility. We expect them to work closely with key partners and their local communities in deciding what type of housing is needed.
The introduction of optional requirements for accessibility in the building regulations provides local authorities with the tools needed to ensure that new homes are accessible and that, in particular, the needs of older and disabled people are met. Some areas, including London, are already making use of these standards. I believe it is right that decisions on how and where to apply these standards should remain with local authorities.
The noble Baroness, Lady Andrews, raised the issue that there are not enough accessible homes and that councils are not compelled to make provision. She is correct to say that, in viewing the housing stock in England, only a limited number of homes are accessible, but that is not the result of current policy. It is because of the historical failure to plan for accessible housing, which I think the noble Baroness and I agree on. As a Government we are taking up this important challenge, which other Governments have not done.
Building regulations for accessibility were introduced only in 1999, setting minimum standards for step-free access and downstairs lavatories, and to ensure that doors and corridors are accessible. It should therefore be no surprise that the vast majority of existing housing is lacking in some or all those features. But current policy ensures that, at the very least, in new homes these minimum standards for accessibility are met. We have introduced higher levels of accessibility into the building regulations which local authorities can apply in relation to need. In London, a requirement in planning policy is for 90% of homes to meet category 2, which is accessible and adaptable dwellings, and for 10% of homes to be category 3, which is wheelchair-user dwellings. Other planning authorities can and do set different requirements, and my noble friend Lady Scott raised the important point about the flexibility needed in a local area.
Independent research undertaken as part of the Housing Standards Review indicated that 76% of local authorities already have policies for accessible and adaptable housing standards in their local plans. The expectation is that this will continue to improve over time, and the same research indicated that between 2005 and 2014 the number of local plans adopting lifetime home standards had increased from 35% to 60%. We expect this trend to continue and we should allow our current policies to bed in before considering further action.
The noble Baroness, Lady Andrews, asked how many people need accessible housing. I am pleased to tell her that the planning practice guidance which we have published is very informative in this respect. The English housing survey for 2011-12 tells us that around 30%—29.8% to be specific—of households include a person with a long-term illness or disability, and in 2007-08 some 3.3% of all households included one or more wheelchair user. The data in the planning practice guidance provide further sources of census, population, rental, housing and payments statistics which are important to help in the evaluation of specific local needs for accessible homes.
I thank the noble Baroness, Lady Greengross, for her Amendment 89LZC. I agree that it is important that we plan to meet the needs of all members of society. In particular, since this country is expecting the number of people over 65 to reach about 17 million by 2035, it is important that we plan specifically for the needs of older people. This point was well made by the noble Lord, Lord Campbell-Savours. I recognise that many older people do not want or need specialist accommodation or care and may wish to live in general housing that is already suitable, such as bungalows, or in homes that can be adapted to meet any change in their needs. Helping people to remain in their own homes and preventing or delaying the need for acute care can help ensure better outcomes for older people and reduce costs to local services.
We have already put in place a range of mechanisms to support local authorities in planning and delivering specific and diverse types of housing for older people. The care and support specialised housing fund will, over its two phases, fund a total of 221 schemes to develop up to 6,000 affordable homes. Under the affordable homes programme the Government have committed £1.6 billion for 100,000 homes for an affordable or intermediate rent, including 8,000 new homes specifically for vulnerable people, older people and people with disabilities. We also recognise that, at some point, a number of older people will want—or indeed need—to move into supported housing. We must therefore ensure that there are sufficient homes available.
However, I do not think that this amendment is necessary. The National Planning Policy Framework already requires local planning authorities to plan for a mix of housing based on the current and future needs of different groups in the community, including older people. This includes provision of specialist accommodation or dedicated accommodation specifically for older people. Furthermore, the need for specialist accommodation is already a factor that can be taken into account by local planning authorities when considering planning applications for such facilities.
I thank the noble Lord, Lord Beecham, whose Amendment 102 seeks to set a national minimum space standard for new homes. I share his concern about poorly designed housing developments and agree that new homes should be of a high quality—a point I made earlier. However, setting a national regulatory minimum size for all new homes would not be the right way to address the concerns on quality, size and housing need.
Noble Lords will be aware that in March last year the Government published a national space standard for new dwellings that local authorities could choose to adopt in their local planning policies. This was an outcome of the housing standards review, which looked at a wide range of standards applied to new housing and introduced a simplified and defined framework that removed overlap, contradictions and duplication.
Housing need and viability differ across the country. We need to ensure the widest range of options for as broad a market of buyers as we can. We must cater for a range of incomes and different dwelling sizes. Local authorities are best placed to understand and decide how to meet these varying local housing needs and we expect them—with the input of local communities—to put in place local plan policies that will bring forward new homes of a size that meet local needs. But they must also ensure that development remains viable and affordable for a range of home buyers.
We continue to support the adoption of space standards through planning policy where needed and where appropriate. It provides a flexible way to address concerns about the size of new homes, whereas a requirement through the building regulations will limit viability and rule out a flexible approach to meet local circumstances. With this explanation I hope that the noble Baroness will agree to withdraw her amendment.
Housing and Planning Bill
Debate between Viscount Younger of Leckie and Lord Campbell-Savours
Viscount Younger of Leckie
My Lords, Amendment 84, tabled by the noble Lords, Lord Kennedy and Lord Beecham, would make a change to Clause 117 so that a local housing authority could impose a civil penalty in addition to, rather than as an alternative to, prosecuting a landlord. The Bill as drafted provides local housing authorities with a choice on whether they want to go down the civil penalty route or the prosecution route, depending on the seriousness of the offence. We have looked at this carefully and come to the conclusion that it would be disproportionate to use both regimes in relation to the same conduct.
Local authorities will benefit from other measures proposed in the Bill. For instance, they can apply for a rent repayment order where the rent has been paid from housing benefit or universal credit where certain housing offences have been committed, as set out in Part 2 of the Bill. This is in addition to the powers already available through the Housing Act 2004 whereby magistrates can impose unlimited fines on conviction for the most serious housing offences. I hope that after this brief explanation the noble Lord will agree to withdraw the amendment.
Lord Campbell-Savours (Lab)
The Minister referred to reasonable fines. What scale of fines are we talking about here?
Viscount Younger of Leckie
I do not have details of the fines, but I shall be more than happy to write to the noble Lord with them.
Viscount Younger of Leckie
I was answering the points raised by noble Lords, and the main point is that we think it disproportionate to use both regimes. I hope that that answers the noble Baroness’s question. I am now able to answer the question asked by the noble Lord, Lord Campbell-Savours, about fines. The answer is: up to £30,000.
Lord Campbell-Savours
The Minister says that it is up to £30,000. There has been an interesting series of programmes recently, I think on BBC on weekday mornings, in which a team has been going out and looking at properties, particularly in east London, where invariably ethnic minority landlords are exploiting illegal entrants to the United Kingdom, or indeed other people from within the ethnic minority. I have made a point of watching some of these programmes and have begun to realise that these landlords are dancing round local authority officials. The local authority officials seem almost unwilling to exercise real responsibility to bring these people to court. When we talk about up to £30,000, we may end up with little fines of a few hundred pounds for what appear to me to be major offences. Huge breaches are going on in London in properties that come under Sections 64 to 67 of the 2004 Act.
The law seems quite clear. You would imagine that the law would work, but the reality is that it is not working. These people are not being pursued. My noble friend used the phrase “in addition” and I think that it is important that those words are introduced. These rogue landlords need to know that they will not only be taken to court—where they can hire smart-backsided lawyers who can manage to get the fines reduced to whatever level they think is acceptable by simply acting in the interests of their clients—but will be pursued by the authorities, which, I understand, have the right to use that money to do up the property.
The Government are taking a very weak-handed view in dealing with this matter. HMO properties in London are at the bottom end of the market in terms of the treatment of tenants by landlords. The law needs to be tightened up in this area. I hope that when we get to Report we can table amendments that everyone will support to bring home the lesson to the Government that this area is not being dealt with in a good enough way.
Viscount Younger of Leckie
I wanted to expand on my previous answer to say that prosecution fines are unlimited civil penalties of, as I mentioned, up to a figure of £30,000. It may give the noble Lord some reassurance to say that we have the power to provide guidance to local authorities on what to use and when in terms of fines. We intend to consult local authorities on the guidance on this matter.
Lord Campbell-Savours
Perhaps I can pursue this a little further. How many people have actually been charged, nationally and in London, over the last 12 months, say? Does the brief tell us the number of people who have been through the courts or do the lawyers manage somehow to deflect the legal actions? If the Minister does not have the reply, perhaps he can indicate to the Box that the information might be made available to us during discussion of a subsequent amendment.
Lord Campbell-Savours
Is there not great irony in the fact that, to get around this problem, we need more bedrooms? In London, the flats with the most bedrooms—the three-bedroom flats—are the very high-value flats that are going to be sold off under this Bill. It shows what a mockery this Bill makes of housing problems.
Viscount Younger of Leckie
My Lords, I thank my noble friend Lady Gardner of Parkes for her amendments, which seek to address overcrowding and unlawful subletting in flats in residential blocks. For reasons that I shall come to shortly, however, I do not think that they are necessary, since both local authorities and managers of residential blocks have sufficient powers to tackle overcrowding and associated problems. The noble Earl, Lord Lytton, and my noble friend Lord Swinfen, alluded to this. I will explain further.
I will respond first to Amendment 84A. Part X of the Housing Act 1985 already deals with statutory overcrowding, which it defines by reference to a room standard and a space standard. If either of these is contravened, an occupier or landlord may be guilty of an offence. Statutory overcrowding results if two or more people of the opposite sex aged over 10—I have a figure of 10, not 12—and not being part of a couple have to share a room. This is defined as the room standard. Statutory overcrowding also results if the permitted number of persons who can sleep in a dwelling is exceeded. This is the space standard, which is calculated by reference to the number of rooms available as sleeping accommodation and their floor-spaces.
Local housing authorities can use their existing powers to gain entry to a dwelling in order to measure rooms to work out the permitted number. They also have powers to require information about the number of people sleeping in a dwelling and to inspect, report and prepare proposals on overcrowding generally in all or part of a district.
On the point made by the noble Lord, Lord Campbell-Savours, where a local authority considers that a property is overcrowded to the extent that it is hazardous to the health and safety of the occupiers, it may—and must, in the case of a category 1 hazard—serve a prohibition order under Part 1 of the Housing Act 2004 on the dwelling. This prohibits the use of all or part of a dwelling for residential purposes, limiting the number of persons who can occupy it. Whether the overcrowding is actionable will be determined by applying the housing health and safety rating system, which provides a numerical score of the severity of the potential hazard. Those scoring highest are category 1 hazards, and the authority is required to take action. Hazards with lower scores are category 2 hazards and the authority may take action. In any case, if the local authority serves a prohibition order limiting the number of persons who can occupy a dwelling, it is a criminal offence to contravene the order by permitting more persons than specified in the order to occupy it. A local authority can recover from the landlord its expenses in preparing and serving a prohibition notice.
On the interesting point raised by the noble Earl, Lord Lytton, about how one would find out about such overcrowding, it is subject to intelligence from local residents and the immediate area. It is fair to say that it works; no doubt on occasions it is hit and miss, but that is where we stand at the moment.
In deciding whether a dwelling is overcrowded, a local authority must apply an objective test and not its own perceptions or those of others. My noble friend’s amendment would enable local authorities to set standards in individual cases in addition to the national standards and existing hazard rating systems. This would cause confusion and uncertainty.
While I appreciate that flats that appear to be overcrowded can cause problems for other residents of the block, local authorities and managers of the blocks have powers to address them. For example, a local authority can serve a noise abatement notice if noise is coming from a flat, and the landlord or manager of the block can take action against the long leaseholder for such a nuisance if there is a condition or covenant relating to it in the lease. I am pleased to report that Kensington and Chelsea, where, I understand, my noble friend Lady Gardner is a leaseholder, was this year awarded £91,000 from a £5.3 million fund to tackle rogue landlords. This funding will work alongside the measures in Parts 2 and 5 of this Bill to ensure that local authorities have the resources and incentives to tackle rogue landlords.
Lord Campbell-Savours
Can the Minister put it on record that, when people buy their leases and turn them into a share of the freehold, they have the opportunity at that point to redraft the lease documents? That is the point at which they could input the restrictions required to cover many of the issues raised by the noble Baroness, Lady Parkes.
Viscount Younger of Leckie
I note the noble Lord’s point but point out that the lease is a matter between the leaseholder and the landlord.
I hope, however, that my responses have reassured my noble friend that landlords of residential blocks and local authorities can take action to tackle overcrowding and problems associated with flats. With these assurances, I ask my noble friend to withdraw her amendment.
Lord Campbell-Savours
Going by my own experience, if a statutory requirement was placed on the management company to forward correspondence requesting that information to the people who own the leases, particularly if they were abroad—in other words, if the responsibility was on the management company—following a request from the residents association, we would indeed get the names.
Viscount Younger of Leckie
That is a possibility, and I will bring that into the considerations that we will undertake prior to Report. I thank the noble Lord for his point. I hope that my noble friend will agree to withdraw his amendment and the noble Lord, Lord Berkeley, will not press his later.
Housing and Planning Bill
Debate between Viscount Younger of Leckie and Lord Campbell-Savours
Lord Campbell-Savours
Despite the provision that the Minister has referred to, unless you secure the agreement of everyone involved, people often go into arrears and default. That creates problems within an association.
Viscount Younger of Leckie
That is true, but there are restrictions in place to allow for that. It still works.
Viscount Younger of Leckie
It is fair to say that we continue to work hard to press Network Rail to pick up that specific point. I believe that we have made more progress than ever before in addressing those issues. It is important that we look at all areas of land that are not being used, and that is exactly what this planning process aims to do.
I shall now, if I may, make some progress and turn to Amendment 89L and compulsory acquisition. The noble Lord, Lord Campbell-Savours, has argued—and I accept his passion on this subject—that the imperative for house building is so great that land acquired for that purpose should be acquired as cheaply as possible. There is no doubt that more houses should be built, and that cheap land would help towards that end: he makes a very fair point.
The need for housing is not, however, the only imperative in play when land is acquired by compulsion. The acquiring authority is acting in the public interest, but in return the claimants, whose land and property is being taken from them, must be treated fairly. It may help the Committee if I briefly outline the principles of compensation for land taken by compulsion.
The compensation code is underpinned by the principle of equivalence. This means that the owner should be paid neither less nor more than his loss. The code provides that land shall be purchased at its open market value, disregarding the effect of the scheme underlying the compulsory purchase. The land is valued in a construct called the “no-scheme world”, whereby any increase or decrease in value which is due to the scheme is disregarded. Land will always have its existing use value, but market value also takes into account the effect of any planning permissions that have already been granted, and also the prospect of future planning permissions. This is generally known, as I am sure the noble Lord will know, as “hope value”. In the context of compensation for compulsory purchase, all this is assessed according to the planning assumptions in the Land Compensation Act 1961, which require the valuer to assume the scheme underlying the acquisition is cancelled. Your Lordships’ House may recall that these were reformed in the Localism Act 2011.
In some situations there will be no hope value, because the individual claimant could not have obtained planning permission for some more valuable use. For example, the land might be in an isolated rural location where permission for development would have been unlikely to be granted in the absence of a comprehensive scheme requiring compulsory purchase powers. In other situations, perhaps where land is acquired near an existing settlement, there will be pre-existing prospects for development on the land—in other words, development potential which existed prior to the scheme—and the strength of those prospects will be reflected in the market value of the land.
Lord Campbell-Savours
Why should hope value be transformed into reality on the basis of a planner’s pen? The planner decides, “I recommend to my local authority that that land should be used for housing”, and in an instant transforms the value of that land from £20,000 a hectare to maybe £5 million a hectare. Why? How can we possibly justify that?
Viscount Younger of Leckie
I think that I explained that earlier, by saying that we needed to look at both sides, and to use the principle of fairness. The fact of the matter is that unless we intervene and there is a status approach, the value of land is what it is. I believe that the existing regulations are fair. Land will always have its existing value, but the hope value needs to be taken account of as well.
As I said, in some situations there will be no hope value, because the individual claimant could not have obtained planning permission for some more valuable use. For instance, the land might be in an isolated rural location where permission for development would have been unlikely to be granted. Therefore, compensation under the code is paid at the open market value of the land in the “no-scheme world”. This provides a fair level of compensation. I hope that these explanations have reassured noble Lords. I have spent a bit of time expanding on the arguments raised, particularly by the noble Lord, Lord Campbell-Savours, and I hope that noble Lords will feel able not to press their amendments.