Localism Bill

Baroness Hollis of Heigham Excerpts

Wednesday 7th September 2011 Lords Chamber

Moved by

[Baroness Hollis of Heigham]

47: After Clause 158, insert the following new Clause—
“Social housing rents
Landlords of social housing may levy a rent above the target rent for that dwelling to fund the capital cost of additional facilities requested by the tenant.”

[Baroness Hollis of Heigham]

My Lords, this is a relatively small amendment but I think that it may have wider repercussions. First, I declare an interest as chair of Broadland Housing Association. It is a medium-sized, traditional-build housing association—not a stock transfer—which seeks to meet housing need in Norfolk and north Suffolk. Every one of our homes is of decency standard and properly insulated, and we are effectively at target rent levels.

Last year, a dozen or so middle-aged and older tenants in a small close of bungalows in sunny Norfolk asked us to install solar panels at a cost of some £3,000 to £4,000 a property. We did so and I understand that the tenants’ fuel bills have fallen considerably. However, the cost of those solar panels has effectively fallen on other tenants, either in increased rents if they are below the target rents or in opportunities forgone—for example, in environmental works.

There is now a queue for work such as the installation of solar panels, which is understandable, but as a housing association we cannot afford it for all who wish it. We know that hundreds of thousands of tenants throughout the country are in fuel poverty. They may be elderly or disabled or they may be lone parents with large families, and they want and need to reduce their fuel bills. We, as a country, are investing in grants for loft and cavity wall insulation to cut fuel poverty and reduce energy consumption. Nearly half of all carbon emissions come from buildings. As a housing association we have done all that. However, many tenants now want us to go further with, for example, solar panels, but we cannot afford to help them as we would wish, and of course they cannot afford the capital cost of doing the work themselves under the feed-in tariff proposals, amounting to some £3,000 to £8,000 a household. The Green Deal is proposed for next year, but housing associations do not yet know how it will apply to them, if at all, and they doubt that it will.

We would like to suggest co-payment. If, say, the fuel saving from installation of a solar panel was £10 a week, the rent could rise by £5 a week above the target rent to contribute to the capital cost of the loan of that money. The tenant would keep as a bonus the other £5. Why can we not do that now? Very simply, we are at the target rent for properties, which takes no account whatever of energy efficiency. That is foolish. The Minister in her letter in August—for which I thank her—explained that she could not support the amendment. She said, first, that it would lead to increased rents, which was unacceptable, and, secondly, that this could lead to unacceptable rises in housing benefit. I challenge both those points.

The concept of the target rent that the Minister said cannot be exceeded has of course been exceeded by Government with the introduction of 80 per cent market; that is, affordable rents. In future, with two identical houses, side by side and currently up for re-letting, one will go for a rent of £90 as it is social housing, the other will go for a rent of £120 because it is at the new 80 per cent of market value. That increase is simply because we have relabelled the description of tenure over the lintel of that house.

Why does it make sense to have increased rent properties because we have renamed the tenure, adding nothing of value at all to the property, but not be able to increase the rents when we have markedly improved the property by reducing fuel costs? Why have we got to choose either a rent of £90 that equals social housing or one of £120 that equals 80 per cent of market value intermediate rents when it would make sense to have a rent of £95 because of investment in energy efficiency? Raising rents above the target, despite the Minister’s letter, involves no new principles because government is doing that already.

But, says the Minister in her letter of August, it might come out of housing benefit. The Minister says that such increases are not affordable and that the taxpayer would not obtain value for money from this increased public expenditure. There are two points on that. First, her new 80 per cent of market rents will largely be financed by housing benefit. Virtually every tenant going to our housing association is on HB. Whatever the tenure label—social housing or intermediate rent—it will largely be met by HB if our housing association is anything to go by. Indeed, it is calculated that to fund Mr Pickles’s building programme through 80 per cent market rents at the DCLG will add £2 billion to the housing benefit bill of the DWP. The DWP is paying for the building programme of the DCLG, which reflects no added value and cannot be used to fund improved facilities, as we would all wish.

The Minister then went on to say that such investment may not represent value for money for the taxpayer, at a time when the same Government are urging energy companies and individuals to take up government grants to increase loft and cavity wall insulation, replace boilers or install wind turbines—which are, as is solar power, renewable. If a part of Government is urging all of us because it thinks it prudent to invest in energy reduction, why does the DCLG oppose it? Indeed, why is the DCLG not positively encouraging us to do what we wish and get housing associations to work with tenants to consider energy renewables such as solar panels? As I say, that will reduce fuel poverty and carbon emissions—both goals we all want. Therefore, I think that the Minister’s letter in August, in reply to the original tabling of this amendment in Committee, is entirely invalid.

I would like to make a proposal to the Government. If increased HB would be the obstacle, because the increased rent would be met by housing benefit—

[Earl Ferrers]

The noble Baroness is making a very interesting speech, but she will talk in acronyms. She talks about HBs, DCLGs and so on, and some of the more modest of us are not quite certain what she is talking about.

[Baroness Hollis of Heigham]

I apologise to the noble Earl. As I am so anxious to persuade him to agree with me, I will happily take extra time in spelling out the acronyms.

If indeed housing benefit is the issue—because an increase in rent of £5 would be covered by housing benefit—I put it to the Government that any increase in rent above the target rent for such purposes should not be covered by housing benefit, quite simply. That way the housing benefit bill to the Government would be protected and the tenant could choose whether to proceed with solar panels by way of co-payment. If the tenant did so choose, the tenant would enjoy reduced fuel bills and contribute to lower energy consumption in this country. The choice would be with the tenant, there would be no additional cost to the Government, but the reduction in conventional energy and the substitution of green renewable energy would be a gain to us all. I beg to move.

[Lord Kennedy of Southwark]

My Lords, the amendment proposed by my noble friend Lady Hollis is most interesting and has considerable merit. She has considerable experience in the local government and social housing sectors. Where tenants want to make major improvements or improve other amenities, I can see the case for this being financed by an increase in the rent paid on the property. My noble friend makes compelling points in particular regarding fuel poverty and green energy and also dealing with the issue of housing benefit. If the Government are not able to accept the amendment, will the noble Lord at least agree to take it away and reflect on it? It could be explored further and perhaps introduced at another time following discussion with relevant departments.

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[Baroness Hollis of Heigham]

My Lords, I regret that the noble Lord, Lord Shutt, did not actually listen to the arguments I sought to make. He has repeated the two points made by the noble Baroness, Lady Hanham, in her helpful letter in August, which I sought to rebut in my speech and on which the noble Lord, Lord Shutt, has not commented. It was as if the speech had not been made and that the arguments of August were still the only arguments in town.

I remind the noble Lord that I was not arguing for complete freedom for landlords, as he suggested. It was made very clear that this would be at the initiation of the tenant. The reason I used the solar panels example was because it had such obvious spill-over benefits for the tenant, fuel poverty, energy consumption, renewables and the reduction of carbon emissions, so we would all gain. I used the example, too, because it is consistent with the drive by this Government in the Department of Energy for the further extension of insulation and the use of renewables. So it is entirely consistent with government policy, though in a different department, and it would be initiated by the tenant and would therefore not give complete freedom to the landlord.

Secondly, the noble Lord argued, as was argued by the Minister’s letter, that it would lead to an unacceptable rise in housing benefit. I hoped that I had made it clear that if the Minister so wished it could all be outside and above the rent covered by housing benefit. I am well aware of the role of housing benefit—I made that point explicitly—but the Minister has not replied to that offer as a way forward that would address the issue, which I understand, of housing benefit, but would equally allow us to respond to a perfectly proper and appropriate request by tenants to be able to reduce their fuel bills at no cost to the Government. That is what I sought. The noble Lord, Lord Shutt, has not answered that point at all.

Given that there is clearly no meeting of minds, because people are not listening to each other’s arguments, I wish to take up the suggestion made by the noble Baroness, Lady Hanham, for a further discussion about this matter. I assure her that surveyors across the country are very interested in trying to proceed with such policies as a way of producing the nearest that we can get to things such as passive housing, and so on, which we need to see in this country. I beg leave to withdraw the amendment.

Amendment 47 withdrawn.

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[Lord Tope]

Whereas the noble Baroness began by saying that she had been neither an MP nor a councillor, I begin by saying that I have been both. I was an MP for a rather short tenure a very long time ago but have been a councillor for the past 37 years, representing a ward with a substantial amount of social housing. Therefore, I have real and practical experience of some of the issues that have been spoken of. The noble Baroness will know well that I have considerable sympathy with much of what she has said. Indeed, my noble friend Lord Shipley and I have our names to Amendments 70 and 73 in this group. As I say, I have great sympathy with what the noble Baroness has said. My preference would certainly be to have unfettered direct access to the Housing Ombudsman. I feel strongly that tenants should have the right of direct access to the Housing Ombudsman when necessary, and I wish to spend a few moments considering when that is necessary.

It is for the Minister, and certainly not for me, to explain the Government’s reasons for the proposals in the Bill and for wanting to tackle the matter in this way. However, we have to recognise that, certainly in the 37 years that I have been a councillor, the involvement of local authorities, and therefore of councillors, in housing management issues has decreased. We have had the wholesale stock transfer and the creation of ALMOs. Generally, the move has been away from involvement. It is fair to say that some councillors—I cannot say that this has been my experience—have much less engagement in the day-to-day business of housing management, and therefore of knowing and understanding the issues that their constituents, as tenants, experience. If the Government wish to bring politicians, particularly councillors, closer to these issues—I do not know what the relevant phrase is—that is an objective we all share. We might have varying degrees of cynicism about how effective that will be, but it is an objective that we all share. I certainly share the Government’s objective in that regard.

If the Government’s objective is also to ensure that, whenever possible, complaints and issues are resolved locally, I am sure that we all share that objective too. That is clearly desirable for all sorts of reasons. It is usually quicker, more effective and engages people. I would expect that, in most instances when a tenant has a complaint of this sort, normally the first port of call would be a councillor or MP, partly because they are better known—or at least their existence is better known—than the Housing Ombudsman and they are more accessible and accountable. Therefore, I would normally expect an issue to be raised first with a councillor or Member of Parliament. I would expect that, in pretty well every case, that representative would try to get the matter resolved locally as that is what councillors and MPs do. Instead of immediately going off to the ombudsman, they go to the relevant housing management authority to try to resolve the issue and then tell their constituent what a wonderful job they have done in resolving the problem. That is what happens in reality. When they are successful, that is good, right and proper.

The difficulty that I have with the Government’s proposal is that, while I am sure that we all share those objectives, one of the—I hope unintended—consequences is that it will give councillors, Members of Parliament and tenants panels a right of veto. I have to say that that is wrong. I do not think that it is our job as councillors, Members of Parliament and so on to be the final adjudicator of the rightness or wrongness of the complaint. I would expect that in practice most Members of Parliament and most councillors would anyway refer something to the ombudsman—whether the Local Government Ombudsman or Housing Ombudsman. That was always my practice whether I thought the complaint was wholly justified or even unjustified. I felt that the complainant had the right to independent arbitration and to go to an ombudsman, and referred it that way.

I have had the opportunity to discuss this at some length with the Housing Minister, who says that as an MP that was what he always did. The reality, which I know from personal experience, is that some elected representatives, for whatever reason—and sometimes for no good reason other than personal idiosyncrasy—refuse to do that. That is wrong. I do not think that a Member of Parliament or a councillor should have the right to deny the tenant access to the ombudsman to have the complaint, whether justified or not in our view, properly investigated and independently decided upon.

A little later this afternoon we will get to Amendment 73A and those with it. Amendment 73A is a compromise to try to help the Government, which is always our objective on these Benches. Amendment 73A says that, if the designated person will not refer the complaint—we should have included the words, “or fails to do so within 30 days”, or some other given period—the tenant has the right to go direct to the ombudsman. That amendment has been decoupled from this group for reasons that I understand, but I hope that when the Minister replies she can give us clear and strong words of comfort that it is not the Government’s intention to give the right of veto to us councillors to decide whether or not a complaint is worth forwarding. We need to ensure that the tenant may do so when necessary—I come back to those important words—if a designated person who is willing to forward the complaint cannot be found. That is a pragmatic and sensible compromise to find a way through the entirely honourable and proper intentions of the Government, which we would probably all support, and the undesirable effects of the way in which they are trying to do it. I hope that the Minister can give us clear comfort on that. If she is able to do so, we will judge what to do with Amendment 73A when the time comes.

[Baroness Hollis of Heigham]

My Lords, like the Minister I, too, have been a housing chair in a local authority, for some 11 years. I am also chair of a housing association—an interest that I have declared—and regularly sit at stage 4 of precisely these complaints panels that are the subject of discussion. I am sure that the Minister knows but I wonder whether your Lordships realise how thorough the complaints procedure is, and rightly so, within housing associations and local authorities, particularly encouraged by the TCA of the Homes and Community Agency.

At stage 1, the tenant’s complaint—often, it is a complaint against the behaviour of a neighbour of some sort—is investigated by the local senior housing manager. If that is not resolved to the satisfaction of the tenant, stage 2 means that it will go to the housing manager at the top of the organisation, who will then seek to get all the information, build the file and see whether some resolution can be arrived at. If that is not satisfactory, there is a stage 3 where the complaint goes to the chief legal officer, who is usually the deputy chief executive of the housing association, who goes through the file, takes the evidence, makes further notes and attempts again a further resolution of the difficulty. If that is not enough—by this stage, most complaints have been reasonably addressed—the matter goes to stage 4, which involves the panel, chaired by someone like me, alongside the tenant board representatives of the housing association and the senior staff. Five or six of us spend perhaps a couple of hours going through a thick file and seeking as best we can to hear and resolve the tenant's complaints and concerns.

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[Lord Greaves]

My Lords, this is the first time that I have spoken on Report so I should declare a few interests. I am an elected member of a district council in Lancashire, a vice-president of the LGA, a vice-president of the Open Spaces Society and a member of the access, conservation and environment group of the British Mountaineering Council. Those are the interests I can think of that might come up during Report. If I have any others, I shall declare them later.

I apologise for having to nip out of the Chamber for the latter part of the speech by the noble Baroness, Lady Hayter, and the beginning of the speech by my noble friend Lord Tope. I can assure everyone that I probably agree with every word that they said, even when I was not here, on the basis of what they have said otherwise. We had a glowing account from the noble Baroness, Lady Hollis, about how wonderful the complaints and resolution system is in her housing association.

[Baroness Hollis of Heigham]

My Lords, I was not trying to say that. I was trying to say that, having gone through such an exhaustive system, I could not see what added value would come by having a fifth tier, an MP or a councillor, as opposed to going direct to the ombudsman.

[Lord Greaves]

I entirely accept that. However, in my experience, not all housing associations are the same and some do this better than others, which is inevitable with any type of organisation. In a sense, if there are housing associations or social landlords that do not do it quite as well as the organisation in which the noble Baroness, Lady Hollis, is involved, that is an even more important reason why tenants should be able to go to the housing ombudsman as easily and quickly as possible.

Like my noble friend, we on these Benches would have preferred that this proposal from the Government was not in this Bill. It seems to go back to a local government ombudsman system that, as noble Lords have said, used to exist in local government but that, frankly, was not necessary and in some cases was harmful. There is no doubt whatever that on some occasions councillors used to find reasons not to pass complaints on or tried to persuade people not to pursue them. I always took the view that unless it was clearly vexatious I would automatically pass it on, even on one occasion when it concerned a complaint against the borough council about a housing matter in which I had been closely involved. I was chairman of the housing committee and I still said, “I will pass it on because it is right and proper that it gets dealt with”.

At Lancashire County Council, on one occasion I made a complaint against the education authority. Shortly after, I went to a reception of important people at county hall in Preston. As soon as I walked in the room, the then education officer came bounding across the room and at the top of his voice tore a strip off me for daring to question the reputation and organisation of that education authority. He then marched back to the other side of the room. I was much younger and a bit more timid than I am now but I still marched after him and, in an equally loud voice, tore a strip off him and told him that he was undermining democracy. In a sense, I should not have had to be there as part of that system. The people involved should have been able to go direct.

Along with other noble Lords, I think, around the Chamber, we have had quite a few discussions with members of the Government, particularly with Grant Shapps, who I believe is in charge of the housing parts of this Bill. We came to the view that we might win the argument but would not win the process of this legislation of removing these parts of the Bill or of putting in an amendment along the lines of that proposed by the noble Lord, Lord Whitty, which I would otherwise strongly support.

To help the Government, in these discussions we are looking for some compromise that at the very least provides a backstop so that, if any of these designated persons are not helpful and try to resist or are just incompetent in passing on a complaint, the tenant can nevertheless go direct to the housing ombudsman. It is a slightly messy process and it is not as good as now, but it can work and at the very least would maintain their right to go direct to make the complaint, even if someone else tries to persuade them otherwise or to block it.