Homelessness Reduction Bill (Seventh sitting)

David Burrowes Excerpts

Committee Debate: 7th sitting: House of Commons
Wednesday 18th January 2017 Public Bill Committees

[Mr Jones]

My hon. Friend hits the nail on the head. There is obviously an incredible amount of good will in relation to increasing the period over which people are supported and trying to mitigate the challenges they encounter before they become homeless, but some concern has been expressed about the approach. Landlords are worried that the flexibility could be misused by some local housing authorities to delay triggering their obligation to help tenants, which could result in increased costs for landlords in having to go through the courts to evict tenants and cause extra distress to vulnerable at-risk households. In general, landlords and local authorities were concerned that the clause as drafted was too complicated and could be misinterpreted or even misused.

My hon. Friend the Member for Harrow East and I have met a range of stakeholders to agree an approach that best addresses everyone’s concerns while keeping at its core our overall aim of helping people to solve their housing issues before they become homeless. I thank all of them for their constructive engagement and for helping us to reach the approach that the Government are proposing. Local authorities and the housing charities have confirmed that they support the amendment.

The prevention duty provides that local authorities must work quickly and proactively with applicants who are threatened with homelessness to find a long-term housing solution during that period. The amendment adds to that by making it clear that any applicant with a valid section 21 notice that expires in 56 days or less is to be treated as threatened with homelessness and therefore offered the relevant help and support. Where applicants in those circumstances seek help, local housing authorities will be required to work with them to try to prevent them from becoming homeless before the notice expires. That should help to reduce evictions from privately rented accommodation and facilitate less disruptive moves to alternative housing when tenants do have to move out. It has been mentioned many times that once a family have paid a deposit bond to a landlord, if they are subsequently evicted quite often the biggest challenge is that do not have that bond to get back into the rental market.

[Mr David Burrowes (Enfield, Southgate) (Con)]

On support from local authorities, how much engagement, involvement and sign-up from local authorities is there for the amended clause 1? I know that my hon. Friend has had discussions, and there will obviously be further debate about the costs. I think that some local authorities have been under a particular impression in terms of the somewhere-to-stay provision and using a cost element that is not focused on what is in the Bill now, although it will be if we pass the amended clause.

[Mr Jones]

There have been infinite discussions about this clause and the others. I think that, generally, the clause has been accepted readily by most people involved, particularly on the local authority side and by the Local Government Association. Generally that is because people recognise that if we gear our help to being upstream, rather than waiting for a housing crisis, that will significantly reduce the cost of helping people, but more important than the cost, it will put people in a far better position as individuals than would have been the case otherwise.

The end of a private rented sector tenancy is currently the main trigger for homelessness, so the Government commend the amendment as a way to ensure that valuable opportunities to prevent homelessness are not lost and that households are more likely to receive the help that they need at the right time. The amendment balances the need for flexibility for local housing authorities with recognition of the legitimate concerns of landlords and homelessness charities. Clear guidance will be issued to set out in more detail how that flexibility should be used.

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[Mr Burrowes]

On the methodology, obviously it is important that there is as much agreement as possible on the basis for the Government’s welcome funding commitment for the implications of the Bill. Certainly one cannot predict how much demand there will be for prevention services, but has as much agreement been reached as is possible with local councils and the LGA in relation to the methodology testing that has taken place up until now?

[Mr Jones]

There has been extensive discussion on that, and from the LGA’s press statement it is apparent that it does not dispute the methodology used. It has talked about reviews—we can come on to that—but it has not disputed the methodology. On the methodology, we must be careful to ensure that we are comparing the potential cost with the burdens created under the Bill. On Second Reading, the hon. Member for Ilford South (Mike Gapes) spoke at considerable length about what he saw as a multimillion pound commitment that his local authority would have to meet as a result of the Bill. That included concern over the original proposal for a “nowhere safe to stay” clause, which after speaking to local government the Government considered carefully. Although in an ideal world it would be fabulous to do what that proposal intended, it would have created a huge new burden that would have been difficult to deal with. More particularly, the big challenge around that was that that new burden’s demand could not be quantified. In many of the assumptions we have made in preparing the Bill, we have been able to use methodology relating to the experience of the Welsh legislation, and that legislation did not have provision for nowhere safe to stay.

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[Andy Slaughter]

The Minister is getting ahead of me. I am dealing simply with quantum now. I will come on to the methodology next and the savings as a third point.

There is an estimated gap of nearly £200 million by the end of the decade in local authorities’ current homelessness provision. If one looks at the fact that London boroughs spent £633 million in the last year for which figures were available—2014-15—on temporary accommodation, including £170 million of their own funds, and the fact that they are already subject to substantial reductions in funding, I am not surprised that they are very concerned about that. That is purely on the issue of quantum.

On the issue of methodology, I am not sure how far it takes us. Although something is better than nothing, I found it a slightly odd way of presenting the background information. I would like to see a full impact assessment. I appreciate that we may need to wait until we know exactly what the Bill is going to do. There may need to be a review of provision—the methodology concedes that—but once we know how the sum is going to be broken down, I would like to know exactly how the Government can justify their claim that this will be new burdens funding and that it will be fully funded.

On the issue of savings, of course we all hope for savings, not only cash savings but savings in human misery, bureaucracy and unnecessary action. I am, however, less sanguine than the Minister about the fact that that will all be resolved in one to two years. In part I say that because much of what the Bill will do is to encourage what we have often heard called a culture, a culture of local authorities doing more by way of prevention. Yet in a lot of the busiest authorities, prevention work is done—in 80% of cases in Camden, for example—so quite a lot is going on, and I am not persuaded that we will see an immediate culture change, or that that culture change will produce savings.

Savings are likely to come by averting homelessness for priority need cases, because that is where the substantial burden of cost comes. At the moment part of the point of the Bill is that a lot of local authorities are not taking their responsibilities seriously in relation to non-priority need cases. Thereby, if we simply see an increased focus on those cases on which there is not current expenditure, or people being turned away, I do not quite see where the savings are coming from or where the supposition comes that within two years there will be nil cost to local government. To be perfectly honest, I just do not believe it.

We could sit here all afternoon saying, “We think it is”, or, “We think it isn’t”, but surely the sensible course is to have an early review to see whether the LGA’s caution or the Minister’s option is justified.

[Mr Burrowes]

I want to encourage an optimistic view, perhaps even a realistic one. The Welsh choice led to that 69% decrease in the first year. I understand that the assumption in the figures we are discussing is for a 30% decrease in homelessness, but is that not seeking simply to follow the Welsh model, which is a great success? The shadow Minister, however, says that there will be hardly any reduction or savings. He cannot say that. What is his concern with 30%? Is 30% too optimistic? Where would he say there will be reduction?

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[Michael Tomlinson]

I begin by picking up on one or two points from the hon. Member for Hammersmith. On a positive, optimistic note, let me start by saying what I agree with in his analysis of clause 1. He mentioned several other forms of tenancies, such as less secure tenancies; perhaps he could also have mentioned licences or those that are subject to a notice to quit rather than the more strict section 21 notice or court procedure. I agree with his analysis on that point. There are a wide range of tenancies that could have been encompassed within the clause but are not. I suspect that his analysis is right: that that is because of the sheer difficulty of juggling all the different potential tenancies. Look at the different Acts that we have to deal with, and that he had to deal with when in practice: the 1980, 1985, 1988 and 1996 Acts, all with varying levels and layers of interplay. I suspect that is why we find clause 1 drafted as it is.

I agree, to that extent, that as drafted and certainly as amended, the clause does not encompass a wide range of different forms of tenancy, especially those less secure. I will come back to section 8 and its interplay with section 21. However, I take issue with the hon. Gentleman and other Opposition Members on criticising and being too antagonistic towards no-fault notices and that regime. I agree that it is desirable to have as long-form tenancies as possible and I was heartened by the Minister’s submission that confirmed that the average tenancy is four years. The Minister is nodding, so I heard that correctly.

Of course, that is not the whole picture but four years is a significant period. My concern, if no-fault tenancies are simply swept aside or undermined, is that landlords and potential landlords will be put off purchasing and letting out properties, so we would be in a worse position. That is a concern that the hon. Member for Hammersmith and his colleagues should look out for if they seek to undermine no-fault tenancies and those who are, on the whole, perfectly good, decent landlords, as we heard this morning. I will pick up later the points the hon. Gentleman raised on finances and his self-professed pessimistic view on life. I will encourage him to have a slightly rosier view by the time my speech finishes. Whether I succeed is another story. I see he is busy looking at his papers.

I start with sounding alarm bells on what the Minister mentioned in relation to finance of further potential burdens on local authorities. I mentioned earlier that I had had meetings with East Dorset District Council. My constituency covers three local authorities—East Dorset, Purbeck and Poole—and each will be concerned about additional burdens if additional resources do not match them.

I want to come back to finances but I was heartened by the reassurance that, if there are to be further amendments—as we understand there will be on Report—there will be an opportunity for additional funding. I simply ask that the Minister, as he has done at this stage, gives an early indication when the new clause is considered on Report of the level of funding he assesses as necessary.

I support the principle of clause 1 but my concern relates to notices given under section 8 of the Housing Act 1988. Although amendment 17 looks like it offers a neat proposal, in fact it sweeps away any reference to a valid notice being given under section 8. The Minister began to give an explanation of why notices given under section 8 are to be swept away, but I fear he did not give us as complete an answer as he may or should have done.

Section 8 notices are important. As the hon. Member for Hammersmith noted, section 21 notices are no-fault notices, whereas section 8 notices are given where there has been fault, where there has been a breach of a tenancy agreement. Section 8 notices are divided into two parts: mandatory and discretionary. If an allegation that a tenant has breached a mandatory obligation is proved, a judge as of right will give a possession order. That is the mandatory part of the notices given under section 8. If it is an allegation under the discretionary part, there is discretion as to whether a judge would make an order for possession. I therefore fear that throwing all section 8 notices out might not have been as wise a move as it looked, because what section 8 and section 21 notices have in common—at least partly—is that they may inevitably lead to a possession order.

Although I note the reasons that the Minister gave for keeping section 21 notices in—they are mandatory, and it is all but likely that they will lead to a possession order in any event—those reasons also apply to the mandatory part of notices given under section 8. Take arrears of rent: if there are two months’ worth of arrears, both when the notice is issued and when the matter arrives at court, a possession order is mandatory, as it is in a no-fault procedure in relation to section 21.

However, I take on board what the hon. Member for Hammersmith said: there might still be a dispute about whether the correct notice has been given under section 21. I have stopped practising—I understand he has, too—but since October 2015, there has been a new regime for section 21 notices. They now have to be done on a mandatory form, whereas under the old system, when I was practising, there was no prescribed form for what a section 21 notice looked like.

I fear that throwing out all section 8 notices narrows things down too much, which is potentially unhelpful for those who inevitably will end up homeless. That is the thrust of clause 1 and why it has been devised: to help those who inevitably will end up homeless by inserting into section 175 of the Housing Act 1996 a change to the definition of homelessness. If it is inevitable that an individual—a tenant—will end up homeless, it is worth looking again at whether the mandatory parts of notices under section 8 should still fall into clause 1 as well.

We all want as many people helped as possible. I said I will come back to finance, but it is relevant in this instance as well. The more people who are helped earlier, the more it will help with the costs to them, local authorities, and housing associations or anyone who needs to take proceedings in court. It will also help in respect of the human cost. My understanding is that the clause’s intention is to help people who are inevitably going to end up homeless, so I ask the Minister and my hon. Friend the Member for Harrow East, the Bill’s promoter, to address this point: why have all section 8 notices been taken out, instead of retaining just the mandatory ones, where it is all but inevitable that a possession order will be granted?

I want to make a related point that shows the complexity of the Housing Acts. Perhaps at some stage a Government will be bold enough to look at a consolidation Bill—or perhaps not. Section 89 of the Housing Act 1980 is still in force. It relates to pleas of exceptional hardship, but that would only delay possession and not stop it. It is not a defence; it is only a mechanism to delay the inevitable. Even with that in place, it is still inevitable that people will be made homeless, and therefore help should be provided at the earliest opportunity.

[Mr Burrowes]

We are grateful for my hon. Friend’s expertise on this issue. He has spoken about section 8, but section 7 is also not part of the amended clause, so should further consideration be given to including section 7?

[Michael Tomlinson]

May I clarify that my hon. Friend means section 7 of the Housing Act 1988?

[Mr Burrowes]

I do.

[Michael Tomlinson]

Section 7 is important, because it states whether possession is mandatory or discretionary. It refers to schedule 2 to the Act, which has 17 parts, the first eight of which list mandatory grounds for possession. The ninth to 17th grounds for possession are discretionary. Section 7 of the 1988 Act, which, if I understand correctly, is what my hon. Friend referred to, is what distinguishes between mandatory grounds and discretionary grounds. I can see he looks slightly puzzled, so perhaps he means something else. If he did mean section 7 of the 1988 Act, it gives effect to schedule 2 and a body of law. Part I of the schedule sets out the mandatory grounds and part II sets out the discretionary grounds. It effectively feeds into notices given and possession proceedings under section 8 of the 1988 Act.

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[Will Quince]

I absolutely agree with my hon. Friend, who makes a valid point based on his experience and practice. I hope that the Minister will answer those points.

My hon. Friend the Member for Chippenham made a good point about emphasising early intervention. The clause encourages those at risk of homelessness to seek advice at the earliest opportunity, and I worry at the moment about the advice being given to local authorities. This advice disseminates quickly across local authority areas so people know that is being given out and it discourages them from going to the local authority. For example, first and foremost, they will often go to their Member of Parliament, the local council or a citizens advice bureau. If they say the likely advice from the council is this, they will be reluctant to take it. As my hon. Friend rightly said, the crisis point is far too late. We must intervene earlier, which will lead to far fewer people reaching a crisis.

Finally, I want to touch on funding. I was pleased about the funding announcement. As the hon. Member for Dulwich and West Norwood rightly pointed out, it would have been helpful to have it sooner, but nevertheless it was useful to have it before this sitting. I welcome the £48 million and, as I mentioned in an intervention on the hon. Member for Hammersmith, I was interested to read the LGA’s response because, given the fact that it is a membership organisation representing local authorities across the country, I was expecting its response to be, “It’s not enough money.” I expected that response whatever the sum was.

It is hugely to the credit of the Minister and the officials in his Department for using the methodology that the LGA concurs, rightly in my view, is the right one and hence why a rather bland statement does not question the amount of money. It would certainly be worthwhile to review it after two years. Nevertheless it was somewhat disappointing, given the reaction of the LGA, to hear the response from the hon. Members for Hammersmith and for Dulwich and West Norwood. There is no indication from the membership body of local authorities—which, incidentally, will be the LHAs implementing the Bill—to suggest that the funding is not sufficient.

[Mr Burrowes]

Good authorities are already, before the legislation is in place, fulfilling the mandate to do a lot of prevention, so they will welcome the fact that they will now have a lot more money than before.

[Will Quince]

My hon. Friend makes an important point. He is right to suggest that good local authorities up and down the country are already doing a lot of this work, which eats into other budgets, so for them this is very valuable. We know there will be a transition, training requirements and a cultural change within organisations. LHAs—I spoke to my LHA only last week on this very point—do not want just to implement the Bill in full; they want to do it well. They want to make sure it works and they want emphasis and focus on prevention.

I very much support the clause, but I would like some reassurance from the Minister that there will still be flexibility in the advice, particularly in relation to ending a tenancy via a section 21 notice.

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[David Mackintosh]

I am grateful to my hon. Friend for raising this issue and I did indeed hear the argument he made so eloquently earlier. I am sure that the Minister and his officials also heard it, and that this issue will be looked at properly before we move forward. It is important that we consider all the options available. We have spent a lot of time in Committee debating matters, but I know the Minister is still considering some of those ideas.

As for this clause, I strongly welcome the relative speed at which things have developed, from the Select Committee inquiry to—I hope—a change in the law, and I look forward to hearing the Minister’s update on how he can consider implementing in the future some of the changes that we have discussed.

[Mr Burrowes]

This clause goes to the heart of the concern that led to this Bill, namely the reality that the Select Committee and others have identified, which is that the termination of assured shorthold tenancies has become the single biggest cause of homelessness. While we can talk about the issue of the supply of affordable homes, we must go to the heart of this problem and this clause seeks to do so, in a more flexible way than other measures.

I will just talk about where support can come from and where it can feed into the issue of the supply of affordable rented homes. The Select Committee itself drew attention to the response of the National Landlords Association to the draft Bill. The association said:

“There are numerous reasons why a landlord might be reluctant to let their property to such households, but in the NLA’s experience they can generally be summarised as ‘risk’”.

Clause 1, as amended, will provide a positive move to reduce the risk to which landlords are exposed, therefore increasing their confidence in letting to vulnerable tenants. In my borough, and no doubt in other boroughs as well, the supply of homes available for rent to those on benefits, and particularly to those who are homeless, is decreasing. Unless there is supply, we will struggle to fulfil all our ambitions for the Bill. The amendments will help.

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[Michael Tomlinson]

I am grateful to my hon. Friend for his support on this. If there is a substantive reason why section 8 should not form part of clause 1, so be it, but he raises an important example. He mentioned antisocial behaviour, which in fact will fall within the discretionary grounds that are often relied on alongside a lesser outstanding rent. Where two months’ rent or more is outstanding both at the time of the service of the notice and the time of arriving in court, that falls under the mandatory grounds. It is worth looking at it in the round.

[Mr Burrowes]

Yes, and I look forward to hearing the Minister do that for us. Plainly, the essence of clause 1 is to prevent various local authorities, advice centres and indeed Members of Parliament from being complicit in a failed system by saying simply, “Sorry, nothing can happen until the bailiffs knock on the door.” We are dealing then with crisis management rather than with any kind of prevention. The trigger is the important element. Amendments 16 and 17 seek to change the trigger from an expiry notice under section 21 to the serving of the notice. I know that that has been particularly asked for and welcomed by the Association of Housing Advice Services, which has wanted to ensure early opportunities for prevention.

It is also worth recognising that there are some noises off. Not everyone agrees, as my hon. Friend the Member for Harrow East will know. Indeed, such noises off have come his way—and the Select Committee’s way—from his local council. Harrow Council says:

“If applicants are to be considered as homeless as soon as they receive a notice, then local authorities are not going to be able to prevent homelessness…There are at least 14 reasons why a s.21 notice can be invalid and homelessness can be prevented even after a court order using the legal processes and negotiations with a landlord.”

That draws on some of the concerns about the question of a valid notice. The word “valid” was also in clause 1 as originally drafted. No doubt the advice of lawyers and others says that one has to have that word and notices have to be valid. I would nevertheless be interested to hear from my hon. Friend, because his council has expressed concern that notices can be used in a lot of ways.

I understand that notices now cannot simply be used for administrative expediency. There was a time when section 21s were served pretty much when the landlord arrived at the door, as a way of covering all bases. I understand that that has not been allowed since October 2015, but a landlord may try it on, so it is worth ensuring that that bad practice is not allowed, that landlords do not abuse the essence of this trigger and that the notice has proper validity, if I can use that word, and applies genuinely. Section 21 notices have a wide application. Obviously, such a notice being served does not necessarily mean that there is a danger of homelessness, but they will allow the prevention duties to be put in place.

I also want to highlight some of the caution expressed by Crisis, which has been involved in the Bill from an early stage. I understand that Crisis had reservations about amending clause 1. In its briefing note—this draws out the comments made by my hon. Friend the Member for Colchester about his campaign against a crisis-management approach on receipt of a bailiff notice—it says that the removal of clause 1(2) will preserve

“the status quo—meaning that local authorities should follow the existing Code of Guidance which clearly states that households should be considered homeless if they approach the local authority with an expired section 21 notice.”

The amendments will therefore perhaps leave the door open for local authorities not to follow good practice and for people who are considered homeless being put back in that situation. We need to nail that down and ensure that all authorities are signed up to and delivering on the codes of guidance, empowered by their statutory form, as well as revised clause 1.

On funding, it is worth giving the Minister and the Government a little more encouragement and support. Frankly, without the Bill—I pay tribute to my hon. Friend the Member for Harrow East—we would not have got the extra £48 million, which we should really welcome; it is a significant amount of money. As we have all said from the very beginning, the Bill will not solve homelessness on its own, but it is an important tool in the box and encourages the good practice that is out there to be spread among councils. As I said earlier, good councils will welcome the incentive to do more of what they have been doing with existing funding, and the councils that are not doing anything will be encouraged with a carrot and stick approach. The Minister will no doubt use his codes of practice tool as well as some carrots, including funding, to say, “Get on and do what we all say should happen.”

There should be broad agreement for the additional money, which is welcome, but I recognise the context in which the funding is provided—the LHA freeze and the benefits cap implications. I represent a London constituency that has a deprivation profile that is going in the wrong direction and does not fit in with what we await as a new fairer funding formula. We are going in the wrong direction in being able to catch up with the demands on our borough, not least given the lack of affordable housing. I recognise that context, but the funding should be broadly welcomed none the less.

A lot of figures expressing doom and gloom and fear around the funding implications of the duties in the Bill were thrown around on Second Reading, which I think was based on a reading of an old draft Bill rather than the new position. My local authority joined in with that. It is important for local authorities to be up to speed and to recognise that the Bill’s methodology is far removed from that in the Select Committee report, which was based on Bedford Borough Council’s methodology. That council said itself that:

“Using a simple extrapolation model based on the Council’s existing footfall and the range of tools currently available to the Council to prevent and relieve homelessness, the Council would see a tripling of its costs incurred in discharging the duties under the draft bill. This would see an additional £1 million of cost to the Council.”

Unless councils were looking at this carefully, they were making assumptions on funding, such as Bedford saying staffing levels would need to increase by 50%, or the Royal Borough of Kensington and Chelsea estimating that it would cost £1.22 million to comply with the new duty to assess and £2.37 million for the duty to help secure accommodation. I know time has been short since the ministerial statement, but it is important that local authorities look at the current funding in the context of the Government’s methodology, rather than relying on their simple extrapolation model.

[Michael Tomlinson]

Was my hon. Friend as reassured as I that the Government looked at funding compared with Wales, which already has similar legislation, and made assumptions on that basis? These are significant figures that are based on fact, rather than, dare I say it, just plucking out figures that sound rather inflated.

[Mr Burrowes]

Yes, and those costs were the exact homelessness spends by local authorities taken from the data submitted by local authorities on P1E forms that are used for the Government’s homelessness statistics. Research by Shelter and Acclaim also helped to inform the costs of prevention actions and of an acceptance. That, together with recognising that there are no doubt differential costs from area to area, is an important part of the reflection in the formula.

On the assumptions, I take issue with the shadow Minister, who took a very gloomy view. He cannot have it both ways. I still expect that there is cross-party support for the principle of the Bill and the fact that it will improve prevention, advice and support for those threatened with homelessness across the country. We cannot sign up to that, but say that is not going to have any effect. It is bound to have an effect over the number of years.

The Government’s assumption is that they will not simply go along in a simplistic way, as they perhaps could have done. Wales saw a 69% decrease in homelessness acceptances in the first year of having its legislation, although I recognise that there are differences in housing supply. We are going to get somewhere near that. The assumption is that there will be a 30% decrease in homelessness acceptances over three years. If the Bill has not led to a 30% decrease in homelessness acceptances in a three-year period, we will be really disappointed. We will not have done a proper job in passing a Bill that is fit for purpose and achieves that. Aside from the funding issue, if it has not practically done that there will be some serious questions to answer.

If there is not a review by the Government, no doubt the Select Committee will be asking some serious questions. If it does not achieve that, why not? It certainly should not come from a lack of funding, so we need to ensure that that is in place. The Government’s other assumption is that Wales saw a 28% increase in costs, so the sensible assumption for England is a 26% increase. That is a fairly reasonable assumption to make.