Exempt Supported Accommodation

Helen Morgan Excerpts

Tuesday 10th September 2024 Westminster Hall

[Helen Morgan (North Shropshire) (LD)]

It is a pleasure to serve with you in the Chair, Sir Mark.

I congratulate the hon. Member for Birmingham Edgbaston (Preet Kaur Gill) on securing this debate and on her excellent speech, in which she highlighted all the difficulties that we knew existed in this sector. She also provided some real colour about what those difficulties mean for residents of exempt supported accommodation units, for local residents who are impacted by some of the bad-faith actors, and for local communities. I do not want to go back over some of the ground that has already been covered, because she covered it so well, but I am afraid that I will have to. Before I go any further, however, I should declare that I am a vice-president of the Local Government Association.

In 2022, I served on the Public Bill Committee for the Supported Housing (Regulatory Oversight) Act 2023, which was introduced by the hon. Member for Harrow East (Bob Blackman) as a private Member’s Bill. It was an important step forward that had cross-party support from the then Conservative Government, the Labour Benches and the Liberal Democrat Benches, because the issue had become so severe.

The system of exempt accommodation was well described in the October 2022 report by the Levelling Up, Housing and Communities Committee as:

“a complete mess. There are many good providers, but in the worst instances the system involves the exploitation of vulnerable people who should be receiving support, while unscrupulous providers make excessive profits by capitalising on loopholes. This gold-rush is all paid for by taxpayers through housing benefit.”

That is a sorry state of affairs.

The then Government supported the Bill introduced by the hon. Member for Harrow East, because it was seen as a good way to deal with the situation that was described by the Select Committee and by the hon. Member for Birmingham Edgbaston today. In response to the Select Committee’s report, in early 2023 the Conservative Government said that the Supported Housing (Regulatory Oversight) Act 2023 would address most of the concerns that had been raised in the report, because it would introduce national standards for support and give local authorities the powers they need to set up licensing schemes to tackle poor-quality supported housing in their area.

The Act provided for local authority supported housing strategies to review the situation in their area and the availability of and need for supported housing, and those strategies were to be renewed every five years. It also required the Secretary of State to set up a supported housing advisory panel to provide information and advice about supported housing; it allowed for the Secretary of State to set standards for the support provided in supported housing; and it allowed for regulations to be made to establish licensing schemes, which would include consideration of the condition of the property, the adequacy of the care and support provided, interactions with other licensing schemes, the costs, the financial penalties and all the things that needed to go with a properly functioning licensing scheme

The Act also required the Ministry of Housing, Communities and Local Government, as it is now called again, to formally consult on elements contained within it, including the licensing regime, standards and any additional measures for securing compliance with the standards. As we have heard, however, much of that has not yet happened, despite the Act going through Parliament in 2023.

The Act provided for better planning regulations; it said that somebody would not be treated as intentionally homeless if they left supported accommodation; and it provided for information management and sharing powers for those involved in the provision of supported housing. All in all, it seems to have been a pretty good piece of legislation, and the problem that we are experiencing now, as the hon. Member for Birmingham Edgbaston described in great detail, is that those provisions have not been enacted quickly enough. Today’s debate is about urging the Minister to bring forward the actions that are needed now to make sure that we improve the sector.

The LGA is supportive of that legislation and has been a main stakeholder working with the Ministry to ensure that the Act works for councils, providers, and most importantly, residents in supported accommodation. But the LGA has raised significant concerns about the time taken to implement the Act and about the fact that councils have limited means to challenge poor providers, other than through housing benefit claims, which is problematic. We heard from the hon. Member that Birmingham city council has actually been able to challenge providers, so it would be interesting to find out from the Minister whether that is likely to be a model in future or whether better mechanisms will be put in place.

As the hon. Member said, the delayed implementation of the Act is a problem for councils that have used the SHIP payments to improve supported housing in their area. The gap in funding between the SHIP payments and the new burden spending that comes with implementation of the Act means that councils will potentially have to let go of their skilled workforce and people with good experience of dealing with the problems and social implications of poor housing.

It seems that in every debate at the moment, we must talk about the funding crisis for all councils. They need long-term funding arrangements with ringfenced support for housing, because the increased pressure on council budgets from that sector means that not only are we letting people down who have an acute housing need, but we are letting down everyone else whose services are impacted by the exorbitant cost of providing housing across the whole of England, particularly in communities where the sector is out of control, as the hon. Member alluded to.

The calls of the LGA are, as always, very sensible. We need to review the current funding regime for supported housing. We also need to recognise the savings to the public purse that will come from not giving those unscrupulous providers limitless amounts of public money for a very poor service that will not realise any of the benefits that supported housing should realise for its inhabitants and wider society by providing the support they need.

We need to ensure that the SHIP funding is there in the interregnum between now and the new burden spending, so that councils can continue the work that they are already doing, and crucially, can retain the skilled officers who are experienced in dealing with this situation. We also need to acknowledge that a licensing scheme and its enforcement, with improved standards for supported housing, will require proper funding. Otherwise, councils will be unable to deliver on the statutory requirement that we are about to place on them.

The funding is so important. I know that the Government are dealing with a financial crisis, that they have extremely difficult choices to make, and that almost all Members will standing up in every debate to ask for more money—it is a difficult position to be in—but I urge the Minister to consider that, as taxpayers’ money is wasted so flagrantly on these unscrupulous providers, it would be a good use of public money to establish a proper licensing scheme. That would mean that we were not wasting taxpayers’ money and were instead putting it into support for the individuals who have had a crisis, hopefully turning their lives around, and costing the taxpayer less in future. That would be a wise investment of taxpayers’ money.

On the important issue of resource, many councils are having to let staff go because of funding pressures. We cannot enforce and practise a licensing scheme without the right people in officer roles in councils, so the recruitment and retention of those critical staff is also extremely important. I honestly do not think that I have added much to the hon. Member’s excellent speech, but I hope that I have added my voice to her cause on regulating the sector properly.

Oral Answers to Questions

Helen Morgan Excerpts

Monday 2nd September 2024 Commons Chamber

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Helen Morgan (North Shropshire) (LD)]

Recent freedom of information requests by the Liberal Democrats found that four out of five councils that responded had someone on their social housing waiting list for more than a decade, and this shocking statistic comes all while the stocks of social housing have been reducing. Will the Minister consider reforming the land conservation Act, so that local councils can buy land at current value rather than hope value and get on with delivering the social housing that we so desperately need?

[Matthew Pennycook]

I thank the hon. Lady for drawing attention to the appalling record of the previous Government on affordable housing, in particular social rented housing. Over the past 10 years, the number of social rented homes owned by registered providers fell by over 205,000. We have to take action to better protect our stock and build new social rented homes, but she is absolutely right that further reform is needed of compulsory purchase orders, how they are drawn and the powers available to councils. We first need to enact the changes that were introduced by the previous Government though the Levelling-up and Regeneration Act 2023, but we intend to go further, and will consult on that in due course.

--- Later in debate ---

[Mr Speaker]

I call the Lib Dem spokesperson.

[Helen Morgan (North Shropshire) (LD)]

Residents in rural areas such as my constituency are seeing drastic cuts to local services despite their council tax having gone up this year. That is because councils are struggling to balance budgets. When the fair funding review takes place, will the Secretary of State commit to considering the cost of delivering services in vast rural areas, which is in excess of the same cost in urban areas?

[Jim McMahon]

We will absolutely ensure that the true cost of public service delivery is accounted for in different parts of the country and in different local authorities—that will be part of it. However, I say gently that although the Conservatives were the architects of austerity, the Liberal Democrats were definitely there sharpening the pencil.

Funding for Local Councils

Helen Morgan Excerpts

Wednesday 22nd May 2024 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

I declare an interest as a vice-president of the Local Government Association.

I thank the Minister for attending this evening and for his response. I appreciate that it has been a bit of an unusual day, so I will not be imploring him to make all sorts of commitments from the Dispatch Box, given the unusual circumstances in which we find ourselves. I would like to raise some important matters. If I am lucky or privileged enough to be returned to this place by the constituents of North Shropshire, I will continue to campaign on these issues on their behalf.

Many hon. Members across the House have raised the issue of the crisis in local government funding in recent months. I wish to highlight some of the specific challenges faced by rural councils, and in particular by my own council of Shropshire, which deals with the area of North Shropshire.

Most people’s experience of government is local, as we know. They drive on the roads every day, so they experience the potholes and the conditions of the roads. They use the waste disposal services, whether that is having their bins collected or taking them to a recycling centre. They might use a swimming pool. They might have a friend, relative or loved one in need of social care, or they might need it themselves. They might have a child in a local authority-maintained school. Therefore, local government is most people’s experience of government, and it is the backbone of our communities.

Since 2016, councils have seen a £5.25 billion real-terms cut in the funding they receive from central Government, and that is driving deep inequality in our communities and impacting on people’s perception of the value they receive from the tax they pay. Shropshire Council had to find £50 million of cuts in the financial year that just ended, and it is saying that it will need to make a further £60 million of cuts in the coming year. That is an enormous cut and it will affect everyone in North Shropshire, but it will affect vulnerable people the most, and that is my area of concern.

Now why is this? It is very tempting to stand here and say that Shropshire is Conservative-run, which is why it is in so much trouble, but although I believe that Liberal Democrats would do a better job, the reality is that the council spends around 85% of its budget on social care. That is more than the average of councils across the country, which spend about two thirds of their budget trying to meet adult and child social care costs. It means that, in Shropshire, for every pound that we give to the council for services, only 15p is spent on other things, whether statutory provisions such as libraries, or other big-ticket items, such as highways, and it really is not enough money.

The problem is that the quality of social care is being affected as well. Earlier last year, I met an elderly couple in Ellesmere, who have loved and cared for their disabled daughter all of her lives. When she became ill and went into hospital, they were unable to continue that level of care when she was discharged because of their own health problems, so they needed a more supportive arrangement. The council found a sheltered flat for their daughter. They paid for new carpets and were excited about her having that new arrangement. But just two weeks before she was due to move in, the flat was withdrawn because it was considered to be too expensive, causing a huge amount of trauma and concern about the money that they had invested in the flat. We were able to reverse that decision in that case, but they are far from the only family in that situation. In fact, half a million people in England are desperate for social care.

The reality is that Shropshire Council cannot outrun the growing demand for social care. It might make the £60 million of cuts this year and avoid a section 114 notice this time around, but will it—or indeed any other administration—be able to do that in future? Given the increasing level of demand, I think that any administration will struggle to achieve that.

Every single person in Shropshire has seen, and will see, an increase in their council tax, and what they are getting in return is reduced services. All the while, adult social care need is not being met, as the Public Accounts Committee recently confirmed. I strongly suspect that is because we are trying to fund social care through council tax, which is a regressive, broken tax that goes nowhere near matching the cost of the service that we are trying to deliver with a sensible revenue stream to fund it. I do not think that we will fix the problem unless we totally revisit how we fund social care, and indeed how we collect council tax.

It is not just people receiving social care who are feeling the brunt of the cuts; it is all the services that we expect to receive. Last month, our council announced the closure of two of the five recycling centres in Shropshire, two of which are in my constituency. If either of those close, some of my constituents will have a 45-minute drive to a recycling centre. I am sure that they will make that drive. We are all dependent on our cars—we do not have great bus services—and I am sure that law-abiding citizens will do their best to get their refuse to a tip that is further away, but North Shropshire is a beautiful rural constituency with miles and miles of remote isolated roads, and it is at high risk from fly-tippers. People are genuinely concerned that the beautiful countryside will be ruined by that criminal activity, and it will cost the council even more to clean it up. We seem to be taking with one hand and spending huge amounts of money with the other, which might not have the desired outcome.

There is a similar story on special educational needs and disability. Local authorities obviously have to pay for transport for SEND pupils, and the rationing of that transport is becoming a huge problem for some of my constituents. I was contacted by Shane and Brad, the foster parents of Toby, an 18-year-old with special educational needs. He moved from Norfolk to Shropshire five months ago on a special guardianship arrangement, with the understanding that his education, health and care plan would be transferred and the provision would continue. Not only can they not afford to transport him around to wherever specialist place might be available; but because he is over 16, they have not been able to find a specialist place, so poor old Toby has not been to school since he moved to Shropshire five months ago.

The council do not have the resources to solve this problem. There are not enough specialist teachers or educational psychologists, or enough specialist places in state schools. As a result, young people face a postcode lottery when it comes to funding to support their EHCP. In rural areas, transport for children with special needs is particularly problematic because they have to be transported over larger distances at greater cost. Again, the council is not depriving those people through malice or a lack of care; it simply does not have the funding to meet the demand.

Perhaps less seriously—although this still has a huge impact—there is a problem with leisure facilities. Whitchurch in my constituency has recently lost not only the town’s only performance space but its registry office, driving test centre and library, as well as rooms that community groups can hire out for regular use, because the civic centre has reinforced autoclaved aerated concrete in its roof. We would think that the council would be able to fix the problem, and find some money to repair the roof, but that is not the case. The council cannot afford the interest payments and has said that the cost is prohibitive. It is now trying to find alternatives, which will ultimately lead to a lesser space. That is a problem for residents who enjoy the use of those facilities, but it also has a huge economic impact on the town centre, with businesses already reporting to me that they have reduced footfall. That is of great concern.

There is a real problem with libraries. A third of libraries have closed in the past 10 years, despite libraries being a statutory service. Because the comprehensive and efficient library service that is required is not defined, lots of councils are cutting libraries and their availability. Again, that is driving deep inequality. The National Literacy Trust has found that children who read at their expected age level are twice as likely to be library users as not to be. If we want to level up, it is really important that we give children from all backgrounds the opportunity to read, access a library, and make the most of their education.

I will move on to public transport, which I have talked about a lot in this place. Shropshire has a particularly poor public transport network and has lost the most miles of bus services anywhere in England since 2015, with 63% fewer miles being completed by bus than in 2015. That is a drastic decrease, especially compared with places such as Milton Keynes, where bus miles have increased. There is definitely a way of doing it if we have the funding right.

Poor public transport is a problem for the economy because we cannot transport workers around, which gives us a labour supply issue. It is a problem for young people trying to access college courses because they do not know whether their bus service will be there next year, and it is a problem for older people who may be trying to access the hospital because to get there by taxi is unaffordable.

Again, given that we are about to embark on a general election, this is possibly not the right moment to implore the Minister to allow the franchising of bus services, but I put on record that if councils could fund those services, it would have a huge economic regenerative impact. It would be great to see buses be a priority for all the parties in the general election, because they have such a good impact on increasing labour supply and on enabling people of all ages and all income levels to live, work and get about the community.

In conclusion, I want to make the point that rural areas are struggling perhaps more than urban areas, despite the fact that we sometimes assess urban deprivation as worse than rural deprivation. It is certainly more visible, but the central Government funding for local councils has lost touch with reality on the cost of delivering those services, and indeed to some extent on the level of need. When we look at the impact on people, whether it is social care or special educational needs provision, swimming pools or libraries or recycling centres, all those things are suffering and they all cost more to deliver in a rural area.

I want to state this case again to all political parties, because we do not know who will be sitting in the Minister’s seat after the general election: sorting out the fair funding formula is very important. Delivering in rural areas is essential to regenerating the economy in those areas. One fifth of the population live in rural areas. They are underperforming economically and we need to ensure that local councils have the funding they need to provide regeneration and quality of life for those well-deserving people who live in those beautiful parts of Britain.

Oral Answers to Questions

Helen Morgan Excerpts

Monday 22nd April 2024 Commons Chamber

[Jacob Young]

I think that is quite poor, Mr Speaker. The hon. Gentleman’s constituency has itself benefited from £11.1 million of UK shared prosperity funding and £13.4 million from the levelling up fund. Next to him I see the hon. Member for Oldham West and Royton (Jim McMahon), whose constituency has benefited from £24.4 million from the towns fund. Oldham is also the recipient of £10.8 million from the future high streets fund. We are levelling up right across the country, including in the hon. Gentleman’s constituency.

[Helen Morgan (North Shropshire) (LD)]

8. What assessment he has made of the adequacy of the level of Government funding allocated to local authorities.

[The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Simon Hoare)]

In answer to the hon. Lady’s question, we make continuous assessment with regard to the adequacy of funding. In this financial year we have made £64.7 billion available to local government in England, an above-inflation increase for local authorities as their real-terms increase in core spending power is now up to £4.5 billion or 7.5% in cash terms. That includes the additional measures for local authorities, worth £600 million, that we announced on 25 January, having listened to the views of local government, to her views when she engaged in the consultation and to the views of hon. and right hon. Friends across Shropshire.

[Helen Morgan]

I thank the Minister for his answer, but we have seen Shropshire Council make £50 million of cuts this year, and we are told that there will be £60 million of cuts next year to avoid a section 144 notice. Local residents are particularly concerned about the potential closure of recycling centres and a likely increase in fly-tipping across our beautiful countryside. Does the Minister agree that rural councils are in danger of delivering nothing more than statutory services if things continue? Will he consider adjusting the way that funding is allocated so that rural councils are given an amount that reflects the cost of delivering services in their area?

[Simon Hoare]

The hon. Lady is right to point to the need to review the formula, which is a commitment for the next Parliament. She will probably be aware—I hope she is—of the £8.9 million extra that Shropshire Council received this year through the rural services delivery grant in order to deliver those sorts of services. Do I think rural councils have to reduce to statutory services alone? No. All my engagement with the sector points to a vibrancy and a commitment to innovation, shaping places and improving the lives of people up and down the country, including in Shropshire.

Leasehold and Freehold Reform Bill

Helen Morgan Excerpts

Report stage
Tuesday 27th February 2024 Commons Chamber

[Nickie Aiken (Cities of London and Westminster) (Con)]

I fully support the Government’s wish to overhaul the antiquated and feudal leasehold system in this country and address the imbalance of power between freeholders and leaseholders. I thank the Minister for his ongoing discussions with me about a number of issues I have with the Bill, and for attending the leasehold roundtable that I held recently with my constituents.

I would like the Government to abolish the system completely, but I understand that that will not happen with this Bill. I have therefore tabled an amendment and three new clauses that would improve the Bill further. New clause 12 would reduce the participation threshold required to claim the right to manage from 50% to 35%. That is a massive issue in Cities of London and Westminster. More than 1,300 properties in the City of London and an eye-watering 12,100 in Westminster have owners living abroad or are owned by companies using central London’s golden postcodes as a place to park their cash. That reduces the ability of leaseholders in those blocks to secure the 50% of signatures required to achieve the right to manage, as it is incredibly difficult to contact those overseas leaseholders for a meaningful discussion.

Let me give an example of that type of dilemma in my constituency. Residents in The Quadrangle in the Hyde Park Estate say that leaseholders in their block will struggle to meet the 50% participation threshold. They estimate that at least 40% of leaseholders in their block do not live in the building and are uncontactable. Accepting new clause 12 and lowering the threshold to 35% would give many more leaseholders living in similar blocks the chance to manage their buildings.

I commend the work that has been done on the Bill to support blocks that have shared commercial and residential usage. The Bill proposes to increase the proportion of commercial or non-residential space permitted in an individual block for a right to manage application from 25% to 50%, but I believe we can go even further. I have heard from many residents whose blocks will fail to qualify even after the threshold rises to 50%. For example, residents of 8 Artillery Row in Victoria believe that increasing the threshold to 50% does not go far enough, as the residential element of their block is lower than 50%. That is why amendment 17 is needed, as it would allow residents in a block with up to 75% commercial premises to apply for the right to manage.

New clause 14 is similarly designed to allow more leaseholders to strive for the right to manage, especially those in mixed-use buildings. Simply sharing a broom cupboard with a commercial property can disqualify them from claiming the right to manage. At Cambridge Court in Marylebone, for example, leaseholders striving to manage their block would benefit from the Government’s proposals to increase the non-residential threshold allowed in a building, but they are concerned that their ability to qualify for the right to manage would be undermined by the existence of a single shared car parking space in their building. My new clause 14 would amend the Commonhold and Leasehold Reform Act 2002 by adopting recommendation 5 from the Law Commission’s “Right to Manage” report, which is to allow leaseholders in mixed-use buildings with shared services or underground car parks to exercise the right to manage.

Finally, my new clause 15 would correct the unintended consequences of the Building Safety Act 2022. That Act has interfered with the long-standing section 24 regime, which was a vital right for leaseholders. It introduced an accountable person mechanism that expressly banned section 24 managers from being the accountable person. Consequently, specially trained and vetted professional property managers willing to take on difficult sites have been barred from being the accountable person. That makes absolutely no sense, and it stripped leaseholders of an existing right. That could not have been the Government’s intention when they introduced the 2022 Act, which was intended to provide leaseholders with additional statutory protections. So many leaseholders in my constituency and across the country would benefit from applying for a section 24 manager, but they cannot risk it if they are in blocks of 18 metres or higher because of the accountable person regime issue arising from the Building Safety Act. It is imperative that our buildings are safe, that leaseholders are safe, and that the burden does not fall heavily on leaseholders.

I will not press my amendments to a vote, but I hope that the Government will consider what I have spoken about and work with me to introduce the measures in the other place. This is a watershed moment for the Government to prove that they understand the terrible treatment that leaseholders have faced and continue to face by incompetent freeholders, and to address the imbalance between freeholder and leaseholder. I hope that the Bill will deliver real change.

[Helen Morgan (North Shropshire) (LD)]

I rise to speak to new clause 1, which was tabled in my name, and in support of a number of new clauses and amendments tabled by right hon. and hon. Members from both sides of the House.

I tabled new clause 1 because, as was said by the hon. Member for Harborough (Neil O’Brien), who is no longer in his place, fleecehold is a scam. It attempts to deal with the issue whereby a freeholder is trapped in a situation where they pay estate management charges for the areas around their development, be they roads, play areas or open spaces. Critically, the new clause also deals with the shared assets that might be in use to service their homes, such as ground source heat pumps, septic tanks or sewage pumps. I am sure that there are many instances in which the management company does a great job and charges reasonable fees for its work, but my inbox—like those of many hon. Members—contains horrifying examples of the management company, which is usually directly owned by or related to the developer in North Shropshire, failing to do a good job, or to do any sort of job at all.

There is a freeholder in my constituency, for example, who must obtain an information pack from their estate management company in order to sell their house. Despite repeated requests, my constituent has not received that information pack, so their sale has been significantly delayed and is at risk of falling through altogether. The management company is apparently just a shell—it does not respond to correspondence, hold annual general meetings or provide accounts—so the affected residents are powerless and cannot take control of the company and appoint a reliable professional to provide the services that they so desperately need. New clause 1 would allow them, where the management company has gone AWOL and will not respond to anything that they request of it, to take control of the company and do those things themselves.

The new clause also extends to assets, which may be more of a rural problem when it comes to shared estate charges. In one example in my constituency, a developer installed a ground source heat pump to provide all the heating and hot water for a barn conversion development that involved several houses in the same set of barns.

That developer has two separate companies: one is the management company through which he charges the owners of those houses for their electricity bill, and another, totally separate company that was nothing to do with the sale process, which is where he placed the heat pump. As such, he is able to cream off all the renewable heat incentive income for himself; he provides accounts to residents through the management company, but does not provide them with any information about the fundamental asset that is servicing their home. Those residents are unable to benefit from the renewable heat incentive that accrues from that asset, and do not know whether it is being properly maintained and serviced. They are unable to do so themselves—they have no rights in relation to that heat pump.

--- Later in debate ---

[Sir Peter Bottomley]

I draw to the hon. Lady’s attention and that of the Minister the article by Patrick Hosking in The Times today, which deals with estate management companies and estate management charges. I hope that the Government will read what he has written and see what they can do to make things better.

[Helen Morgan]

I thank the hon. Gentleman very much for his intervention.

I will conclude by saying that I support the amendments that would require professionalisation of the industry— that would be very sensible and consistent with other legislation that the House has passed. I also support new clause 5 and amendments 4 and 8, tabled by the shadow Minister, the hon. Member for Greenwich and Woolwich (Matthew Pennycook); new clause 39, tabled by the Chair of the Select Committee, the hon. Member for Sheffield South East (Mr Betts); and new clause 25, tabled by the Father of the House, the hon. Member for Worthing West (Sir Peter Bottomley). The Bill goes some way towards providing the protection that we need, but it needs to go much further to protect freeholders from rogue developers and estate management companies. I urge the Government to take that away and do more.

[Mr Deputy Speaker (Mr Nigel Evans)]

To protect the last six speakers and protect ministerial time as well, there is now a five-minute limit on speeches, which will give the Front Benchers sufficient time to respond.

Local Government Finance

Helen Morgan Excerpts

Wednesday 7th February 2024 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

In common with many Members of the House, including 40 Members of the Government Benches who signed a County Councils Network letter a couple of weeks ago, I can report that my local council—Shropshire Council—is cutting services because it is chronically underfunded. I declare my interest as a vice-president of the Local Government Association.

It is disappointing to try to score political points about an issue that is so important and directly affects the lives of so many people. Shropshire Council is run by the Conservatives and, while undoubtedly the Liberal Democrats would make different political choices about how money is spent, there is no getting away from the fact that the issue affects councils of all types, under all parties, because there is a chronic structural funding issue that we need to address. Most people in Shropshire are paying more for less because of our social care costs, which amount to 85% of the budget. No political party will be able to solve that issue without additional help from central Government. There must be recognition of the social care crisis that is overwhelming councils such as mine.

It is worth reflecting on the amount of central Government funding that has been awarded to councils since 2016-17. According to the House of Commons Library, there has been a £5.75 billion decrease in real-terms funding—in Shropshire, that is about £37.3 million—and compared to 2015-16 there is 51.3% less funding per person in Shropshire from central Government. How are we going to stop people paying more for less? I do not have the answer, and I know the leader of Shropshire Council does not have the answer either.

What does that mean for people across the country? Providing fewer services drives inequality of all types. Let us think about the example of swimming pools. The Government have said 276 local authority pools have been closed since 2015, including the Whitchurch swimming pool in my constituency, although we are lucky because that pool is being rebuilt. Many places are not so lucky; people in my constituency may be without a swimming pool for years, but in some places it will be forever. If they cannot get to a neighbouring town, have access to a car or pay to go to a nice private swimming pool, their children will not learn to swim. That fundamental and deep inequality, which we should avoid, is a direct consequence of poor council funding.

Another example in my constituency is that the civic centre in Whitchurch has had to close recently because of issues with reinforced autoclaved aerated concrete and asbestos. The council cannot afford to either rectify or rebuild that civic centre because of the interest on the money they would have to borrow. The amount to be borrowed would be about £7 million, so the interest would be about £750,000 a year. The council should not be in a situation where it cannot provide cultural enrichment or generate economic benefit by bringing people into the town centre because it cannot afford that relatively small amount of additional borrowing for something so basic.

As I mentioned, Shropshire Council is Conservative-run. I have had some constructive meetings with its leader, who has been very open and said that the social care requirements will overwhelm the whole budget in future years unless something urgent is done. No amount of paperclip savings will get the council to the point where it will be able to afford our social care budget in the future. Not only do we have an ageing population and an elderly demographic, but we are also a very rural area. The cost of delivering social care is much higher in such areas—a point to which other Members have alluded—as carers have to travel long distances between each person they are caring for and so pay high fuel costs. It is much more expensive to deliver that social care.

We need to look urgently at the issue of fair funding, taking into account the cost of service delivery. While the £15 million increase in the rural services delivery grant is welcome, the total budget of £120 million will not touch the sides of the social care issues that councils in rural areas face. We urgently need the Minister to work with his colleagues in the Department for Health and Social Care to fundamentally reform how we fund and deliver social care. Until we grasp that nettle, we will not solve the issue of local authority funding with the odd extra bit of money here and there. Someone could end up in crisis just so that fewer councils have to issue section 114 notices.

I wish to touch on children’s social care and special educational needs and disabilities. I had an interesting conversation with a school recently about its budget. I realise that this is not a topic for this Department, but, while the money the school gets to support a child on an education, health and care plan is woefully inadequate—it makes a loss on each child that it is trying to support—the £6,000 cost is crippling the council budget. We need to look at that, but, again I urge the Minister to consider what that means for the lives of individual people. I have a case of a young man who has just turned 16. He has a life-limiting illness and severe disability. The council had to save money and made a policy decision not to fund transport for young people over 16 with special educational needs and disabilities, so his transport funding was cut. Thankfully, we have resolved the situation for that one individual, but there will be thousands of other individuals in the same position across the country, and the impact on the family is devastating. Those young people need to go to a special place during the day for additional care or schooling, and their parents need to go to work. If the transport is not there, it has a fundamental and detrimental impact on the life of that family. We need to acknowledge that and find a way to solve the issue.

The Levelling Up, Housing and Communities Committee report, which has already been referred to by the hon. Member for Sheffield South East (Mr Betts), has said that SEND support is an issue that will lead councils to a cliff-edge of section 144 notices, so we need to address that matter properly.

I also wish to touch on the issue of housing, which affects those district and unitary councils that have to deal with the problem of temporary housing. A couple of weeks ago, Eastbourne District Council organised an event in Westminster; they invited council leaders of all parties and from all parts of the country to discuss the issue of temporary housing and its impact on their budgets. It was a well-attended event, with a good deal of cross-party agreement. However, I was a little disappointed not to see a Minister there to talk to those council leaders.

Eastbourne is spending 48% of its budget on temporary housing. That is not sustainable. Even in Shropshire, which cannot be counted as one of the councils with the most critical issue of temporary housing, we have seen the numbers of those in temporary housing double since 2018. It is important that the Government grasp this issue of social housing—housing for social rent—because people are living in temporary accommodation that is often unsuitable, inadequate, and not anywhere that any of us would be satisfied to live in. The problem could be solved by investing in social housing. We have a plan to deliver 150,000 social houses a year by the end of the next Parliament. To put that into context, it would save, according to the House of Commons Library, £11 billion a year in housing benefit, which currently ends up in the hands of private landlords. Therefore, it makes economic sense to solve this problem, and I urge the Minister to consider that.

I am aware that I have repeated some of the points that other Members have made. Rural councils are struggling to meet the needs of an ageing population and the increased costs of delivering those services. They are struggling to plan not only with this single-year settlement, but with the fact that there is no certainty about what happens after next year. Shropshire Council is trying to save £50 million this year. That means £1 million of cuts every week to services that people have paid more for, and the council does not know what it will cut next year. That is the reality. Dipping into reserves, using some of its capital budget for revenue, or selling off some of its assets are one-stop solutions and do not solve the ongoing structural deficit into the years ahead. Therefore, once a council has sold the library and spent that money on adult social care, what does it do the following year? There is no library left to sell. It is so important that we do not plug these gaps with short-term fixes. We must address the structural problem affecting our councils.

In my meeting with the council leader, I was told that even after a 30% increase in council tax in Shropshire to plug the gap, people would still see a cut in services. Clearly, that is unsustainable and unacceptable.

Let me return to this point about the difference between rural and urban councils. The Rural Services Network has said that urban councils get 38% more than rural ones. However, we should not be having an argument about robbing Peter to pay Paul, because those urban councils are in crisis as well. We need to look at the overall cost of delivering services, and find a solution to deal with the fundamental drivers of increased costs.

I know that the Minister has been a councillor, as have many Members. Regardless of their political party, no councillor has got themselves elected and put themselves on the frontline in order to charge their own residents more and deliver less. We should be considerate of individuals in that situation, and address the fundamental drivers of the crisis affecting councils led by all parties and in all parts of the country. To reiterate, the issues are social care, children with special educational needs and disabilities, and housing. I urge the Minister to work with his colleagues in the relevant Departments to come up with long-term fundamental reform in those areas to solve this crisis.

--- Later in debate ---

[Chris Loder]

I thank the hon. Lady for giving way. I appreciate the point she makes and agree with much of what she says. I just wanted to briefly say—

[Helen Morgan]

On a point of order, Mr Deputy Speaker. I believe my hon. Friend had finished her speech. She was not accepting an intervention.

[Mr Deputy Speaker (Sir Roger Gale)]

Are we saying that the hon. Lady had sat down?

Leasehold and Freehold Reform Bill

Helen Morgan Excerpts

2nd reading
Monday 11th December 2023 Commons Chamber

[Helen Morgan (North Shropshire) (LD)]

I have mentioned before that Liberals have been campaigning to end leasehold since the days of Lloyd George, so I am pleased to see this piece of legislation finally being debated in the dying days of this Parliament. I hope that there is the time left to pass it and see meaningful change for the many leaseholders—leaseholds comprise 20% of the housing stock in England—who are boxed in by exorbitant management charges and uncapped ground rents.

The content of the Bill is welcome, and the Liberal Democrats will not oppose it on Second Reading, but, like other Members, we have significant concerns about the omissions from it. First, the Bill does not actually ban leasehold. Perhaps more importantly, it does not ban the creation of new leasehold flats. I do not grasp the logic of arguing that leasehold is outdated and unsuitable for the modern housing market, while allowing 70%—the vast majority—of leasehold arrangements to go ahead.

The Liberal Democrats support the comments made recently in The Guardian by the shadow Minister, the hon. Member for Greenwich and Woolwich (Matthew Pennycook), that

“commonhold should be the new default tenure”

for all flats, and that it should be easier for leaseholders to collectively purchase their freehold should they wish. I also agree with several other Members that giving leaseholders first refusal when the freehold is sold is a good idea. It seems to me that without those more radical measures, the Bill is less leasehold reform and more leasehold tinkering.

I think that we all agree with the Secretary of State that this is a feudal system that needs radical overhaul, and I am not sure why the Bill does not go further to achieve that. I have been lobbied, and I have some sympathy for the argument that there is a need to ensure that there is a clear line of responsibility, and indeed liability, for building maintenance and safety in large blocks of flats, but most other countries—in fact, all countries other than Australia—have managed to achieve that without reliance on the leasehold model. Indeed, our recent experience regarding the safety of large blocks of flats, with the cladding scandal, suggests that in many instances the leasehold model has demonstrably failed to provide it. We probably all agree on that point.

I am also confused about why the Bill omits to introduce professionalisation in the management of leasehold buildings. The British Property Federation has said that

“the lack of any provision to introduce competency standards or regulation to our sector is a missed opportunity.”

Given the experience of many leaseholders over the cladding scandal, and the welcome professionalisation of the social housing sector, I hope that the Government recognise the importance of ensuring that management is professionalised and will seek to introduce such measures in Committee. I wonder whether the Minister would commit to that in his closing remarks.

In my North Shropshire constituency we do not have a large number of flats, but we have been plagued to some extent by new housing developments in which the housing is freehold but shared areas, services and essential infrastructure are managed by the original developer. As we all know, those are referred to as fleeceholds, and since being elected I have told a number of horror stories regarding such arrangements, both in this Chamber and in Westminster Hall. The provisions in the Bill that allow the right to challenge charges, provide for greater transparency of information, and relate to the quality of work and an associated system of civil penalties, are a welcome step in the right direction, but I wonder whether I could push the Government to go further in that area.

The tenants of such developments pay both their council tax and an estate management charge, yet they often receive a far worse service than those who live in adopted developments and are subject only to council tax. The hon. Member for Dartford (Gareth Johnson) laid out some of the issues in his excellent speech, so I will not go into too much detail, but I urge the Minister to consider ending the practice of shared ownership of public spaces for the vast majority of new developments. They have the commercial substance of a leasehold, and I would like to see a presumption that the shared areas around new developments are almost always adopted by the local authority where the development is standard in nature. Where there is no good reason for that not to happen, homeowners on those developments should have their rights clearly set out so that the matter can be settled quickly in court.

I ask the Minister to consider further the specific circumstances where assets such as sewage pumping equipment or a ground source heat pump are shared by everyone on the estate. I am grateful to him for listening to my concerns prior to the debate. Freeholders using such equipment are dependent on its being installed and maintained to a high standard, but the experience of my constituents is that conveyancing solicitors do not alert buyers to the risks involved in this type of structure, and that the ownership structure can be opaque and almost impossible to challenge. I have one development in which the developer retained the ground source heat pump to be used by the rest of the houses in a separate company. He charges the full cost of running that pump to the residents but keeps the renewable heat incentive payments to himself, making a huge profit in the process. The freeholders’ only route of redress is through the courts. Because of the opaque management structure, it is not clear that they will win, and they do not really have the resources to commit to those legal proceedings.

It is not uncommon in rural places such as North Shropshire for a new development to use a shared septic tank rather than be connected to the mains sewer. If the tank has been installed to a poor standard, the costs of rectification are charged to the freeholders once they move in. Those are costs that they would not have anticipated when they bought the property. I would welcome greater clarity over who is responsible for ensuring that such shared assets are fit for purpose before the freehold houses are sold for habitation. Currently, such assets and services are outside the building control regime. That means that if someone gets a completion certificate on their house, which might have been properly constructed, but their sewage system is not fit for purpose, they will still have a valid building control certificate, and will be none the wiser when they buy the property.

I ask the Minister to consider whether further protections can be put in place, such as ensuring that inspections of those assets are included as part of the building control sign-off, ensuring that reserve funds are being collected and appropriately ringfenced through reasonable service charges throughout the life of such assets, and allowing freeholders to take joint ownership of the assets for a nominal fee if they wish to do so. A right to manage would be so welcome for residents trapped in such situations.

Will the Minister also expand on the issue of enforcement? The additional rights afforded to leaseholders and those paying estate management charges will be effective only if there is an affordable way for leaseholders and fleeceholders to ensure that they can be enforced. We all have experience of freeholders simply failing to respond to correspondence, or requiring their tenants to take them to court in a highly unaffordable process, often charging the costs of that court process to leaseholders. Enforcement is therefore not really achievable at the moment, but it is so important to ensure that those revenue streams are effectively squeezed for freeholders.

The Bill is a small step in the right direction, but so much more could be done to end this outdated form of tenure. It was 1909 when Lloyd George described leasehold as “not business, but blackmail”. It is high time that we grasped the nettle and ended it.

Oral Answers to Questions

Helen Morgan Excerpts

Monday 4th December 2023 Commons Chamber

[Jacob Young]

The right hon. Gentleman and I have had numerous conversations to that effect. Northern Ireland has benefited from £120 million in rounds 1 and 2 of the levelling-up fund but, in the context of growing pressure on Northern Ireland budgets, it is right that the UK Government should consider their approach to the funding available for Northern Ireland in this round. In LUF3, £30 million has been reserved for Northern Ireland and, as part of our commitment to levelling up, we will work with the restored Executive to find the best approach to supporting people in Northern Ireland. I again confirm to the right hon. Gentleman that I will work with him and others, once the Executive are back up and running, to see how we can best level up his community.

[Helen Morgan (North Shropshire) (LD)]

Whitchurch in my constituency has not received any levelling-up funding, whether from the levelling-up fund itself, the towns fund or the future high streets fund. Now it has found itself without a civic centre because of dangerous reinforced autoclaved aerated concrete, so it has lost its library, registry office and driving test centre, which was soon to be reopened following a long campaign by myself and others. Will the Minister meet me to work out what we can do to put that important building back into the heart of Whitchurch?

[Jacob Young]

I would be happy to meet the hon. Member.

Renters (Reform) Bill (Eighth sitting)

Helen Morgan Excerpts

Committee stage
Thursday 23rd November 2023 Public Bill Committees

[Jacob Young]

I shall write to the hon. Gentleman on that point and on the other questions that he raised.

Question put and negatived.

Clause 9 accordingly disagreed to.

Clause 10

Other duties of landlords and former landlords

[Helen Morgan (North Shropshire) (LD)]

I beg to move amendment 132, in clause 10, page 13, line 11, leave out “three” and insert “six”.

This amendment would increase the time which must elapse between a landlord taking ownership of a property for the purposes of them or their family occupying it and making the property available to rent from three months to six months.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 140, in clause 10, page 13, line 11, leave out “three” and insert “12”.

Amendments 140 and 141 would prohibit a landlord from reletting or remarketing a property within 12 months of obtaining possession on the ground for occupation or selling; and from authorising a letting agent to market the property within that period.

Amendment 134, in clause 10, page 13, line 13, after “tenancy” insert

“or on a short-term let or holiday let”.

This amendment would clarify that a landlord cannot let a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.

Amendment 135, in clause 10, page 13, line 14, at end insert

“or on a short-term let or holiday let”.

This amendment would clarify that a landlord cannot market a property as a short-term or holiday let for at least three months after taking ownership of the property for the purposes of them or their family occupying it.

Amendment 133, in clause 10, page 13, line 19, leave out “three” and insert “six”.

This amendment would increase the time which must elapse between a landlord taking ownership of a property for the purposes of them or their family occupying it and the landlord authorising a letting agent to make the property available to rent from three months to six months.

Amendment 141, in clause 10, page 13, line 19, leave out “three” and insert “12”.

Amendments 140 and 141 would prohibit a landlord from reletting or remarketing a property within 12 months of obtaining possession on the ground for occupation or selling; and from authorising a letting agent to market the property within that period.

Amendment 142, in clause 10, page 13, line 27, leave out paragraph (b) and insert—

“(b) the tenant either surrenders the tenancy without an order for possession being made or delivers up possession of the dwelling house under the terms of an order for possession.”

This amendment would extend the prohibitions on a landlord reletting or remarketing a property, and from authorising a letting agent to market the property, for which possession has been obtained on the Ground for occupation or selling by court order.

Clause stand part.

Government new clause 4—Other duties.

Government new clause 5—Landlords acting through others.

[Helen Morgan]

Once again, I draw the Committee’s attention to my entry in the Register of Members’ Financial Interests, on which there are two jointly owned properties: a residential property and a holiday let.

During our evidence sessions, we heard that experience in Scotland has shown that grounds 1 and 1A are open to abuse by landlords who are simply looking to re-market their property either at a higher rent or to a different tenant who will not complain about serious defects in the property. We heard about a pretty horrifying case in which a rat and maggot-infested property was simply re-marketed three months later. Clearly, the time in which the property could not be re-marketed was not enough of a deterrent to prevent abuse of such a clause. Amendments 132 and 133 therefore seek to extend from three to six months the period before which a property can be re-marketed.

In our debates over the past couple of days, I have spoken at length about the need to ensure the maintenance of balance between tenants and landlords, so that landlords are not driven from the market, which would exacerbate the chronic shortage of rental property in the whole UK and the decline in the size of the private rented sector in rural parts. I do not think that these amendments would have an impact on that balance. Any landlord who is seeking repossession under ground 1 or 1A and is acting in good faith has no intention of re-marketing the property at the point at which they seek repossession. Extending the period beyond which it can be re-marketed should not influence their decision in any way.

We understand that people’s circumstances can change, sometimes very suddenly. I think six months is a reasonable length of time both to provide a deterrent to abuse of grounds 1 and 1A and to provide fairness for landlords who have acted in good faith but have suffered an unexpected change in circumstances. I would be grateful if the Minister commented on the steps needed to prevent the recurrence of the situation in Scotland that we heard about and, ultimately, to support the lengthening of the period.

Amendments 134 and 135 seek to address the problem facing many tourist areas that properties for private rent are being flipped into holiday lets or Airbnb-style holiday homes. Members of all parties who represent tourist hotspots have raised the issue in the main Chamber, and there is broad consensus that the over-supply of holiday accommodation is having a hugely detrimental effect on those areas.

There needs to be some holiday accommodation, but the balance of holiday and private rented sector accommodation is very important for those areas, because over-supply of holiday accommodation hollows out communities. It has led to a situation in which the workers needed for the tourist industry to thrive have nowhere to live, so hotels and restaurants are unable to operate at full capacity. That is bad for the local economy, as well as for people who cannot find anywhere to live in the area.

Meanwhile, in rural areas, the private rented sector is shrinking rapidly. Local families and people working in essential services, such as care workers, teachers and nurses, are being driven away. The sector is completely out of balance. My understanding of the legislation is that landlords seeking repossession under ground 1 or 1A must not re-market the property as a residential let within a three-month period; I would prefer six months. There is no provision for holiday let-style marketing, because those properties do not require tenancy agreements.

My amendments recognise that problem by adding holiday letting to the three-month, or ideally six-month, moratorium on re-marketing once ground 1 or 1A has been used to regain possession. I think that that is a pretty uncontroversial addition to the Bill; I very much hope that Government Members support me when I press amendments 134 and 135 to a vote.

[Matthew Pennycook]

I rise to speak to amendments 140 to 142. It is a pleasure to follow the hon. Member for North Shropshire. We agree fully with the spirit behind amendments 132 to amendments 135, and we will support the hon. Lady when she presses either amendment 134 or amendment 135, regarding short-term lets, to a vote. They highlight a valid concern.

As we made clear during an earlier debate on mandatory possession grounds 1 and 1A when considering clause 3, we believe that there is a clear risk that these de facto no-fault grounds for eviction could be abused in several ways by unscrupulous landlords. As a result, we are convinced of the need to amend the Bill to provide tenants with greater protection against their misuse. However, we do not believe that the hon. Lady’s proposal to extend the no-let provisions in clause 10 from three to six months for both standard periodic and short-term lets is sufficient, for reasons I will go on to explain.

We are once again considering mandatory possession grounds 1 and 1A because clause 10 would insert proposed new section 16E into the 1988 Act, prohibiting certain actions by landlords or former landlords, including re-letting or re-marketing a property or authorising an agent to market the property within three months of obtaining possession on those grounds.

We take no issue with the prohibitions that the clause provides for. It is obviously right that the Bill seeks to prevent landlords letting a fixed-term tenancy; serving an incorrect form of possession notice; failing to give prior notice where required; specifying a ground for possession that the landlord is not entitled to use; and issuing a notice for possession proceedings within the proposed six-month protected period that applies to grounds 1, 1A and 6. We also welcome the clause’s explicit prohibition of the re-letting or re-marketing of a property obtained by means of issuing a ground 1 or 1A notice, and the fact that clause 11 provides for financial penalties and offences for a breach of that prohibition.

As I remarked to the Minister in a previous debate, the fact that the Government have introduced that prohibition highlights that they clearly accept that amended ground 1 and new ground 1A could be used as a form of section 21 by the back door. However, we are absolutely convinced that a three-month no-let period is simply not sufficient to deter and prevent abuse of the kind we fear will occur if the two possession grounds in question remain unchanged. We take that view because of our understanding of the English rental market.

Three months of lost income, which is what any unscrupulous landlord who deliberately abuses mandatory possession grounds 1 and 1A in order to evict a tenant will incur, may act as a significant disincentive for some buy-to-let landlords, particularly those with highly geared large portfolios who have seen their rental yields reduced by rising interest rates and the restriction of mortgage interest tax relief as a result of tax changes under section 24 of the Finance Act 2015.

However, a significant proportion of landlords do not have a mortgage; they own their property outright. A recent survey carried out by Shelter suggested that well over half of all landlords come under that category. For landlords who are mortgage-free or have a mortgage but can absorb extended void periods, a three-month no-let prohibition, which could ultimately see them losing only one month of rental income if the tenant serves out the two-month minimum notice period that applies to grounds 1 and 1A, is not a particularly strong deterrent against abuse.

We believe that the no-let prohibition provided for by clause 10 in respect of mandatory possession grounds 1 and 1A must increase from three months to 12 months. That would ensure, taking into account the full minimum notice period, that any landlord not legitimately using the landlord circumstances grounds to occupy or sell the property would lose 10 months of rent—a financial penalty that we think would be sufficient to deter and prevent such misuse. Amendments 140 and 141 would provide for that 12-month no-let period. I urge the Minister to reflect further on the issue and to accept the amendments.

Amendment 142 seeks to address a distinct but related issue with the no-let prohibitions provided for by clause 10 in relation to grounds 1 and 1A. Proposed new section 16E(5) provides that the prohibition is applicable only if the tenant surrenders the property as a result of a notice having been served, without an order for possession being made. To put it another way, the proposed three-month no-let ban will be applicable only in instances where a tenant has left a property voluntarily without court proceedings, not where a court has issued an order. That is genuinely inexplicable, from our point of view.

Is it the Government’s view that where a ground 1 or 1A notice is served and the tenant wishes to contest it, the no-let prohibited period would, in effect, run throughout the possession proceedings, so that if they take three months or more, the period will have been deemed to have already expired prior to any order being issued? Is that the reason? If so, we would welcome clarification. Otherwise, we cannot understand why the prohibition does not apply where a court has issued an order. The Minister must provide a detailed explanation of the rationale behind the Government’s decision, because we cannot understand why it is equitable to apply the prohibition only to instances where a tenant has left a property without court proceedings, vis-à-vis having challenged them by taking the matter to court.

We are also concerned that the decision to do so will prevent tenants themselves from seeking redress in instances where they have good reason to believe that grounds 1 and 1A have been misused. It stands to reason that tenants who have challenged their eviction in court are inherently more likely to suspect that they are being wrongfully evicted and to be willing and able to pursue their landlord if they are abusing the grounds subsequent to losing their home.

To reiterate a point I made in an earlier debate, it is almost certain that a minority of unscrupulous landlords will abuse grounds 1 and 1A to unfairly evict tenants they perceive as problematic, and will then proceed to re-let those properties in short order. As things stand, if and when they do so the courts will be able to do nothing. Indeed, how will they even know what happened subsequent to a ground 1 or 1A possession case? The obvious mechanism to ensure that grounds 1 and 1A are used legitimately in each instance is to require landlords to evidence and verify prior and subsequent to a notice being issued, but the Government rejected our amendments 138 and 139 out of hand.

--- Later in debate ---

[Matthew Pennycook]

No, I genuinely do not. In a case where a tenant has felt so strongly that they are potentially being evicted unlawfully that they have taken the matter all the way to the court, it is right that the no-let period should apply from the point that the award is granted. Again, that may be a point of genuine disagreement, but we will press amendment 142 to a vote.

[Helen Morgan]

I thank the hon. Member for Greenwich and Woolwich for his comments. I am in general agreement with his point about needing to extend the period beyond which a property can be re-marketed, although my view is that 12 months is excessive. If a landlord’s circumstances have changed—for example, if they repossess their house to sell it because they are facing financial hardship but are unable to sell and need to re-let it—12 months is punitive.

Renters (Reform) Bill (Seventh sitting)

Helen Morgan Excerpts

Committee stage
Thursday 23rd November 2023 Public Bill Committees

Division 7

Ayes: 7

---

Labour: 6
Liberal Democrat: 1

Noes: 8

---

Conservative: 8

[Helen Morgan (North Shropshire) (LD)]

I beg to move amendment 130, in schedule 1, page 75, line 4, leave out paragraph 23.

This amendment would maintain the existing definition of anti-social behaviour as being conduct causing or likely to cause a nuisance or annoyance, rather than being defined as behaviour “capable of causing” nuisance or annoyance.

[The Chair]

With this it will be convenient to discuss the following:

Amendment 131, in schedule 1, page 75, line 5, at end insert—

“23A In Ground 14, after ‘residing in’ insert ‘regularly’”.

This amendment would clarify that visitors to a property displaying anti-social behaviour must be regular visitors, so that Ground 14 cannot be used to penalise tenants for the behaviour of a one-off visitor.

Amendment 158, in schedule 1, page 75, line 5, at end insert—

“23A In Ground 14, at start of line 1 insert—‘Where the landlord seeking possession has had regard to any relevant guidance made by the Secretary of State and’”.

This amendment would require landlords seeking possession on Ground 14 to have regard to any guidance produced by the government on what constitutes anti-social behaviour.

Government new clause 1—Factors for court considering granting possession order for anti-social behaviour.

New clause 55—Duty to publish guidance on what constitutes anti-social behaviour—

“(1) The Secretary of State must, within 180 days of the day on which this Act is passed, publish guidance defining anti-social behaviour for the purposes of Ground 14 in Schedule 2 to the Housing Act 1988.

(2) Guidance under subsection (1) must define how anti-social behaviour differs from nuisance and annoyance caused by incidents of domestic violence, mental health crises, and behaviour resulting from adults or children with autism spectrum disorders or learning difficulties.”

This new clause would place a duty on the Government to produce guidance on what constitutes anti-social behaviour for the purpose of assisting landlords to determine when Ground 14 conditions have been fulfilled.

[Helen Morgan]

It is a pleasure to see you in the Chair, Mr Paisley. I draw Members’ attention to my entry in the Register of Members’ Financial Interests.

I tabled these amendments to reflect my general concerns about the potential for abuse of ground 14, the discretionary ground for eviction on the basis of antisocial behaviour. We heard, both on Second Reading and in last week’s evidence sessions, about concerns that ground 14 could be used to evict a tenant who is a victim of domestic abuse or is suffering with mental ill health or a physical condition that could cause annoyance to surrounding neighbours.

We also heard last week from Liz Davies KC, in our fourth sitting, that the threshold is being lowered by a very small margin. She said that it was difficult to see circumstances in which behaviour would not meet the threshold of “likely to cause”, but would meet the threshold of “capable of causing”. She outlined that, in her experience, courts use the existing discretionary ground wisely, to rightly allow possession where there is a flagrant problem with antisocial behaviour. We have no reason to believe that courts will not continue to do so. I am therefore a bit perplexed as to why the Government have tried to slightly lower the bar for eviction. Further to our recent discussions of other amendments, I am concerned that it is to allow landlords to exploit the clause as a route to an easier eviction.

Amendment 130 would maintain the existing definition, which, as we heard last week, should be sufficient for landlords to evict where antisocial behaviour is a genuine problem. Unless the Minister can provide some reassurance that the changed terms will not lead to an increased number of evictions, I intend to press amendment 130 to a vote.

Amendment 131 reinforces that point. Literally interpreted, the legislation does not specify whether or not a visitor exhibiting antisocial behaviour is regularly attending the property. Clearly tenants should be protected from eviction where there has been a single or very intermittent problem. Indeed, a regular antisocial visitor may not be welcome at the property; they may be regularly attending to intimidate or cause distress to the tenant.

I have a piece of casework in which the tenants of a property, through no fault of their own, have been subjected to intimidation and verbal abuse by a member of the community who lives elsewhere. I do not doubt that that causes nuisance and annoyance for other residents, but it would be grossly unfair to evict those tenants. In all likelihood, it would not resolve the problem in the long term either; it would just shift it to a different place in the same town.

I will not press amendment 131 to a vote, because ground 14 is discretionary and we should trust the judgment of the court as to whether an eviction is appropriate in each individual case. However, as we have heard of instances where unreasonable evictions have taken place, I would welcome an assurance from the Government that there will be safeguards and guidance in place to prevent the innocent from being evicted by an unscrupulous landlord under ground 14.

[Matthew Pennycook]

I rise to speak to amendment 158 and new clause 55, which stand in my name and in the name of my hon. Friends.

It is a pleasure to follow the hon. Member for North Shropshire. Both her amendments to schedule 1, in relation to the proposed revision of existing ground 14, are welcome. Indeed, we tabled an identical amendment to her amendment 130, but it was not selected, on the basis that it was an exact duplicate—that is a lesson for the whole Committee on the importance of tabling amendments in a timely fashion. If the hon. Lady presses her amendment 130 to a vote, we will certainly support it.

As the hon. Lady set out, paragraph 23 of schedule 1 to the Bill will widen ground 14 of schedule 2 to the Housing Act 1988 to include behaviours

“capable of causing nuisance or annoyance”,

as opposed to the existing language, which merely refers to

“likely to cause nuisance or annoyance”.

We are pleased that the Government are not proposing to make existing ground 14 mandatory, as some had feared prior to the publication of the Bill earlier this year. The court will therefore still have discretion to judge whether it is reasonable and proportionate to evict a tenant for the behaviour in question.

--- Later in debate ---

[Matthew Pennycook]

The Minister must have been listening to a different balance of the totality of the evidence from what I heard. I heard significant criticism of this proposed change by the Government. He still has not given me an example of the types of behaviour that would not fall under the existing definition, but that would be covered by the expanded one. I think that is because the change is driven more by the politics of what is required to get the Bill through than by any empirical evidence that such a change is required to deal with instances in which landlords cannot recover their properties from tenants who cause antisocial behaviour.

[Helen Morgan]

We heard extensively from the representative of Grainger plc about antisocial behaviour. I felt that her evidence demonstrated clearly that the existing grounds were adequate for tenants to be evicted under such circumstances. Does the hon. Gentleman agree?

[Matthew Pennycook]

I think that is a worthwhile intervention. I heard the evidence from Grainger and others highlighting concerns about this ground, so the Government are just wrong if their position is that expert opinion out in the country is that there is no problem whatever with the proposed change to ground 14.

We agree with the hon. Member for North Shropshire that the Government should remove paragraph 23 of schedule 1 and leave ground 14 with the current “likely to cause” wording. However, if they resist doing so, we urge the Minister to at least consider clarifying, as I have asked him to, what kind of behaviour is and is not capable of causing nuisance or annoyance so that county courts can better exercise their discretion about whether eviction is reasonable and proportionate in any given circumstance once the Bill has come into force. Let us be clear: the Government’s eleventh-hour new clause 1 does not do that. Indeed, it is not clear what on earth they are trying to achieve with it. As with so much of what the Government have tabled fairly late, we suspect it is more a product of rushed thinking than anything else.

New clause 1 would make it a requirement for the court to consider, in particular, the effects of antisocial behaviour on other tenants of the same house in multiple occupation, but that is already the case. Judges already have to consider the impact of behaviours that could be categorised as antisocial on others, so why do the Government feel the need to specify that they are required to do so via this amendment, purely in relation to HMOs? I would be grateful if the Minister could provide us with a reason. Will he also explain why the Government do not believe this provision needs to cover, say, a house under part 3 of the Housing Act 2004 or a rented property that is not covered by parts 2 or 3 of that Act?

The new clause also provides for the court to take into account as a factor in its determination

“whether the person against whom the order is sought has co-operated with any attempt by the landlord to encourage the conduct to cease.”

Again, when considering antisocial behaviour, the courts can already consider, and frequently do, what efforts the tenant has made to co-operate—for example, what the tenant’s response has been when a landlord has tried to contact them to press them to bring the offending behaviour to an end.

Of course, that presumes that the landlord has tried to contact the tenant, but that highlights a more fundamental problem with the new clause. At present, there is no duty on landlords to prevent or take steps to stop antisocial behaviour on the part of their tenants. I am thinking of the extensive case law reviewed in the recent Poole Borough Council v. GN judgment. Is the new clause an attempt to impose such a requirement surreptitiously? If it is, I wonder what the National Residential Landlords Association and other landlord organisations will have to say about it. The problem is that it is not clear at all, and we fear that fact exposes the Government to the possibility of litigation.

If the new clause is not an attempt to impose a requirement for landlords to take steps to stop antisocial behaviour on the part of their tenants, should we instead take it to imply that landlords now have to at least reasonably co-operate with a tenant to limit antisocial behaviour? If it does not imply that, what is the point of it? If landlords do not have to do anything to encourage antisocial behaviour to cease or do anything about it, whether a tenant can “co-operate” is reliant on the whim of the landlord in question and whether they decide to ask the tenant to stop.

Put simply, we question whether the new clause will have any practical effect, and we would appreciate it if the Minister could explain the thinking behind it, particularly because, like the many other last-minute Government amendments to the Bill, there is no detail about it in the explanatory notes. Even if the Minister just reads his box notes into the record, I would welcome the clarification. That would at least give us a sense of the Government’s thinking.

Leaving aside the deficiencies of new clause 1, we remain of the view that if the Government are intent on widening ground 14 to cover behaviour likely to cause nuisance or annoyance, they must at least clarify what kind of behaviours they believe will be included in that definition. New clause 55 would place a duty on the Government to produce detailed guidance on precisely what constitutes antisocial behaviour for the purpose of assisting landlords and the courts to determine when ground 14 conditions have been fulfilled under the revised terms that the Government are proposing. Specifically, it requires the said guidance to define how antisocial behaviour differs from nuisance and annoyance caused by incidents of domestic violence, mental health crisis and behaviour resulting from adults or children with autism spectrum disorders or learning difficulties. Amendment 158 would, in turn, require landlords seeking possession on the basis of amended ground 14 to have regard to the guidance that the Government would be obliged to produce.

Taken together, we believe that new clause 55 and amendment 158 would at least provide the extremely vulnerable tenants we fear might fall foul of amended ground 14 with a further degree of protection beyond the discretion that the courts will still be able to apply. I look forward to the Minister’s response.

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[Matthew Pennycook]

I will say two things to the Minister, because I think that was a helpful answer, although his officials are going to be doing a lot of writing over the coming days and weeks. It was helpful in two ways: it is welcome to hear an assurance that we expect guidance before these measures come into force, and that the working group has been set up to that end.

This is where the private rented sector is very different from the social rented sector, where registered providers operate. Registered providers often have trained antisocial behaviour teams who are equipped and trained with the tools—injunction powers and others—to remedy antisocial behaviour before eviction action has to take place. They are trained to distinguish between antisocial behaviour and things such as the domestic violence instances that we are worried about, and to take safeguarding action to protect tenants from either eviction or criminalisation. The private rented sector has none of that. I do very much think we need guidance in this area, so I welcome the Minister’s clarification in that regard. On that basis, I am happy to not to push new clause 55 to a vote.

However, what I am still concerned about, and why we will support the hon. Member for North Shropshire if she pushes her amendment to a vote, is that in some ways it does not matter what the guidance says if the definition of what constitutes antisocial behaviour is very broad and the change from “likely” to “capable” is made. That still concerns us a great deal. The Minister has not given me an example—I only want one—of a kind of behaviour that would be “capable of causing” antisocial behaviour without falling under the existing “likely to”. I do not think he has any such behaviour in mind; I do not think the officials have any idea, either.

I think the Minister gave the game away, intentionally or otherwise, that this power is to be used to make it easier for landlords to threaten tenants in the first instance, and most will not go to court, and then to be able to evict tenants. As he said, the behaviour in question does not have to have caused or be likely to have caused antisocial behaviour in any given instance. It will enable an argument on the basis that there is a pattern of behaviour that now meets the reduced threshold.

None of the evidence I listened to last week suggested that that was necessary. I remember—one good example—that Timothy Douglas from Propertymark could not understand the difference between “likely” to cause and “capable” of causing, and the need for the change in this instance. He did call for guidance—absolutely. However, none of the evidence I heard supported the change, apart from evidence from some landlords, who, of course, are going to say that they welcome a widened power. They do not have to deal with the consequences. It is local authorities and society that will have to do that.

I know this is not the Minister’s brief, but he really should know whether tenants, if evicted under these grounds, will be made intentionally homeless. I suggest that it is almost certain that they will be. We are talking about an easier way to make people homeless, and we will all pick up the costs in various ways. This will impact some incredibly vulnerable tenants. We therefore think that this measure needs to be removed from the Bill. Again, we will certainly return to the issue at a later stage.

[Helen Morgan]

I welcome the support from Opposition Members, who, I think, have summed up the issue very well. There is an increased threat of eviction even if these cases are not taken to court, because the threat of having notice served in the first place is very frightening for people who do not necessarily have the legal ability to follow that through and oppose it.

[Jacob Young]

I take the hon. Lady’s point fully on board. I inadvertently forgot to mention during my speech that tenants will be given full information on their rights when notice is served. I hope that addresses her concerns about the threat being enough to push someone out. People will know their rights and whether or not they can challenge this in a court.

[Helen Morgan]

I welcome the Minister’s intervention. It is sometimes hard for us to put ourselves in the position of the tenant who may not have the professional skills of some of us in this room. The threat of being taken to court is a very serious one, even if someone has been advised of their rights. It is an intimidating place, and an intimidating process to go through.

[Lloyd Russell-Moyle]

The timetable referred to is two weeks. We all know about the crisis in people being able to get a lawyer, seek advice or even get an appointment at a citizens advice bureau: it can often take longer than two weeks. By the time a person has got advice or legal support, they will be out, will they not? Is that not a key problem with the provision?

[Helen Morgan]

I thank the hon. Gentleman for his well-made point. In Shropshire, citizens advice bureaux sometimes refer people to their MP’s office because they do not have the capacity to deal with the number of issues that are brought to them. The point about the threat is an extremely important one that we need to bear in mind: it will have a strong adverse effect on tenants who are put in that position. The hon. Member for Westminster North made the excellent point that we are dealing with people who would otherwise be in social housing, but they are not in social housing because we do not have an adequate social housing stock. With the best will in the world, a lot of landlords in the private sector—particularly when it is not their main business or primary job, but they happen to rent out a property—do not have the skills or capacity to deal with these things.

I welcome the Minister’s explanation that a working group will come up with detailed guidance. That is a positive step forward and is the reason why I will not press amendment 131 to a vote. However, I am concerned about his comment that the point of the expansion of the definition is to reduce the evidential level at which a landlord is allowed to serve notice. For that reason, I will press amendment 130 to a vote.

Question put, That the amendment be made.

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I am allowing the courts to consider what the local housing allowance increases might be. If a house was marketed at local housing allowance, and it was given particularly to people in receipt of universal credit or housing benefits, the courts could consider what a fair increase in local housing allowance would be for that tenant and property, bearing in mind that the landlord was happy for that property to be rented at local housing allowance initially.

[Helen Morgan]

I am interested in what the hon. Gentleman suggests, and I am broadly supportive of it. If we get this right, we should see a stable private rented sector where rents do not go up very much each year; they might fall in some local areas, depending on local circumstances. Does he envisage allowing rents to drop, or does he envisage them always going up by some kind of consumer price inflation-linked level?

[Lloyd Russell-Moyle]

That is an interesting question. In amendments 200 and 201, they would be linked to CPI or median local rents. Where that has been introduced in Belgium, two-thirds of landlords declined to increase rent at the rate of inflation, so it has not particularly caused a constant push to always increase.

In amendment 197, I am talking about a negotiation between the tenant and the landlord. If they do not agree, the tribunal can consider not just what the current market rate would be if the property were to be put on the market brand-new, but a number of other indicators, and come to a conclusion. It might well be that if market rents have decreased in an area, the tribunal would be able to come to that consideration; I am not forcing the tribunal, but allowing it to come to that consideration. Some of these amendments allow more flexibility, and I always think that flexibility in these issues is probably right. Amendment 197 also allows the tribunal to consider CPI and median income growth.

However, amendment 198 says that the tribunal might consider all those things, but even then it can never increase rent above CPI or median wages. It might well be that the tribunal wants it to go down, and it might find a different place, but there is a ceiling. Amendment 197 allows the tribunal to consider; amendment 198 puts a cap on what the tribunal can impose. Amendment 199 and new clause 66 give the Secretary of State the power, from time to time, to lay before Parliament statutory guidance or a statement outlining the consideration that courts should take into account in their rent deliberations the maximum amount by which they can increase it. I think that is the most flexible. It allows the Secretary of State, from time to time, to look at the wider market and be able to say, “It needs to be locally driven,” or, “It needs to be national indicator-driven.”

As I have already discussed, the market is changing, and there is not just one market throughout the UK. We would not necessarily have to find a single indicator that would work for everyone. We have development areas, areas where house prices have slumped and areas that are going through gentrification. We have properties that are increasing in value because of infrastructure inputs. If High Speed 2 was ever to happen, property prices might increase in parts of the north. If Labour gets in, perhaps we will see some actual improvements in rail and other infrastructure in the north of England, and that will help the market. Of course, we have had many promises that have never been delivered so far.