Selective Licensing of Houses (Additional Conditions) (England) Order 2015

Lord Beecham Excerpts

Monday 23rd March 2015 Grand Committee

[Lord Beecham (Lab)]

My Lords, while welcoming, in particular, the conditions set out in the draft order as being helpful to facilitate the successful operation of licensing schemes, I respectfully adopt the—critique is perhaps too strong a word—observations of the noble Lord, Lord Best, and my noble friend Lord McKenzie in relation to the matters to which they spoke.

I have had some experience of the selective licensing regime, as I campaigned strongly for one to be created in the ward that I represent. It has been pretty successful. When I tried to persuade the local authority to extend the scheme for another, discrete, part of the ward, at that time—I am going back four or five years—it was not feasible because the Government were concerned about the size. A size factor was required, although that is probably no longer the case.

I fear that the drafting of this order contains potential problems and I should like to address my remarks to those matters. For example, paragraph 3 requires that,

“the area contains a high proportion of properties in the private rented sector”.

What on earth does that mean? Have the Government produced any guidelines or guidance, preferably in conjunction with the Local Government Association—I declare an interest as an honorary vice-president of that organisation—about the proportions they are talking about?

One or two issues of that kind are contained in paragraph 4. For example, it refers to where,

“the local housing authority considers it would be appropriate for a significant number of the properties”.

What is a significant number? The local authorities could be in danger of challenge here unless there are, again, clear guidelines.

There is also the question of the character of, rather than the number of, properties. There could be a number of three or four-storey houses in an area alongside a number of semi-detached houses or whatever, and the number of properties might not tell the whole story of the number of people involved in the appropriate lettings. I am concerned about that aspect.

Paragraph 5 states:

“The second set of conditions are … that the area has recently experienced or is experiencing an influx of migration into it”.

I have two questions about that: what is meant by “recently” and what is meant by “migration”? Migration could take a number of forms. In common parlance it is people from overseas but in an area, to take an extreme example, an influx of people from Sunderland to Newcastle might be regarded as a somewhat questionable process of migration. I do not say that I share that view but there is a question about what is meant by migration in that context.

In paragraphs 6 and 7 there are references to “a high level”. In paragraph 6 the area must be,

“suffering from a high level of deprivation”,

and in paragraph 7(a),

“from high levels of crime”.

These are potentially justiciable issues and seem very vague. It would be helpful if the department—again, in conjunction with the LGA and possibly other consultees—were to consider guidelines in that respect.

There is a reference in paragraph 7(b) to criminal activity having an impact on other households and businesses in “the area”. Does that mean in the area of the licensing scheme or in the wider area? What happens in an area adjoining where there is a licensing scheme could well depend upon or be caused by the conditions in the licensing scheme area, although the impact might be outside. Would that be taken into account? It is not clear.

Finally, there is a significant issue which certainly affects Newcastle and many other places, and that is student accommodation. Large areas of my city and, I suspect, many others are now given over to student accommodation. That is often quite problematic. In fact, I would go so far as to say that it is very problematic in some areas. I am not sure whether, as an issue, that is implicitly incorporated within these conditions or whether it becomes a discrete factor in itself. My preference would be for the latter, but is the Minister able to say whether, to adopt the present order’s words, a high proportion of student residences in an area would be a factor that could justify a licensing scheme? If not, I encourage the Minister to take a look at that issue because it impinges quite significantly on what had hitherto been ordinary residential areas. I am talking not about purpose-built student accommodation but about the conversion of existing family accommodation into student accommodation. Sometimes they are HMOs and can be controlled in that sense, but very often they are not. It seems to be an increasing problem that is likely to increase further. If at all possible, it should be brought within the framework of the scheme.

Having said that, in general, I welcome the proposals. They should assist, but some of the issues that I and others have raised need to be addressed if we are going to make the best use of the possibility of deploying the scheme in the way that the Government wish.

[Lord Ahmad of Wimbledon]

My Lords, I thank all noble Lords who have taken part in this debate. They all speak from great experience of local government and I appreciate their constructive suggestions and questions. I shall seek to answer all of them, or at least most of them, as I work through my response.

The noble Lord, Lord Best, talked of the 20% reference point for the Secretary of State. I assure him that it is the Government’s view that this strikes a fair balance between ensuring that schemes are focused on areas where there is a problem and, as I said in my opening remarks, which he acknowledged, do not unfairly impact on good landlords and their tenants. I assure the noble Lord and the noble Lord, Lord McKenzie, who raised a similar point about whether this is centralising the proposition if approval is required, that all applications will be considered on a case-by-case basis. If a local authority produces evidence in support of its proposition, we would expect that application to be approved.

The noble Lord, Lord Best, said that only in exceptional circumstances could licensing be used in more than 20% of properties. As I have already said, it will be considered on a case-by-case basis. There may be cases where licensing of more than 20% of the borough would be considered appropriate. Such applications would be submitted to the Secretary of State. There is sometimes a sense that just because it is submitted to the Secretary of State the answer will be no but it would be looked at on a case-by-case basis on the evidence submitted.

The noble Lord, Lord Best, was concerned that landlords may be inclined to pass on costs to tenants. In areas of high demand, it is highly likely that rents will go up. We feel that, given the scarcity of accommodation, tenants will have no choice but to accept higher charges. There is a concern we are looking to address.

The noble Lord, Lord McKenzie, said there was concern about introducing licensing on a whim. As noble Lords are aware, councils must consult tenants, residents and landlords over a 10-week period before introducing any such licensing.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

I think it is as it says on the tin: can the scheme be practically applied? Each case that is presented will be among the evidence base supplied. My immediate response is: ultimately, is the scheme practical; can it work, in essence? I hope that with that response, the noble Lord and other noble Lords are assured, with the commitment that I give again that the 18-month review will attempt to address some of the concerns that have been raised. I have just received a note which states that the enforceable and practical element will also cover whether, for example, fees will cover the cost of any scheme.

[Lord Beecham]

My Lords, this is my last question of the noble Lord today—and probably the last thing that I will say for the duration of this Parliament, as he will be relieved to hear. I return to my question about student accommodation and whether the Government will take a particular look at that as an issue in the context of the whole area of selective licensing.

[Lord Ahmad of Wimbledon]

The noble Lord makes a valid point. In his question he also talked about crime, deprivation and migration. Areas with high numbers of students alone would not be covered; it would involve taking those other elements into account as well. However, I will reflect on his comments to see whether I can add anything more specific. I will hold him to the statement that this is the last question that he will raise not only today but in this Parliament.