Non-Domestic Rating (Lists) (No. 2) Bill

Debate between Lord Kennedy of Southwark and Baroness Thornhill

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Thursday 4th February 2021 Grand Committee

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, as this is my first contribution, I draw the attention of the Committee to my relevant registered interests: as a vice-president of the Local Government Association, chair of the Heart of Medway Housing Association and a non-executive director of MHS Homes Ltd.

Amendment 1 would put on the face of the Bill a new clause requiring the Secretary of State to publish a Statement setting out

“how the Valuation Office Agency and local authorities were consulted in relation to the provisions of this Act prior to its passage.”

A property’s rateable value, which business rates are based on, has been assessed independently of Ministers by the Valuation Office Agency since 1990. The Bill will, among other things, make a change to when the Valuation Office Agency must publish draft rateable values. The noble Lord, Lord Greenhalgh, has told us previously that this is to support the smooth transition of the revaluation. The publication of these draft rateable values will be aligned with the timing of decisions relating to the multipliers and transitional arrangements.

This is only a probing amendment and I am hopeful that the noble Lord will be able to set out for the Grand Committee exactly how what is asked for in the amendment has been done. If the agency and local authorities have not been consulted, can he tell us why not, and why the Government think that that is an acceptable course of action?

Amendment 6, in the names of the noble Baronesses, Lady Pinnock and Lady Thornhill, would insert a new clause into the Bill. I am very much in support of this new clause, as it would provide for an impact assessment of the timing of a rates revaluation. I am sure that we will get a full explanation of the amendment from the noble Baronesses.

There is of course a wider debate to be had about the whole question of business rates and their appropriateness as an element of local government funding. It is important to note that the Government have cut £15 billion from central government funding for local government in the last decade. The Covid-19 pandemic has had a catastrophic impact on local authority finances, with income falling and costs rising. The current lockdown, which is the right thing to do, will also have a serious impact. Here, the Government need to keep their promise to fully fund local authorities for the costs of the pandemic.

According to the Local Government Association, local councils in England will face a funding gap of more than £5 billion just to maintain services at current levels. But to respond to demand pressures and plug the existing funding gap, an additional £10 billion per year in funding will be needed by 2023-24. For those reasons and many others, which I am sure we will hear from the noble Baronesses, Lady Pinnock and Lady Thornhill, I support their amendment. I beg to move.

[Baroness Thornhill (LD) [V]]

My Lords, I, too, am a vice-president of the Local Government Association.

I wish to speak in favour of Amendment 6, which stands in my name and that of my noble friend Lady Pinnock, and to support Amendment 1 in the name of the noble Lord, Lord Kennedy of Southwark.

I am very aware that this is a narrowly focused Bill and that it has had broad support and been welcomed. However, it is significant that, despite that, several Members of your Lordships’ House have taken the opportunity to table amendments. I believe that that shows the depth of concern around the whole issue of business rates. The amount of interest shown in both this tightly drawn Bill and the Government’s consultation for their ongoing business rates review shows how important it is for the review to be both bold and radical.

It is also significant that all the amendments seek to hold the Government’s feet to the fire with regard to the various ongoing impacts of the Bill, be they on sports clubs, the high street or local government finance—hence, Amendment 6 stipulates a timeframe of six months. This is due to the fact that the instability and uncertainty provoked by the impact of Covid-19 are exacerbating issues that were already of significant concern—and we are not out of the woods yet.

Indeed, the amendment seeks to continue to draw your Lordships’ attention to the challenging situation regarding local council finances. The latest figures from the Local Government Association show that the financial impact of Covid-19 on local authorities is an estimated £9.7 billion for 2020-21, with a further £2.8 billion of lost income from council tax and business rates. However, it must be noted that these figures were reported before the lockdown and the spread of the new strain was known. This is a significantly different set of circumstances from when the 2020-21 funding package was last evaluated, and is part of the reason for continuing concern around council finances. I am sure it is appreciated by all noble Lords just how important business rates are to the individual finances of a local authority.

One reason for the amendment is to highlight the volatility of the tax base, which is so unpredictable at present. For example, the loss of office space to residential—a topic much discussed with the Minister in this House—is a trend that is likely to continue with inevitable loss of revenue. The Valuation Office Agency is currently negotiating appeals and challenges for offices, airports and factories under a material change of circumstances appeal, due to Covid-19. A rebate of up to 25% was mooted. The reduction in income could be substantial. If a rebate were forthcoming, would subsequent losses be repaid to local government in line with the recently announced tax income guarantee? Some 75% of losses will be guaranteed for 2020-21, but nothing has been said yet about 2021-22. Of course, local government must make up the other 25%.

The amount of money that councils have had to put aside for appeals is also significant, hence local government concerns around cutting down the window of time to appeal and getting the number of appeals reduced. The more certainty that we can add to the processes the better. To date, councils have had to divert £3 billion from services to appeals. A significant amount of money is also tied up in irrecoverable losses for both business rates and council tax. With debt recovery and enforcement activities understandably limited due to the pandemic, and with limits on activities and pressures on court time, councils’ ability to recover debts and secure income as they usually would, will be restricted. These are not usual times, and more businesses are likely to fail.

I use these points to illustrate one purpose of the amendment and the volatility of this important tax base. There is much instability in the system at present, which is being masked by the current, much-needed and much-valued reliefs offered to businesses from the Government. This could change significantly when the reliefs end; it could impact on local authority incomes, but we do not know when this will be. If the amendment is not accepted, could the Government at least agree to look closely at the impact once all reliefs have been suspended? This could provide vital evidence on which sectors are most impacted as well as on local councils’ finances.

Regarding Amendment 1, it was noted by several noble Lords at Second Reading that the VOA has been formally criticised as being cumbersome and difficult to deal with, and its valuations opaque and inconsistent. This is why I endorse what has been said by the noble Lord, Lord Kennedy of Southwark, and support his amendment and additional amendments tabled by my noble friends. In short, the amendment asks the Government how the pandemic that happening now will affect the revaluation in 2023, based on values at April 2021, which will not be looked at again until 2028.

Rough Sleeping

Debate between Lord Kennedy of Southwark and Baroness Thornhill

Thursday 27th February 2020 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, even if the Government’s figures truly reflected the scale of street homelessness, the situation would be horrifying. But the situation is even worse. Yesterday, an FoI obtained by the BBC showed that 28,000 people slept rough in the UK over the last 12 months, of whom nearly 25,000 were in England. This is five times the number recorded by the Government’s statistics, which blatantly hide the scale of the problem.

The Government have no basis to parade their own figures as anything resembling an accurate picture. In 2019, the Office for Statistics Regulation said that it expected the Government to plan for better statistics on rough sleeping. The recent defence that these statistics are only a good estimate brings into question why they were ever published. Can the Minister confirm that these government statistics have official statistics status approved by the UK Statistics Authority? If they do not, that is because they fail to meet official standards on trustworthiness, quality and public value. If they fail this test, they should never see the light of day. These figures are misleading and I would welcome an investigation into their accuracy. If the Minister is unable to confirm the status of these statistics today, could he write to me and place a copy of the letter in the Library?

In 2018, 726 people died homeless across England and Wales—the highest year-to-year increase since the ONS time series began. This is an emergency and requires emergency measures. The announcement of the £236 million and an urgent review to tackle rough sleeping is insufficient and shows that the Government are in denial of the problem. They have failed to properly address the issue over the past 10 years and must finally make it a priority, beginning with properly funding homelessness services. Such funding, in combination with supportive housing, has been cut by £1 billion a year, leading to 9,000 fewer hostel beds. Will the Minister tell the House what the Government will do to replace the beds that have been lost and provide new ones?

In recognition of the role local authorities can play, the Government must introduce a duty for councils, and proper funding with that, to deliver shelter and support, building on the emergency cold weather support that many already provide. The Government must, however, also look at why individuals and families become homeless in the first place. Many have found themselves on the streets after losing their privately rented accommodation—perhaps through extortionate rent increases or unliveable conditions, or through substance abuse. The Government must make renting affordable and give tenants the right to hold their landlords to account. There must also be recognition of the root factors that can trigger homelessness, be they substance abuse, domestic abuse, violence or mental health problems, so that support can again be offered to tackle these wider causes.

We can look back to the record of the Labour Government on homelessness and find that, by 2010, this had been virtually eliminated. Here we are back again, 10 years later, and it is back with a vengeance. Homelessness is not inevitable in a country as well-off and decent as ours, but the levels of rough sleeping under this Government have shamed us all. It is action, not words, that will put an end to this crisis; simply saying that rough sleeping is a priority for the Government is not good enough.

Just outside this noble House, in Westminster Station, there are people sleeping rough there now. In London Bridge—I walk through it most evenings—there are people sleeping rough in the station. I walked down Victoria Street to Victoria station: there are people sleeping in the doorways. Opposite Charing Cross station, people wait every night to get soup and bread from those who come to support them. We are one of the richest countries in the world; the homelessness we see on the street is an utter disgrace. As I said earlier, this was virtually eliminated by 2010 and the situation in which we find ourselves today is shameful and entirely of the Government’s own making. They get no credit for claiming to be solving the problem that had already been solved many years ago.

[Baroness Thornhill (LD)]

My Lords, I echo much of what my fellow local government vice-president has said. This is a huge public concern, and on these Benches—particularly from within the local government family—we have always had a “credit where credit is due” policy. On this occasion, however, we have to say that so far, it is not good enough. Context is all, and as the noble Lord, Lord Kennedy, has said, we need to be careful with the interpretation of the figures. Any decrease is welcome, so let us not be churlish about that, but in reality, according to the Government’s own figures—and they are surely not challenging their own figures—rough sleeping is still 141% higher than it was in 2010.

We all knew—those of us who have been out on the local authority counts night, searching under every flyover and in every station and shelter to make sure that we had an accurate count for the night—that we were underestimating the number of people because we knew all the homeless people in Watford by name. So where was Fred that night? That night he was probably sofa-surfing with somebody he had managed to get into a house with. I hope we can all agree, at least, that the current figures are inevitably an under- estimate.

Likewise, we hear that local authorities have suffered considerable funding loss in their budgets, but that is particularly so in relation to homelessness funding: £1 billion less was spent on these services last year than a decade ago. If that level of funding had been sustained—not increased, but just sustained—there would have been £6.2 billion more in services. On a very practical level from the homeless charity that I am involved with, all the funding is short-term: it is one-year funding. This gives charities and councils great difficulty in recruiting and retaining staff, as well as in sustaining long-term delivery. It is essential for these groups of people that we know that we can provide the services for the longer term. My question to the Minister is: is all the funding ring-fenced? Is there any chance, now that the Government are more stable, that they will look at three- or even five-year funding?

I particularly welcome Dame Louise Casey’s role. I think that she is a Dame who is prepared—as we northerners would say—to call a spade a shovel and that she will lift up stones. Can the Minister reassure us that her role will be to look holistically, compassionately and, particularly, cross-departmentally about the issues that affect homelessness? Let us take universal credit. Sanctions are automatic—we know this—but they do not take into account an individual’s circumstances or their vulnerability. Sanctions being implemented can make their situation more perilous. Delays in the housing element of universal credit being paid directly to the landlord lead to further issues. Issues around zero-hours contracts—if they eventually get work, it is very often in that area—can lead to a fluctuation that puts their situation in peril. As a direct consequence of all these things, private landlords are extremely reluctant to take these people on as tenants. That puts all the pressure back on local authorities to house people. The logjam is very much in move-on accommodation, which this money is for, which is why, on these Benches, we welcome it.

However, we see the issue as being the lack of social housing. It is noticeable even in the Statement that the terms “social” and “affordable” are being used inter- changeably all the time. Affordable is 75% of market rate and social is 50%. Can the Minister explain the Government’s policy? Is it to provide more affordable homes and have they given up completely on social homes to rent? Are they relying on councils to build social homes to rent? The unfreezing of the local housing allowance part of housing benefit is welcome, but in high-rent areas such as Watford and most of the south-east, it is still considerably less than the average rent. The shortfall is too great. It is certainly too great for this group of vulnerable people to make up the shortfall, so the private sector is largely out of the question.

Will Dame Louise also be looking at policies such as the Government’s Housing First initiative? When I saw this, it was about developers giving priority to veterans as one group, but when I looked at it further, I realised that it actually meant that there would be even fewer social homes available to vulnerable people. It sounded really noble and people agreed with it, but the actual reality of it will mean fewer social homes. A colleague on the Benches opposite—the noble Lord, Lord Young of Cookham—actually mentioned last week in Oral Questions what we have come to know as the viability loophole. We have been letting developers off the hook from providing social housing for years. As a result, social housing in this country has been decimated. Social housing is what this group of vulnerable people and others need. Surely, if the Government’s own side is saying that it is time to close the viability loophole, it must be time. Finally, is it not time to stop making homelessness a crime and to repeal the Vagrancy Act?