Lord Kerslake
Main Page: Lord Kerslake (Crossbench - Life peer)Housing and Planning Bill
Lord Kerslake Excerpts
Lord Kerslake
My Lords, I support the amendment of the noble Lord, Lord Best. I will also speak to Amendment 81A, which I supported, and 81B, which I put forward and lead on. These amendments go to the fundamental question for local authorities of whether the costs they will incur will be properly recognised within the arrangements. As has been well put by the noble Lord, Lord Best, in some instances the costs may make the whole policy not worth putting in. In fact, we may find—depending on the outcome of all this—that the costs will raise a question about the whole policy. However, at the very least, in different housing markets it most certainly will raise questions. Therefore, it is absolutely right to say that in circumstances where it clearly does not make sense to implement the policy in terms of costs and benefits, there is provision to not proceed with it.
The other two amendments seek to be very clear that administrative costs will be covered. I speak specifically to Amendment 81B. Within the draft Bill, it says the Minister “may provide for deductions” to cover costs. In other words, it is a permissive choice for Ministers whether or not they make these deductions. It seems inconsistent with the intent of Government and therefore the amendment does something very simple, which is to change the “may” to a “must”, to put it beyond doubt that, as this is a government policy which local authorities are being asked to implement, they must properly provide for the costs of implementing that policy.
This is the key. First, in order to access the information about incomes, the net has to be cast wide—effectively ask all tenants to secure information about less than 10% of the tenants. That is the first point. Secondly, if this is operated in a fair way there will be complexity. There is no doubt about that. The noble Baroness, Lady Hollis, very precisely pointed to one of the issues of fairness: if people’s income changes, in the interest of administrative simplicity you might say, “We won’t change the rent”, but that would be extraordinarily unfair if people have lost jobs or changed roles and their income has changed significantly.
As we know, in the labour market that we work in, people can see their incomes as householders change very rapidly indeed—from one week to the next, as I said earlier. Therefore, you have complexity. You have complexity about the different benefits within the system, about the makeup of families, and about how you assess who the higher earners are within those families. With that complexity comes cost. It is an absolutely logical consequence of seeking to introduce a fair system.
Lord Stunell (LD)
Does the noble Lord agree that with complexity also comes error? Some of us who, when at the other end of the building, spent a lot of time helping constituents deal with housing benefit queries and difficulties are well aware of the delays and problems in that system and foresee something at least comparable when this system is brought into play.
Lord Kerslake
The noble Lord makes a very powerful point. With any new system—or indeed with very mature systems, such as housing benefit—there are huge risks of error and cost in correcting it. I have run a housing benefit system and know just how easy it is to run into difficulties with it. I also know how costly it is to run because of the complexity of individual circumstances. We are here creating a whole new parallel system of assessment that sits alongside those for universal credit, housing benefit and so on. It will be new, and we will not establish a lot of the detail until we have run it. That, by the way, is why I still feel strongly that a pilot to test the operation of the system would be very valuable, not least because it would tell us how much cost is involved and what are the potential error rates.
It is essential, first, that we recognise that this may not be worth doing nationally, and certainly not locally. Secondly, we must give comfort in the Bill to local authorities that their costs will be covered. Thirdly, we must recognise that if this is to be a genuinely fair system, it will come with complexity and significant cost.
Baroness Bakewell of Hardington Mandeville (LD)
My Lords, I support Amendment 75A, to which my noble friend Lord Stoneham has added his name, and Amendment 81A, to which I have added my name. Earlier, we debated at great length the cost to local authorities of administering pay to stay. The system appears disproportionately bureaucratic and, as we are uncertain how implementation will work, it will be extremely costly to sort out.
Housing, revenue and benefits officers are already working to full capacity. I have yet to ask the officers on my council just how many more of them they think they will need to administer this system. As we have heard, the absence of any detail means that no one can be sure that the additional rental income will cover the cost of administration. Local authorities should not be out of pocket. There is very little detail on the scheme and no transparency, and it seems that the Government are just transferring costs to local authorities.
On market rents, we have heard that there will be a flat rate of income. When tenants reach that rate, they will be assessed to pay market rents on a sliding scale. However, we have not heard anything about whether the taper will stop at a lower or higher level of rent. Will the market rent be assessed local authority by local authority, or will it be a flat rate? The Secretary of State has yet to tell us. Will tenants paying additional rent on the taper in the north stop paying at a lower level than those in the south-east, where the taper may carry on for some time, because market rents are much higher?
It is not surprising that local authorities are gaining the impression that the Government do not value them or the contribution that they make to their areas. I am very disappointed that we have so little detail at this stage on this very important clause, and I support the amendments.
Baroness Hollis of Heigham (Lab)
Why on earth should we be pleased that the Government will allow local authorities a reasonable proportion of their costs to be reimbursed? The whole of any profit will go to central government. Yet apparently the costs of raising that money may be divvied up in whatever proportion the Secretary of State judges reasonable. That is unacceptable. If we are supposed to be raising money for the Chancellor of the Exchequer, he should pay the full costs of so doing.
Lord Kerslake
I am grateful for the Minister’s assurance on covering the costs. I would have thought, therefore, that putting “must” in rather than “may” would not of itself cause any particular issues, given that that is the Government’s intent here. What would be helpful is if we could, when the Government firms up the taper, have a clear analysis of the potential income that is likely to be raised and the likely costs of collecting that income.
Lord Kennedy of Southwark
As my noble friend Lady Hollis has said, can the Minister when she responds say why it is reasonable costs and not all the costs that have been incurred? It is totally unfair if local authorities have to bear some of the costs and all the profit—as my noble friend said—goes to the Government.
Can the Minister also comment on Clause 84(5)? It is an absolutely ridiculous clause the way it is written. It needs to be improved, rewritten or taken out.
Lord Kerslake
My Lords, I speak in support of this group, and specifically speak to my own amendment 82BA. It is a great shame that we reached this very important issue at this stage of the evening—an issue that will have a profound impact on the future of social rented housing. Why do I say that? At the core of the offer to a new tenant is that this becomes their own home. They do not own the home but it becomes the place they regard as home. The reason they feel that way is that they have a secure tenancy for an indeterminate period. Moving to this model of tenancies will change that experience. It will make it feel not like their own home but—however we wish to dress it up; however much we issue guidance on renewal after two or five years—a temporary home. That is the reality of this. We will overnight have changed the nature of the social contract, if you like, with social tenants.
This is not a small issue. It is a very profound issue, and it has to be seen alongside the other changes that we are making to social rented housing, as I have said in previous debates. Because of the forced sale of high-value assets, the opportunity to move to a bigger home is constrained. Pay to stay will mean, as we have just debated, significantly higher rents for tenants on relatively modest incomes, in reality. We will move to the end of the affordable rented programme by 2018. Then we add this final amendment, which essentially removes mandatorily the right to secure tenancies. How do the Government think that council tenants will see this combination of changes? Will they regard it as a commitment to their future or will they regard it as seeing the end to the form of council tenancy that the noble Lord, Lord Bassam, spoke about earlier? This is a very profound change going on around us.
We have a provision now for the issuing of flexible tenancies. It exists and has existed for a number of years now—three or four years. What is again a dangerous precedent is that, having had a voluntary policy for a relatively short period of time, the Government conclude that the voluntary policy has not been sufficiently actively exercised, so we make it mandatory. Is that now the way we do things? It is voluntary if you do it the way we want you to do it—otherwise we make it mandatory.
Voluntary is the right way to see this issue of tenancy, because I can see that there are circumstances in which individual local authorities will want some flexibility around tenure. There is a perfectly good case for that. I cannot see why we should have a single mandatory policy imposed on every local authority, which then requires a set of regulations and guidance to tell it how to do it. Where in any possible sense does this sit with localism?
Why should there be a variation here? In some low-demand estates, which we have heard about—and there are still some—it makes absolute sense to give people secure tenancies. In other situations there may be a need for choice, because of the nature of the demand and of what is happening. What is absolutely certain is that, whatever guidance and policy the Government produce, it will not be adequate for the different situations up and down the country. We will be creating another layer of bureaucracy and central government control. It is a very retrograde step and something that was not part of the manifesto, to go back to some of our previous debates. Indeed, it came in at a very late stage in the process.
I absolutely get the point about efficient use of stock, but that has to be done in consultation with persuasion of the individual tenants. The Minister spoke about older people, but do we seriously think that an older person who has been in their property on a renewable tenancy for 30 years—that might be the case, in 30 years’ time—is then going to be told, “You’ve finished your five years, off you go”? Do we think that is the position we are going to reach in relation to tenancies? Of course not. It has to be through persuasion and through making an offer to that older person that meets their needs.
The case for removing this provision is strong. As I say, there is already legislation that gives the flexibility to local authorities. But, if the issue is that local authorities are not actively using their potential discretion, I have put an alternative amendment in front of the Committee this evening that would encourage them to do so. It would remain discretionary but they would actively need to exercise that discretion. This should not be needed—I shall be clear about that—but if it is an alternative to a mandatory model, which I think is wrong in how it would operate and completely contrary to the direction of localism, I would hope that the Government would seriously consider it.
Lord Young of Cookham (Con)
My Lords, quarter to 11 is not the right time to have this serious debate about the role of social housing. This set of amendments and the previous debate go to the heart of what social housing is for. Is it, as we heard in the previous debate, to provide stable and balanced communities or is it to provide housing for those in greatest need for—to use the words of my noble friend—as long as they need it? Over the last 30 or 40 years the role of social housing in this country has gradually changed from the first towards the second. It is now much more focused on those in greatest need than it was 30 or 40 years ago, when young couples would put their names on the waiting list and gradually get to the top and no one at that point would ever have asked whether it was right to question their entitlement to a lifetime tenancy.
Now, one really has to balance the legitimate expectations of council tenants for a lifetime tenancy with the needs of those on the waiting list—the two are directly related. I think the time has come to question the lifetime entitlement to a secure tenancy because people are in need of social housing. If one takes the view that the role of social housing has changed it makes sense to have fixed tenancies and a conversation when that tenancy comes to an end to see whether there are other options for that tenant. At that point it will be entirely up to the local authority whether it renews the tenancy or has guidance from the Government.
Lord Kerslake
Does the noble Lord not agree that if this is the change that is happening—I say we should be aiming for both secure communities and flexibility—why not leave that to the discretion of the local authority? Why impose it from central government?
Baroness Evans of Bowes Park
The noble Lord is right, which is why we will be producing detailed guidance. Also, other people will be involved in reviews when a tenant appeals, so the situation that he describes should not happen. The tenant will also have the right to challenge the landlord’s right of possession as part of the possession proceedings in the county court. The court will expect the local authority to have behaved reasonably and proportionately.
New fixed-term tenants will have the same rights as most secure and flexible tenants do now. They will usually be able to terminate their tenancy at any stage by giving four weeks’ notice, while also enjoying protection from eviction during the fixed period. The local authority landlord will need to demonstrate to the court that one or more of the grounds for possession are proven and that they are acting reasonably in seeking possession.
Just as now, tenants will be eligible for the right to buy once they have accrued three years as a tenant of public housing, but this does not have to be three years continuously. As with flexible tenants now, they will not have the right to improve or to be compensated for improvements, but landlords will still be able to grant such rights with the tenancy agreement if they choose. The provisions allow for landlords to continue to operate an introductory tenancy regime, to demote fixed-term tenancies, and to provide for fixed-term tenants to be offered a family intervention tenancy.
I now turn to the amendments. The intention of Amendment 82BA is to allow local authorities to continue to grant lifetime tenancies to new, as well as existing, tenants. We are concerned that this would not ensure that we get the best use out of our social housing stock.
Lord Kerslake
I apologise for intervening at this very late hour, but nowhere have we had an explanation of why the Government feel it necessary to move from a discretionary model that has been in place for a very short period of time to a mandatory model on local authorities.
Baroness Evans of Bowes Park
I am just about to come on to some reasons.
Councils are already able to use flexible tenancies, as noble Lords have said, which are tenancies with a fixed term of two years or more. They have been able to do so since April 2012, when the changes introduced by the coalition Government’s Localism Act 2011 came into force, but they are not taking advantage of this flexibility. Instead, the vast majority of local authority tenancies—more than 90%—continue to be granted with lifetime security to people who may have only a short-term need. We do not believe that this is a good use of scarce social housing. As my noble friend Lord Young highlighted, there are 247,000 tenants who are forced to live in overcrowded conditions due to the lack of suitably sized properties, while thousands more occupy homes with more bedrooms then they need. Of course, there are also the 1.2 million households on council waiting lists that are waiting for a social home. We believe that the provisions in the Bill will ensure that social housing is properly focused on those who really need it for as long as they need it.
Amendment 82BB would ensure that new fixed-term tenancies have a longer term of 12 years in all cases. While I recognise that this would introduce consistency, I do not believe that this would be appropriate in all cases, as a household’s circumstances can change considerably in 12 years. The requirement for review points at two to five years will ensure that social housing is provided to those who need it most for the period of their need; that those with longer-term needs can be moved into more appropriate housing as their needs change over time; and that tenants can be supported into home ownership where this is a viable option for them, or offered support towards that in the longer term.
Amendment 82C would extend the minimum tenancy period from two to five years. In fact, most local authority flexible tenancies are currently granted for a five-year period, and we expect that this will continue to be the case, with two years used only in exceptional circumstances as now, and we propose to provide guidance to this effect. However, we recognise that there may be circumstances where shorter tenancies are more appropriate in order to meet short-term needs. Some councils are already using shorter tenancies to support young adults into employment and they could also be used to provide moves into accommodation for those recovering from drug and alcohol abuse. They may be useful for families who need a larger home for a short period only, or to make the best use of properties that are earmarked for demolition which would otherwise lie empty. We think that local authorities will welcome the continuing flexibility to grant shorter tenancies in these types of circumstances.
Amendment 82D would extend the maximum tenancy period to 10 years. As I have already said in relation to the previous amendment, a household’s circumstances can change considerably in five years, whereas the provisions in the Bill that will make five-year tenancies the norm will ensure that local authorities carry out regular reviews of their tenants’ circumstances. Of course, where a tenant’s circumstances are broadly unchanged, then the landlord will of course be able to grant a further tenancy in the same house.
Amendment 82E would guarantee that lifetime tenants of private registered providers—housing associations—as well as local authorities would have their security of tenure protected if they move to a local authority home. This would be the case whether they are moved by their landlord or apply to transfer. It would specifically protect those who have moved as a result of the removal of the spare room subsidy. As I have said, the Bill already gives local authorities discretion to offer tenants a further lifetime tenancy in limited circumstances and we have made it clear that we expect to regulate to ensure that those circumstances will include where tenants move to a smaller property. This would include where they move as a result of the removal of the spare room subsidy. In developing the regulations we will consider the extent to which they should apply to lifetime tenants who move from properties owned by a private registered provider.
Amendment 82F would guarantee all lifetime tenants a further lifetime tenancy if they move to another council home. We recognise that existing lifetime tenants may want to move home for a variety of reasons, and we do not want to stop them doing so. However, with more than 1.2 million households on council waiting lists, it does not make sense to guarantee that everyone who has a lifetime tenancy will always have their security protected if they choose to move.
Amendment 82FA would ensure that where existing lifetime tenants move and they are above pension age, or they are moving to a home which has been or is designed to be adapted for someone who is disabled, they will always get a further lifetime tenancy. Of course, I agree it is important that suitable accommodation is available for older people and those who need adapted accommodation, and that the system should be flexible enough to allow people to move as their needs change over time. Ensuring that tenancies are reviewed every five years will help make this happen. However, we do not wish to restrict mobility in the social rented sector, which is why, as I said, the Bill includes provisions to ensure that local authorities have the discretion to grant existing lifetime tenants a further lifetime tenancy when they move home. We will work with local authorities in considering the circumstances in which lifetime tenancies should continue to be granted and will certainly give serious consideration to the needs of the elderly and those who require adapted accommodation as part of the process.
Amendment 82G would ensure that where existing lifetime tenants move as a result of domestic violence they will be guaranteed a further lifetime tenancy in their new home. I fully appreciate the intention behind this amendment. In developing the regulations that determine when a local authority may grant existing lifetime tenants a further lifetime tenancy when they move home, we will give very careful consideration to whether this should include those who are moving home to escape violence or intimidation of any kind.
The intention of Amendment 82GA is to guarantee that existing lifetime tenants who are severely disabled or have mobility or care needs—as well as those who are full-time carers—will always get a further lifetime tenancy if they choose to move. Again, I certainly appreciate the motivation behind this amendment. It is clearly important that disabled people and those who have other mobility or care needs can move to more suitable accommodation as their needs change over time. As I said, this is one of the drivers of the tenancies. Once again, I can confirm that in considering the circumstances in which lifetime tenants may retain their security when moving to a new council house, we will give consideration to whether the circumstances should include tenants with severe disabilities, mobility issues or significant care needs, as well as those who need to give or receive care.
The provisions in the Bill will ensure that social housing is focused on those who really need it for as long as they need it. It will ensure that local authorities get the best use out of their homes so that more households are able to access social housing and so that social tenants who aspire to own their own home are supported into home ownership where this is a viable option. I hope my responses provide reassurance that the Government are committed to supporting mobility within the social rented sector and, importantly, to protecting the safety and well-being of citizens. I am very happy to have further discussion on these points and to meet any noble Lords who would like further information on these matters. I hope that, with these assurances, noble Lords will not press their amendments and that Clause 113 stands part of the Bill.