Housing and Planning Bill

Lord Kerslake Excerpts

Wednesday 13th April 2016 Lords Chamber

[Lord Lisvane (CB)]

My Lords, Clause 67(1) gives power to the Secretary of State to make a determination requiring a local housing authority to make a payment to him in respect of vacant high-value housing—or, if later government amendments are agreed to, higher-value housing. The vehicle of a determination has been well described by the distinguished legislative draftsman Daniel Greenberg, who is also the editor of Craies on Legislation, as “quasi-legislation”. It nevertheless has the force of law and as such it can, for example, modify, dilute or remove rights. Clauses 67 to 71 set out some undemanding parameters for the Secretary of State in making his determination, although the Government regard it as,

“setting out clearly the scope of the determination-making power”.

But in essence, in the Bill as reported, the Secretary of State would have extensive freedom of action in an area which may be the subject of considerable contention.

Amendment 53, in my name and those of my noble friend Lord Kerslake and the noble Lord, Lord Beecham, would require any determination made by the Secretary of State to be by regulations. Taken together with Amendment 132, any determination that affected more than one authority would be subject to the affirmative procedure. Amendment 132 would additionally apply the affirmative procedure to regulations that contained more than one determination. It would also make the definition of high-value—or higher-value—housing subject to parliamentary approval.

Parliamentary approval and authority is at the heart of this issue. This is not about the threshold between primary and secondary legislation—much in our minds in the Strathclyde context—although those issues will be very much to the fore in the very last group on the Marshalled List. Instead, this is about what Ministers may do without seeking the approval of Parliament. The Delegated Powers and Regulatory Reform Committee, of which I am a member, under the exemplary chairmanship of the noble Baroness, Lady Fookes, reported on this proposed delegation in its 20th Report of this Session. The committee concluded that it was,

“inappropriate to delegate to the Secretary of State a power to determine the amount of the payment to be made by local housing authorities without any form of Parliamentary scrutiny, particularly in view of the paucity of detail on the face of the Bill to guide how the power is to be exercised”.

The Minister responded to that report and to the following one dealing with the second half of the Bill on 23 March. Although I am speaking in an understandably critical vein, at this point I pay tribute to the noble Baroness for the care and courtesy with which she has handled proceedings on the Bill and for her readiness to engage with noble Lords in all parts of the House. However, I have to take issue with her on what she said in her reply to the Select Committee. She said:

“The nature and amount of information that will be contained in the determination … means that it is appropriate to use a determination rather than a statutory instrument. The determination will contain the formula, the assumptions and the payments for … each of the 165 local housing authorities … including, amongst other things, the authority’s vacancy rate, the value of its high value housing, the number of high value properties and amounts in respect of transaction costs and attributable debt … In setting out such a large and complex set of data there is the potential for errors to creep in, which would only be noticed by the relevant local authority. We therefore want to ensure that there is flexibility to amend the determination very quickly to correct any such errors”.

There is a syllogism here which I hope the noble Baroness will acknowledge. She is in effect saying: first, there is a huge amount of information; secondly, all that information must be in the determination; thirdly, it is too much information to put into an SI, especially if correction might be needed; and fourthly, ergo, the determination cannot be in an SI. But that is not so, and I hope that I can help the noble Baroness out of this particular cul-de-sac. The sharp end, as it were—the formula, the assumptions, the payments for each authority—can be in an SI subject to the approval of Parliament. The extensive supporting working can of course be published at the same time, but it does not have to be in a form which is formally subject to the approval of Parliament in an SI.

The distinction in Amendment 132, applying the affirmative procedure to a determination which is of general application and the negative procedure to any which has specific application to an individual authority, would deal very neatly with the Minister’s concern about needing to correct mistakes which could be noticed only by the relevant local authority. A correction of that sort could be done very quickly by a negative SI without needing explicit parliamentary approval—which of course I agree would take time. On the other hand, a systemic error, or a major change in assumptions, would attract the affirmative procedure and Ministers would have to explain themselves to Parliament. That is as it should be and as I hope it will be. I beg to move.

[Lord Kerslake (CB)]

My Lords, I will speak very briefly on this issue because it is almost impossible to follow that advocacy. I learned more in that particular bit about the process of dealing with these issues than I have over a long period.

During the Bill’s passage, there has been a great deal of concern about the things we do not know and cannot see at this point in its progress. We will come on to the question of secondary legislation, as the noble Lord, Lord Lisvane, said, but here and now we have an opportunity to get this issue right between regulation and determination. Any technical issues that might flow from that were amply addressed by the noble Lord. I commend the amendment to the House as a practical and sensible way to address a continuing strand of debate throughout the whole passage of the Bill.

[Viscount Eccles (Con)]

My Lords, some years ago, I was a member of the Delegated Powers Committee. Determinations are almost always undesirable. They are arrived at and presented as an option of last resort because, as the noble Lord, Lord Lisvane, said, the matter being considered has become very complicated and detailed. Determinations are a sort of escape clause, as I see it. In a parliamentary democracy, they are inherently undesirable, and I therefore support the amendment.

--- Later in debate ---

[Baroness Bakewell of Hardington Mandeville]

My Lords, I shall also support Amendment 64A in the name of the noble Lord, Lord Kerslake. I realise I am in the way of having the debate about Amendment 64A, on which I hope the Minister wishes to make a statement. However, I will continue.

For the Secretary of State to require local authorities to hand over money on the basis of the number of high or higher-value properties that may become vacant in any given year is, to me, iniquitous. However, I accept that a formula has been agreed with local authorities, which will be based on the assumed number of high or higher-value properties that will become vacant in any given year. In whichever way the formula is calculated, local authorities will be required to pay to the Secretary of State a sum of money that will cover the cost of the 20% discount on the starter homes and the right-to-buy scheme. In the current economic climate, local authorities do not have spare capital at their disposal and have never done so. They are particularly good at making every pound count for the benefit of their residents. The vast majority will therefore have to sell assets of some sort to fund the Government’s levy. The sale of capital assets involves costs and it is only logical for local authorities not to be out of pocket as a result of this measure.

Amendment 55 would allow local authorities to replace on a one-for-one basis with affordable homes in the same area. I refer your Lordships to the Conservatives’ press release of 14 April 2015, which gave details of how the right to buy will be funded. We have had discussions about this. The sale of high-value council homes is referred to in the last paragraph and I will bore your Lordships by reading it. It said:

“A Conservative government will legislate to require local authorities to manage their housing assets more efficiently, by selling off expensive properties—only when they become vacant—which will then be replaced with normal affordable housing. Local authority properties that rank among the most expensive third of all properties of that type in their area—including private housing—will be sold off and replaced with new affordable housing on a one for one basis. But this will only happen as they fall vacant. Nobody will be forced to move”.

I thank the Minister for her amendments so far and look forward to what she has to say further on this issue. In the mean time, I beg to move.

[Lord Kerslake]

My Lords, I first declare my interests as chair of Peabody and president of the Local Government Association. The purpose of Amendment 64A, which I have tabled, is to do two things. First, it is to put one-for-one replacements in the Bill so this issue is beyond doubt. Given that this was quite clearly in the manifesto, it seemed right and proper that it should be in the Bill. The second part of the amendment was to give the opportunity for a local authority, where it could demonstrate the need, to put the case to government and seek their agreement for a like-for-like policy—that is, the replacement of a social rented property with a social rented property. So there are two parts to this, which I would call one-for-one and like-for-like. They are drafted very differently to allow for local flexibility and initiative.

As has already been made clear today, the Minister has signalled a willingness to compromise on the issues involved in my amendment. She will say more about this in a minute and I do not wish to steal her thunder but, having had a chance to have an informal conversation with her, I am very grateful to her and the Secretary of State for their willingness to listen genuinely to the concerns of this House and those affected outside, and to respond to these concerns. It reflects well on them both and I am grateful for it.

It is worth rehearsing briefly why this part of the Bill has caused such concern. The first and most significant concern has been that of basic fairness. Local government is being expected to foot the bill for a central government policy: to extend the right to buy to housing associations. This is a central government policy funded by local government. To do this authorities are having to sell off, as we now know, higher-value properties as they become vacant, thus reducing the opportunities for those who are in most need. As the letter to the Guardian from the four LGA leaders put it,

“selling council homes will hamper councils’ ability to invest in new affordable council housing”,

and it is,

“likely to have the unintended consequence of increasing homelessness and pushing more families into the more expensive private rented sector”.

That is the view of all the parties in the Local Government Association. In short, those who are better off and have the means to purchase their housing association property will gain a large cash discount. Those on the lowest incomes who are in most need of housing will lose out. That is a basic issue of fairness that cannot be avoided in this proposal.

The second major concern, which we have debated a lot this afternoon, is that the proposal as previously drafted was highly centralised and “one size fits all” in its effect. As we have already heard, we do not have the proposed formula for top-slicing local authority receipts, which will come later. However, as the Minister expressed very well, in some areas there was the prospect under the previous construction that the social housing in those areas would, over time, be effectively wiped out, utterly changing their character and working completely against locally assessed need.