Housing and Planning Bill

Lord Lisvane Excerpts

Wednesday 4th May 2016 Lords Chamber

[Baroness Williams of Trafford]

My Lords, we now turn to vacant higher-value local authority housing. The manifesto was clear:

“We will fund the replacement of properties sold under the extended Right to Buy by requiring local authorities to manage their housing assets more efficiently, with the most expensive properties sold off and replaced as they fall vacant.”

That is what the Bill will deliver. It will increase housing supply through the delivery of affordable homes and will extend home ownership by funding the discounts for the ground-breaking voluntary right-to-buy agreement.

Following your Lordships’ scrutiny, there have been improvements to the way that the policy will be implemented. For example, building one new home for each higher-value dwelling we expect to be sold is now in the Bill, as is making the regulations in respect of the definition of higher value subject to affirmative resolution and excluding housing in national parks and AONBs when calculating the payments. However, the other place has voted emphatically, by 288 to 172, to disagree with other changes made in your Lordships’ House. It cited financial privilege, recognising that it is a manifesto commitment. I understand that point and I have to say that I agree.

Amendments 37 and 184, originally proposed by the noble Lords, Lord Lisvane, Lord Kerslake and Lord Beecham, would have put the determination of payments into regulations. This would have led to considerable delay in receiving payments from local authorities in respect of their higher-value vacant housing, and would have delayed the delivery of our manifesto commitments.

I agree with the other place that a determination is the most appropriate way of setting out the information about the payment that a local authority will be expected to make. The nature and amount of information to be contained in the determination means that it is appropriate to use a determination rather than a statutory instrument.

I am pleased that the other place has recognised the case made by noble Lords, and has proposed in Amendment 184A that the definition of higher value should be subject to the affirmative procedure. Recognising the will of the other place, I urge noble Lords to accept Commons reasons at 37A, and to agree Amendment 184A.

The other place has also considered Amendment 47, proposed by the noble Lord, Lord Kerslake, and has again cited financial privilege. This amendment would have been extremely restrictive, taking discretion from the Government to ensure that new housing will be delivered through agreement.

The noble Lord, Lord Kerslake, has tabled Amendments 47B and 47C, which are very similar, and therefore I will save the rest of my remarks for my response to our debate. However, as we discussed at Third Reading, Amendment 47 would not be suitable and therefore, recognising the will of the other place, I urge noble Lords not to insist on these amendments. I beg to move.

[Lord Lisvane (CB)]

My Lords, your Lordships’ Amendments 37 and 184 taken together would make the Secretary of State’s determination in respect of vacant high-value housing be introduced by regulations that are subject to the affirmative procedure for matters of principle and the negative procedure for matters relating to a single authority. I do not accept the Minister’s argument that a determination has to be, as it were, a single operation. I believe that it is technically possible to separate the issues and apply a different procedure to each one. Without these amendments, Ministers would have absolute freedom to make decisions in this area subject only to judicial review, as my noble and learned friend Lord Hope of Craighead pointed out on Report.

This is an issue of the level of parliamentary control. Your Lordships wish to see that level raised. It appears that the House of Commons did not. However, I welcome Amendment 184A, which would make the definition of higher-value housing subject to affirmative regulations although, as I said on Report, this is slightly less than half the loaf. I was for a while slightly puzzled by the fact that Amendment 37, relating to the level of parliamentary control, should be designated as one attracting financial privilege. I thought, on reflection, that the judgment must have been made that a delay in achieving the end would mean a delay in receipts and so I accept that judgment. Not least because we have been given the privilege reason, I do not think that on Amendments 37 and 184A there is a case for asking the Commons to think again twice.

[Lord Kerslake]

My Lords, I rise to speak in favour of Motion D1, in my name. These amendments take on board the debate that we had about the perceived restrictive nature of the previous amendments and are changed in some important and significant ways. The first part of the Motion, Amendment 47B, is new and simply confirms that, where a local authority enters into an agreement with the Secretary of State on the one-for-one replacement of a vacant council property that has been sold off, it will be able to retain the funding needed to build a new affordable home. An affordable home would, under the Government’s definition, encompass social rented, affordable rented, shared ownership and, indeed, starter homes. It would be for the local authority to decide whether it wished to enter into an agreement with the Secretary of State and, under this amendment, for the Secretary of State to agree whether they wish to do this—no restriction on either side. If it does so, the local authority will be required to replace one property sold with one new one, which was a welcome addition during the debate on the Bill. However, it will also be for the local authority to consider whether the new affordable property is for rent or for sale, based on the assessment of local needs. The amendment puts beyond doubt in the Bill that the local authority will be able to retain the funding required to deliver this replacement. As such, it is entirely consistent with the Government’s manifesto and I hope, therefore, that the Minister can readily accept it.

Amendment 47C builds on this issue and seeks to put beyond doubt that, where a local authority can make the case—this is in addition to the Secretary of State—on the basis of its particular needs, it will specifically be able to fund the provision of the new dwelling as social housing on a like-for-like basis. Again, the choice is there for the local authority to make its case to the Secretary of State and it is for the Secretary of State to take a view on that case. If they both conclude that there is already sufficient social rented housing in the area, the local authority can choose to build affordable housing for sale or affordable rented housing at a higher level of rent. However, if they conclude that they want to replace with a social rented property, the local authority can make the case on the grounds of its particular need and this amendment will give it the opportunity to do so.

Why is this amendment needed? First, because the other routes to deliver social rented and affordable rented housing will be severely curtailed by other actions that the Government propose taking, both under this Bill and outside it. The new starter homes requirement that we have just discussed will squeeze new social rented housing out of Section 106 planning agreements. Grant funding for new affordable rented properties by the Homes and Communities Agency will almost entirely cease after the current affordable housing programme ends in 2018. The reduction of rents by 1% per annum over the next four years will make it much harder for housing associations and local authorities to deliver viable schemes with social rented housing in them. Taken together, these changes present a formidable challenge to the continued delivery of affordable and social rented housing. Therefore, the ability to replace the forced sale of vacant council houses represents one of the few routes that will be available to secure new social rented supply.

My second reason for these amendments is to provide some protection for local government against the huge unresolved issues in this policy. Since Third Reading, the Public Accounts Committee has published its report on the extension of right to buy. It makes for sobering reading, to say the least. I will quote a small part of it:

“Despite the implications and complexity of this policy, the Department has not published a detailed impact assessment to inform Parliament’s consideration of its legislative proposals. Many key policy details have not been clarified, with the Department offering only vague assurances as to how this policy will be funded, without producing any figures to demonstrate that additional funding from central or local government will not be required”.

It is worth noting in this context that Shelter has issued research today which suggests that local authorities will need to sell off some 23,500 properties a year— 30% of their vacant stock—if they are to deliver the level of receipts set out in the Conservative Party manifesto. Given the potential scale of the impact and the verdict of the Public Accounts Committee, it is not unreasonable to look to provide some protection for local authorities in the Bill. The risk otherwise is that proper replacement will be the first thing to go.

My third and final reason for these amendments is the desperate need for more housing for those on low incomes. In some low-demand areas, social rents are little different from market rents, but in other areas, particularly London and the south-east, the problems are acute. Average market rents in London are now some £1,400 per month, or £16,800 per year, making it pretty tough for the median earner in London on a salary of £30,000. They are completely beyond the range of those on lower incomes. Rents for social housing are typically one-third of that level, making it accessible to ordinary people. But we are simply not building enough new social rented housing, and just one consequence of that is that some 3,400 families with children in London are living in temporary accommodation. This is a scandal and something that all political parties are committed to ending. The forced sale of higher-value properties—typically bigger family properties—in the highest demand areas without proper like-for-like replacement will make these problems even greater.

I have gone through these issues at length to emphasise just how much is at stake and why these amendments are so important. They confirm the funding of one-for-one replacement and provide the opportunity to deliver new like-for-like social housing where a local authority wishes and where it can make a persuasive case to the Secretary of State on grounds of need. These are not restrictive amendments, they are enabling amendments to address a very serious issue. I hope the Government will recognise this issue and that noble Lords will support Motion D1 when we come to vote on it.