Park Homes

Lord Stunell Excerpts

Tuesday 29th November 2011 Westminster Hall

[The Parliamentary Under-Secretary of State for Communities and Local Government (Andrew Stunell)]

It is a pleasure to serve under your chairmanship, Mrs Main. I congratulate my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) on bringing this important subject to the attention of the House this afternoon, and I commend the many Members who have contributed to the debate. I hope that it is not out of place if I mention that my hon. Friend the Member for Mid Dorset and North Poole (Annette Brooke) has played an active part in the all-party group and has met my right hon. Friend the Minister for Housing and Local Government to talk about these matters.

I absolutely agree with my hon. Friend the Member for Romsey and Southampton North that a park home is an affordable choice for many people. She described it as less expensive housing, which is how estate agents describe it. It is an economical and very successful choice for many people, and there are 85,000 such households in England. Fortunately, only a minority of households and site owners give rise to the anxieties that we have heard about today. Many sites are properly managed and maintained, and decent, honest and professional site owners deliver a good service for people on their sites. Unfortunately, the good work is masked by the unacceptable conduct of others. If one reads the debates held in this House, one would get the impression that this form of tenure and these sites are collectively completely unacceptable. I do not think that it is right for us to leave that impression unchallenged.

Rogue site owners certainly cause misery to communities by not maintaining their sites properly. We have heard reports about the bullying of residents and unreasonable and sometimes unlawful interference when residents try to exercise their statutory rights, and we have heard about problems when residents want to sell their homes. The park homes sector needs to be cleaned up. There is no place for such behaviour. It is not right for the sector or the residents, and it is certainly not right for a minority of site owners to exploit the situation that they find themselves in. The Government share the concerns that have been reflected in previous debates and in the work of the all-party group.

Sale blocking, to which several Members have referred, leads to the unjust enrichment of site owners. That is not an acceptable practice, and the Government are committed to eradicating it. We propose to introduce sanctions for those who continue, without good reason, to try to prevent residents from selling their homes in the open market to people who meet the appropriate rules. That is why my right hon. Friend the Minister for Housing and Local Government proposes to consult on a range of measures that will prevent such practice. We are also committed to improving residents’ rights more generally and to closing loopholes in the legislation that allow unscrupulous site owners to exploit residents or deny them their rights.

We are also determined that local authorities should be adequately resourced and have appropriate powers to allow them to protect the health and safety of residents through robust and enforceable site licensing.

[Steve Brine]

While the Minister is on his list of things that he is determined to make happen, may I make a plea that he works with his colleagues in the Department of Energy and Climate Change? Now that we have established that the green deal is applicable to park home owners, will he work with his colleagues in DECC to make sure that park home owners—and indeed many other home owners—many of whom are trapped in fuel poverty, are aware of the green deal and are in a position to take advantage of it? It could revolutionise their fuel poverty.

[Andrew Stunell]

I will certainly undertake to write to my hon. Friend and other Members when I have had the opportunity to discuss the matter with my colleagues in DECC. Members will be aware that the Energy Act 2011 has now passed into law and the green deal is due to start next autumn. Some of the necessary statutory instruments to support that are currently under consideration. My right hon. Friend the Minister for Housing and Local Government will be publishing the consultation early in the new year. I hope that it will provide a timetable and framework for the debate. Following that, we will bring forward the necessary legislative measures at the earliest opportunity.

On the calls for a fit and proper test for site owners, the Government are not convinced that the protection of park home residents requires a complex and costly national licensing system. We have to strike a careful balance that protects the vulnerable and targets the worst in the most effective way. That is what our consultation seeks to achieve, and I look forward to Members’ responses when that consultation is published.

We have already begun the process of enabling residents to enforce their rights and to challenge unreasonable behaviour through the residential property tribunal. Since it started dealing with park home issues in May, it has received 31 applications up to the end of October and it has determined 13 of them. Not everyone will be satisfied with the outcomes of those cases, because in judicial proceedings there will always be a winner and a loser. However, the number of applications shows that residents have been empowered to challenge unreasonableness on the part of site owners, something that few were prepared to do previously through the regular courts. I am certainly not suggesting that the residential property tribunal is the solution to all the disputes, but it is a first positive step, and, I hope, an earnest of our good intentions.

Several Members have raised the issue of service charges for gas, electricity, water and sewerage. It is important to put on the record that existing rules already strongly limit the powers of site owners to impose unreasonable charges. They are not allowed to charge an illegal rate of VAT or to control the service supply. I want to make it clear that if site owners provide services, they will be entitled to recover the cost from residents under the agreement. Sometimes that cost will be recoverable only through the pitch fee. In that case, any charges will be limited to the retail prices index at the next rent review, regardless of the actual charges that the site owner has incurred. For that reason, pitch agreements will often contain a provision permitting the site owner to levy a separate charge for the provision of services. It is important for Members to be aware that the charges are governed by orders made by Ofwat and Ofgem respectively. Under the rules, a site owner cannot charge residents more than the cost he incurs in purchasing water, electricity or gas from the supplier.

In some cases, the site owner can charge a reasonable administration charge. How that recharge is calculated and apportioned between the homes has to be fair and transparent, and residents are entitled to see the bills on which the recharge is based. It is also important to be aware that the site owner can recharge only for the supply to the home and the pitch and cannot include any amount relating to his own supply—for instance, for street lighting or heating of offices or communal buildings. VAT is payable by the home owner at the 5% domestic rate for electricity and gas, not the 20% business rate, even if the supply to the site owner is commercially rated. Water, of course, is zero-rated.

If a resident believes that they have been overcharged for the resale of the services, they can recover the charges in the small claims court. Administration charges on top of the actual cost of energy are also strictly limited. In the case of water, administration charges cannot exceed 1.5p per day for non-metered supplies and 2.5p per day for a metered supply. That effectively means that £5 or £10 per year is the maximum administration charge. I hope that all those measures give some comfort to Members that home owners have some protection. Our next step following the consultation will be to bring forward, when parliamentary time allows, the legislative measures needed to tackle the abuses that have been so eloquently set out today.