Select Committee on Deregulation and Regulatory Reform Sixth Report


Letter from the Clerk of the Committee to the Department for Transport, Local Government and the Regions

Proposal for the Regulatory Reform (Housing Assistance) (England and Wales) Order 2002

Many thanks once again for your presentation to the Committee this morning. I am now instructed by the Committee to write to you for further clarification of on the following points:

1.  Extension of ability to offer assistance to residents of park homes and houseboats

    What guidance does the Department propose to offer authorities to avoid the danger that disabled park home or houseboat occupiers resident in one authority might be refused assistance on grounds of the age or condition of the dwelling in circumstances where they would not in another authority? The Committee recognises that the potential for this sort of 'postcode lottery' is inherent in the basic principle of the proposal to give local authorities greater flexibility in offering assistance for housing renewal appropriate to their local circumstances. However, it seems to the Committee that it could be argued that it would be unfair to refuse assistance solely on the grounds that it would be for the improvement of adaptation of a park home or houseboat, rather than on other grounds relating to the situation which pertains in a particular local authority area; the Committee also recognises that it could be argued that, whereas a 'postcode lottery' might be justified when the assistance in question is offered at the discretion of the local authority concerned, it is far more difficult to justify in the case of mandatory assistance given under, for example, the Disabled Facilities Grant regime.

2.  Requirement to publish a policy on housing renewal assistance

    Whilst the proposed Order would prevent an authority from using its power to give assistance (under article 3) unless it was exercised in accordance with a published policy, the Committee notes that there is in fact no requirement on the face of the Order for an authority to publish such a policy. Should the Order not provide for a requirement for the authority to do so (within 12 months of the Order coming into force)?

3.  Guidance from the Secretary of State

    The Committee would be grateful for an explanation of the basis on which Cabinet Office lawyers advised that you would not be able to require local authorities to have regard to the guidance to be produced by the Secretary of State. (You may wish to write to the Committee yourselves on this point, or alternatively to ask the Cabinet Office to respond separately.)

4.  Provision of financial advice by local authorities

    The Committee has noted the concerns raised by consultees about authorities' ability to offer financial advice, and about liability in the event of poor advice being given. What reassurance can you offer the Committee about authorities' ability to offer appropriate advice, and can you give more details of the guidance which you propose to give authorities on this issue?

5.  Provision to allow authorities to place a charge on a property as security for assistance given

    The Committee notes that the current legislation appears to enable the authority to place a charge on a property higher than an existing charge. For example, if the recipient of assistance had both a mortgage, as the first charge on a property, and a secured personal loan, as the second charge on that property, an authority would currently be able to place its charge above that relating to the secured personal loan. That ability would, it appears, be removed by the proposed Order. Does the Department agree that this is the case, and, if so, does it believe that the current provision offers any necessary protection which would be removed by the Order?

6.  Authorship of report informing declaration of a renewal area

    Justifying the removal of the requirements relating to the authorship of the report informing declaration of a renewal area, your explanatory document states, "The authority will still need to go through a formal declaration process and they will have to satisfy themselves that the evidence presented in recommending that a renewal area is declared is of an approved source." It is not clear to the Committee, however, how the latter part of this sentence applies. There is no such requirement on the face of the Order, nor is it referred to in the outline guidance at Annex G. The Committee would be grateful know, firstly, why it intends to remove the requirements concerned (given that they do not in any case appear unreasonably onerous) and, secondly, how it is intended to ensure that the evidence presented is "of an approved source".

7.  Guidance to be prepared by the National Assembly

    The Committee is grateful for sight of an outline of the guidance to be issued by the Secretary of State, and looks forward to seeing a fuller version in due course. However, it notes that it has not seen any guidance to be issued by the National Assembly in respect of Wales. Given that the proposal will also have effect in Wales, and given the importance which the Committee is likely to attach to ensuring that adequate guidance will be in place before clearing the proposal, the Committee considers that it should have sight of the guidance in respect of Wales in the same way as it has sight of the guidance in respect of England; and would be grateful if the Department would make arrangements accordingly.

8.  Start-up costs to local authorities

    The Committee notes that, whilst the explanatory document acknowledges that local authorities will incur some 'start-up' costs relating to the formulation of the published policy and associated consultation, setting up new systems and processes to administer grants and loans under the new legislation, the draft Regulatory Impact Assessment is silent about such costs, nor is there any indication in any of the explanatory documentation of whether authorities will be given any help with these costs. In view of the level of concern expressed on this point by consultees, the Committee would be grateful for the Department's assessment of these costs, and to know whether any additional help will be offered to authorities to meet them in the initial period of transition to the new regime.

9.  Ability of local authorities to exercise discretion

    The Committee is concerned that local authorities' ability to exercise discretion over the most appropriate way to offer assistance for housing renewal should not be fettered, as it believes has been the case in the past, by central Government direction regarding how money provided to them should be spent. This applies not to legislative requirements of the sort which will be removed by this proposal, but rather to understandings that money will only be provided to local authorities if it is spent on certain projects, or kinds of project. Can the Department give assurances that allocations of funding to local authorities for housing renewal will be made available solely on the basis that it is to be spent entirely as the authority concerned sees fit (within the appropriate legislative constraints)?

10.  Level of support for local authorities

    The Committee would be grateful for clarification of whether the Government intends to recoup any of the savings expected to be made by local authorities through the greater use of loans rather than grants, or whether it intends to maintain (or increase) the current level of financial support to authorities for private sector housing renewal over coming years. The Committee notes particularly in this respect the provision which is made at article 8 of the proposed Order: it may help if the Department were to outline the use which is expected to be made of this provision.

11.  Changes to the discretionary DFG regime

    The Committee notes the implications of the proposal for the funding of Disabled Facilities Grant in England. It would be grateful for confirmation that the funding mechanisms which apply in Wales are such that there are no similar implications there.

In addition, the Committee would be grateful to know when it will be able to see the report on the consultation responses to which you refer on page 54 of the explanatory document.

15 January 2002

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