Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 320 - 328)



  320. Coming back to the issue of licensing, on which you clearly place a great deal of weight, the Government is out to consultation currently on certain proposals. Do you think that consultation proposal goes far enough? How do you think it could be improved?

  (Councillor Mole) One or two points about that particular consultation. I think four years is rather a long time for any consultation. It is a long time to be waiting. I have to say I have done hundreds of public meetings in these kinds of areas and people should not be spending another four or five years in this kind of environment if we can push that on. There are lots of other things. The proposed timetable is a bit too slow, the agreements for implementation appear to be cumbersome. We have experienced this in local government before. We will have to go through many hoops to get a licence for a landlord. We happen to have done that on one or two other issues and we should have learned a lesson about making it too cumbersome. The other thing is gas and electricity, that does worry me because it gives somebody a licence to make sure the gas regulations are right, electricity regulations are right but the house inside can be in a terrible condition for people to live in. I lived in one of these terraced houses many years ago and they were a nice first home. Unfortunately now that is not the case. The actual consultation is going the right way, the White Paper has improved, but it could be done a little better and a little faster.

  321. Do you think one of the constraints the Government are aware of is the available resource within local authorities to carry out a more rigorous licence system starting some of the improvements to properties or assisting?
  (Councillor Mole) I do not want lots of officers running around inspecting houses. What we do need is to make sure that somebody is licensed and that we can implement that. The actual cost is not that great. If you have a dog kennel, you have to get a licence. If you run taxis you have to get a licence. I cannot understand why anybody who has 20 houses does not have to have a licence and be a reputable part of the community. It is not going to cost that much. I should like to hand you over to John, because John has investigated this. One of the first questions we were asked was the question you have just asked: how would we as a local authority be able to do that.
  (Mr Robinson) We put forward a worked-up scheme to government. We thought through the entire licensing scheme and the proposal was to base the cost of running it on charging for licence, but that would only be for the administration of that licence. We saw that there was benefit in landlords making self-certification for various aspects of the licence. First of all that the person would have to be a fit and proper person, checks with Home Office systems for that and then self-certifying and providing documentation to us on the basis of which we would issue a licence. However, it would be subject to periodic checks and certainly subject to check if we were getting complaints from tenants or neighbours. In the event of us finding that they were not complying with the conditions, then we would be looking towards revocation. What we were trying to do was to develop a scheme which was relatively low touch in terms of the bureaucracy of it, bearing in mind that in Gateshead we have a very active landlords' association who are encouraging the good landlords to operate well.

  322. Do you not think there is a risk that in some circumstances, if a licence system is applied in areas which become popular, landlords might say it is just a burden too much and we are going to pull out altogether, it might worsen the situation?
  (Councillor Mole) No, I do not think so. We have had lots of dialogue with landlords and the good ones—and I say the good ones—are very encouraged by what we are doing. What we see firstly is that we can identify bad tenants, we can help by sending officers to landlords' meetings to inform them about the problems we have and even people who own two or three flats are very concerned about letting people into their own property because they do not know who they are and they cannot get rid of them. That is going to be a big help and people are moving towards the licensing scheme because of all the bits and pieces which go with that. It is not just a licence, it is to make sure that the person they are going to have in that flat is the right and proper person and get the help from the local authority as well and help from housing associations and help from the police, the whole thing. It adds to the package and it is not just a licence but a package.

Mrs Dunwoody

  323. When did you tell the Government this? What response did you get?
  (Councillor Mole) We launched the campaign in 1999. We have spoken to the Deputy Prime Minister and spoken to anybody who would listen, to be quite honest.

  324. We all know the Deputy Prime Minister listens.
  (Councillor Mole) I am not getting into that.

Mr Betts

  325. One other issue with regard to private landlords is something we picked up on our visits and that is the issue of housing benefit often underpinning very high rent levels in areas of very low demand. Have you experienced that problem? Has your authority tried to challenge the rent officer service about the levels of those rents and have you had any success in doing that?
  (Mr Robinson) We do not see this as a particular problem in the North East. What we do recognise is that housing benefit is artificially propping up the market. We have areas of low demand housing, high vacancy rates, with landlords who are attracted to buy properties very, very cheaply, and we know that these properties are bought at auction without being seen elsewhere in the country. They are then able, using housing benefit, to put in tenants who perhaps cannot get houses elsewhere across Tyneside and who come in on the basis that the money is very quickly recovered. Then they hope that the property will be acquired by the local authority at the end of the process so they get their money back anyway. We are also clear that the housing benefit system actually enables landlords who are wanting to do this to engineer the decline of an area by buying up properties in an area, having tenants who are not well looked after in an area, the area declines very quickly and the same landlord is able to buy up properties elsewhere in the street at lower prices and so the cycle goes on. In that respect we think housing benefit is a factor.


  326. Do you have actual evidence of that rather than the impression that it happens?
  (Councillor Mole) No. Gateshead is obviously urban/rural, as you well know. The biggest public meeting I attended was in Chopwell, which was an old mining village, where some 200 people pointed out that somebody was moved in to cause social disorder and then two or three people decided to move and the landlord moves in. The property value of those houses dropped within four months. It is unbelievable that somebody can do that. That is in a mining area. They picked on that. There are two streets where we have a problem and we are trying to do something about it. If only we could control that missing landlord, who happens to live in Majorca reaping the benefit and does not care about Gateshead; he can actually do that. I think that is something we really need to do sooner rather than later. We have evidence of that as well.

  327. The only thing that just worries me is that you talked about the right and proper tenant. There is some evidence that councils got tough on anti-social tenants in their council property and they pushed them out of that sector, possibly into housing associations. Housing associations have now got tough and pushed people out of that area, they tended to come into the private rented sector and what you are really saying is that if there were a licensing system, the licensed landlords could also get tough. Where do these tenants who are not "right and proper", in your words, end up?
  (Councillor Mole) When I visit people in council houses and they are misbehaving, they tell me that they can misbehave as much as they want because they will go somewhere else if I throw them out. If they owe £2,000 rent, they will move away and go into the private sector, but if there is nowhere for anybody to go to, there is nowhere to run, people are going to start to conform because they are not going to be able to go anywhere else. Where people have boltholes they can run to—and you made the point earlier on that people have nowhere to escape to—that is unfortunately one of the problems. If there is somewhere to escape to, people do misbehave. You know that if people can bend the rules, they will bend the rules and they will go into the private sector. If they cannot go into the private sector they will not misbehave.

  328. If we have toughness all round, it will work.
  (Councillor Mole) Yes, the penny would drop eventually. There would be an initial problem, but the penny would drop eventually because word does get around.

  Chairman: Thank you very much. Your evidence on this strategy for licensing is very helpful. Thank you very much indeed.

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