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

Planned Legislation on Housing Matters (LGB 45(a))

  The following commitments have been made by Ministers for legislation on Housing matters as soon as Parliamentary time permits:

    (i)  Introducing seller's packs to the homebuying and selling process, designed to benefit consumers and strongly backed by the Consumers' Association. This was a manifesto commitment in 1997 and in 2001.

    (ii)  Rationalising and modernising the controls on Houses in Multiple Occupation (HMOs), including a clearer definition of HMOs and a compulsory licensing scheme. This was a manifesto commitment in 1997 and in 2001.

    (iii)  Reforming the housing fitness regime, replacing the existing fitness standard with the evidence-based Housing Health and Safety Rating System (HHSRS) as the basis for enforcement against unacceptable housing conditions.

    (iv)  Selective licensing of private landlords in areas of low housing demand, to deal with the growing problem of unscrupulous landlords and their often anti-social tenants undermining efforts to regenerate declining parts of northern cities.

    (v)  Dependent on the outcome of consultation currently under way, possible measures to enable social landlords to deal more effectively with anti-social tenants, which complement the private landlord licensing measures.


  Ministers have made commitments to the following Regulatory Reform Orders:

Housing: Private sector housing renewal

  Repeal of highly-specific grant and loan-giving powers contained in the Housing Grants, Construction and Regeneration Act 1996 and Housing Act will remove most of the restrictions on local authorities' powers to give assistance for home repair and will allow them the alternative of offering loans.

Housing: Delegation of Housing Management (Private Finance Initiatives)

  To make changes to Section 27 of the Housing Act 1985 enabling the sub-contracting of the management work, to allow PFI projects between LAs and shell companies for financing purposes. Aim to complete February 2003.

Housing: timing of rent increases for assured periodic tenancies

  To resolve the problem of "annuality" in Registered Social Landlords' rent increases, to allow RSLs to legally apply a fixed day for annually increasing rents (eg the first Monday in April). This also affects private landlords. Aim to complete February 2003.

  In addition, the Homelessness Act 2002 includes provisions on both homelessness and the allocation of housing. The provisions on the allocation of housing amend Part 6 of the Housing Act 1996. Among other things the 2002 Act repeals the current provisions, which deal with the classes of person who qualify for an allocation and replaces these with new provisions dealing with eligibility for an allocation of housing. The details of the categories of applicant who qualify/are eligible are provided in regulations. Thus, when the relevant provisions in 2002 Act are commenced (January 2003 proposed) the Government will need to make regulations prescribing classes of person who are and are not eligible for an allocation of housing.


The following commitments have been made by Ministers for legislation on Local Government matters as soon as Parliamentary time permits

  The Local Government White Paper Strong Local Leadership—Quality Public Services published in December 2001 included a number of commitments requiring Primary legislation. The recently published draft Local Government Bill covers these commitments. In addition, there is a commitment to legislate to make statutory within local government, the provisions in the Cabinet Office, Statement of Practice on Staff Transfers in the Public Sector and the Annex, A Fair Deal for Pensions. This was announced as part of the package arising out of the Best Value Review. It is included in the draft Bill as an Additional Measure saying that it is the intention to address this in the Local Government Bill on introduction.

Local Government regulations that Ministers have made a commitment to replace or repeal

  There are no regulations to which there is a commitment to replace or repeal but there will be regulations which are to be amended. It has not been possible to produce a list of all regulations that will be amended. There is a process for abolishing a number of consent regimes and there are a number of measures in the Making a Difference report, which we are considering how to take forward.


  Nick Raynsford's letter of 16 July to you addressed those points where he had undertaken to provide supplementary notes after your Committee's scrutiny of the draft Bill on 11 July 2002.

  In that letter, and in answer to Clive Betts' question in relation to clause 48 and 49 of the draft Bill, Nick explained why the Department considered there was merit in making overhanging debt payments rather than continuing to pay housing subsidy to local authorities after the transfer of their housing stock. In reply you have suggested that illustrative calculations should have been offered to confirm or refute this point. I believe this misunderstands the point in relation to the justification for making the overhanging debt payment, as in both instances the Office of the Deputy Prime Minister ensures there is no net burden on the local authority.

  The Office of the Deputy Prime Minister, through the Housing Revenue Account ensures a local authority can meet the full cost of servicing its housing attributable debt. Therefore a local authority can be confident that while it holds housing stock, including where it establishes an ALMO, it will have the resources to meet its loan commitments in respect of borrowing secured for housing purposes.

  Where an authority and its tenants choose housing transfer ODPM assumes that after the transfer the local authority will no longer have housing attributable debt. Where the receipt for the housing exceeds the housing attributable debt, the local authority is required to make provision from the receipt to repay or service its debt.

  However, where the receipt is less than the debt, there are essentially three choices to enable such authorities to deliver tenant aspirations to transfer their housing. ODPM could continue to pay subsidy to the local authority on that part of the debt remaining after taking account of the receipt; it could make a one-off payment to the local authority in lieu of the continuing subsidy; or it could make a payment direct to the public Loan Works Board to extinguish the authority's remaining housing attributable debt. The public consultation undertaken by former DETR in 1999 showed the majority supported the latter option, which was subsequently adopted in the form of the current overhanging debt payment arrangements. Where there are breakage costs associated with the repayment of the housing attributable debt, these must be met by the local authority in full.

  The housing attributable debt position for each local authority will be unique, reflecting its pattern of housing expenditure to date. However, when considering whether or not to transfer its housing stock the position is subsidy neutral, as ODPM ensures that there are resources available to meet the loan obligations. For Government, while the timing of the costs of either repaying or servicing an authority's housing attributable debt differ, the financial costs are likely to be very similar.

  I hope from this explanation that the Committee will recognise that we have sought to put in place a level playing field whereby the Office of the Deputy Prime Minister ensures there are resources available to address an authority's housing attributable debt whichever housing option its tenants choose.

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