Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence

Memorandum by the Local Government Association (LGA) (DHB 24)

  The Local Government Association was formed by the merger of the Association of County Councils, the Association of District Councils and the Association of Metropolitan Authorities in April 1997. The LGA has just over 500 members and represents the local housing authorities in England and Wales. The LGA provides the national voice for local communities in England and Wales. Its members represent over 50 million people, employ more than 2 million staff and spend over £65 billion on local services.


  The LGA welcomes the changes to the fitness regime. They will allow local authorities to better judge the scale of problems in their area and will help them prioritise their resources to carry out repair and improvements to maximise the life of the housing stock in their areas. The application of the enforcement regime, and the potential resource implications, is an issue that we will wish to consider in more detail, not because we necessarily have any problems with it but because it will be very long and very technical and we would particularly welcome local authority comments on the practical implementation.

  Whilst we recognize the good intentions behind the occupancy-based system in applying the Housing, Health and Safety Rating System (HHSRS), our member authorities feel that it is essentially flawed in that occupancy patterns are too fluid both in terms of moves between properties and changes in family size or other vulnerability indicators. It may also encourage landlords to let to less vulnerable tenants.

  There are concerns, particularly amongst low demand pathfinder authorities, regarding the effect that the HHSRS will have upon the usage of housing clearance powers. Clearance will inevitably have to be a significant feature of the Pathfinders' proposals if market re-structuring is to be achieved. Until now local authorities have generally been able to use Section 289 Housing Act 1985 to regenerate designated areas of private sector housing because there have been high levels of unfitness, and the cost of remedying it has been high. The proposal within clause 56 of the Bill, which will amend Section 289, is expected to seriously limit its future use for area regeneration. The clause varies the application of the existing power by only allowing a clearance area to be declared if there is one or more Category 1 hazard in each dwelling.

  Practitioners who are familiar with earlier versions of the HHSRS feel that there is likely to be lesser incidence of Category 1 hazards compared to unfitness, in groups of houses being considered for clearance. There is also concern that whilst the cost of remedying unfitness in a typical house may be high, the cost of remedying one or more Category 1 hazard in the same house may be relatively low. This will have implications for the Neighbourhood Renewal Assessment that is used to compare different options, and is likely to make it harder for clearance to be justified when compared to renovation.

  The impact of the HHSRS on housing regeneration would be of little consequence if there were suitable alternative powers available to achieve the same objective. The revision of Section 226 Town and Country Planning Act by the Planning and Compulsory Purchase Bill, and the existing provisions of Section 93 of the Local Government and Housing Act 1989, both offer the potential to do this. However, the effective usage of these alternatives depends on local authorities making a compelling case that clearance is necessary for the "well being" of residents. Unfortunately there is no established definition of "well being", and any guidance that there is does little to reassure local authorities who face the prospect of having to defend their decision at a Public Local Inquiry.


  The LGA warmly welcomes the proposal for introducing a licensing regime to ensure greater protection for tenants in Houses in Multiple Occupation so that higher standards of management and maintenance can be more easily enforced. It is an issue on which we have been lobbying for many years. The mandatory scheme will help to ensure that 120,000 of the most vulnerable households in the country will receive statutory protection and the discretionary power allows authorities to extend that protection to a wider group of tenants should the poor quality management and maintenance of the properties so demand it.

  In our view there is too much detail included in the Bill on definition. The LGA feels that this would be better set out in secondary legislation allowing for greater flexibility if further amendments are required at a later stage. Enforcement against self-contained flats is still a problem and definitions need to be tightened up in this area. The LGA would also like to see discretionary powers extended to include accreditation.

  The Bill needs to make the link between HMOs and fire safety regulations. A national set of fire safety standards for HMOs is required along with greater clarity and consistency on the lead role in enforcement. This should rest with the local housing authority, which would work in partnership with the fire authority to create a single enforcement package allowing this to be achieved on a one-stop basis, making the system quicker and more effective. The current system needs tidying up. For example, fire authorities are responsible for hotels, but are unable to enforce section 352 standards (Housing Act 1985—means of escape in case of fire). The old Greater London Council (GLC) system of agreed models of fire safety standards for different models of HMO accommodation may provide the answer.

  The LGA would also urge the Government to give consideration to including sprinklers in fire regulation guidance as an additional tool and consider a trade-off approach whereby the installation of sprinklers could offset the failure to meet fire regulations in other areas. A British Standards Institute (BSI) definition of an approved sprinkler system would be helpful and could be fed into fire safety standards.

  Several questions need to be asked in relation to licensing of HMOs that are not yet addressed in the draft Bill:

  1.  What is the licensing timescale for local authorities?

  2.  Will there be a requirement for local authorities to inspect premises before licensing or will owners be required to self-certify?

  3.  Will there be a duty to monitor after a licence is issued?

  4.  More clarity is required on where the approved code of guidance, currently being produced by Warwick University, will sit in terms of management regulations. Will there be a reference to the approved code of guidance in the regulations?

  5.  Will there be a statutory duty for the local authority to promote licensing?

  Whilst it may embody a sound principle, the idea that rent will not be payable on an unlicensed premises is of some concern to Tenancy Relations Officers (TROs) who feel that the tenant could become the target for landlord harassment and possible eviction. A rise in homelessness and the attendant resource implications for local authorities could be an unintended by-product of this measure. The LGA will be consulting member authorities further on this aspect of the Bill.


  In the longer term the LGA would like to see the introduction of licensing for the whole of the private sector but welcomes the proposals in the bill as a good start. The association sees licensing as essential to encouraging regeneration in destabilised communities with a range of social and economic problems, particularly where bad landlords are linked to criminal and anti-social behaviour generally. Good landlords have nothing to fear as the legislation will help to create a healthier private rented sector within which they can thrive and that will encourage tenants to rent.

  We are especially pleased by the additional potential to apply selective licensing in areas other than low demand, where the local authority puts compelling reasons forward. The behaviour of bad landlords is not restricted to low demand communities. In areas where demand outstrips supply tenants can be particularly exposed to bad practices. Anti-social behaviour and landlord harassment can, and does, occur anywhere. It is not an exclusive feature of low demand neighbourhoods. However, The LGA is concerned that the ability for local authorities outside of low demand areas to selectively licence private rented accommodation is not sufficiently explicit in the Bill. The "conditions" for selective licensing are contained in 82(2) where only reference to low demand areas is made. Opportunities for authorities other than those in low demand areas to selectively licence is contained separate to this in 82(5) and appears to be quite vague. The explanatory notes only refer to anti-social behaviour as a reason for taking such action but problematic landlords can cause other problems in high demand areas. The LGA has sought legal advice on this and has been advised that the wording in the Bill would be better termed as "A local housing authority may designate the area of its district or an area in its district as subject to selective licensing if it considers that either the conditions in subsection (2) or conditions specified in an order pursuant to subsection (5) are satisfied."

  The availability of selective licensing to all authorities would be preferable and the explanatory notes pertaining to clause 82(5) should leave this provision open rather than just focusing on anti-social behaviour as a reason to invoke this power. There are plenty of authorities in high as well as low demand areas that have large and problematic private rented sectors. These authorities should be trusted to use these powers if it was felt it would contribute to objectives devised as part of its strategic housing role. This would be consistent with the Government's commitment to increased freedoms and flexibilities for local authorities and we do not feel that ODPM need to micro manage this power by also requiring consent from the Secretary of State before the designation comes into force (Clause 83).

  Applying selective licensing in low demand areas may well drive problem landlords and tenants into neighbouring non-designated areas. This is a point that has been made in responses to previous consultations. There is also a concern at the speed at which areas can be designated—Local Housing Authorities (LHAs) will be reliant on designation being confirmed by the Secretary of State, and there will be a three month delay after confirmation before licences can be required. Where clause 82(2) does not apply, LHAs will have to rely on a ministerial order being made. Areas can decline rapidly where there are problem landlords or tenants and any undue delays may exacerbate low demand problems.

  Whilst the LGA has accepted that licence fees could be self-financing, more consultation needs to take place with local authorities on whether the system should be fully self-financing and if there is to be a cap on fees, how this should be determined. If local authorities are to run self-financing schemes, they will need to consulted extensively before any capped figure is determined. Authorities will also need funding for start up costs.


  These are welcome provisions that will enable the authority to take urgent action on individual properties should the conditions prove necessary. This is required since the implementation of licensing requires full consultation with relevant parties before enactment. However, IMOs, as proposed, are an overly bureaucratic substitute for control orders. Requiring local authorities to go to the County Court before issuing an IMO will slow the process down considerably, as will the requirement to seek the landlord's consent to create a tenancy once an IMO has been issued.

  The LGA would encourage ODPM to make the links between Interim Management Orders and Compulsory Leasing. We would like to see Compulsory Leasing introduced in the Bill in tandem with IMOs.


  Although the LGA would welcome measures that are likely to speed up the home buying and selling process, we feel that the Home Information Pack is rather an onerous way of achieving this and will be difficult to enforce as a civil sanction, particularly as the seller has no duty to present the pack to an authorised officer. From an enforcement perspective, it would be simpler for the same rules to apply to all marketing in a consistent way. With the advent of e-conveyencing it is likely that the buying and selling process will become quicker without these measures. The resource implications of enforcement are unlikely, in our view, to yield sufficient results to constitute good value for money. The LGA, therefore, does not support the introduction of Home Information Packs.

  If the pack is introduced, the housing market renewal pathfinders are unlikely to welcome the options put forward in the consultation paper to amend the rules on home information packs for low demand areas, largely because it would serve to blight these areas, further dampen-down prices and not deter speculators from testing the market with no serious intention to sell. It is acknowledged that the introduction of the pack in these areas would help to raise awareness of property condition and, further, if the Home Condition Report (HCR) could be linked in some way to the decent homes standard by introducing a requirement to report on the components of the decent homes standard as it applies to social housing, it may help to build intelligence on property conditions in the private sector and would provide a larger sample than using the Housing Condition Survey. However, this is an issue we would need to consult further on with member authorities and it may also slow down the process and be more costly for the seller, thus defeating the object of this proposed measure.


  The LGA welcomes the proposals. The changes to the qualifying and repayment periods for RTB will ensure that tenants are more likely to be committed to the property and in a sustainable financial position. Authorities retain the discretion not to require repayment in exceptional circumstances such as illness or unemployment.

  The LGA's fundamental position is that the Government should amend RTB in line with the Right to Acquire for housing associations tenants. In particular the Right to Acquire discount entitlement should be applied in all authorities rather than the recent change in 41 authorities only. This has the virtue of simplicity, transparency and equality. It is also easily understood. In view of the proposed move towards a single social tenure the two schemes will need to be aligned at some point in any event. The current situation presents a very confusing picture. In some areas tenants could receive less than half the level of discount that tenants living in properties of a similar size and type only a few streets away will obtain. It also exposes the government to a requirement to regularly review the evidence to identify whether authorities should be added to or deleted from the group of selected authorities.

  The LGA would also like to see the following measures given serious consideration:

    Suspension on properties scheduled for demolition/regeneration. This would address the double subsidy abuse of tenants taking up RTB and then receiving a home loss payment.

    Requiring discount to be repaid if property sublet within a specified period. Addresses the abuse whereby tenants become landlords or hand property over to a lettings agency.

    Right of resale to local authority. This will allow authorities in high demand areas to have the option to buy back a property, at full market value, for use of affordable housing or keyworker provision.

    Exclusion in rural areas with populations under 3000. This is in line with Right to Acquire.

    Restricting who can be a named party on deeds or mortgage to protect elderly tenants from unscrupulous relatives.

    Requiring tenants to have a clean rent record at exchange of contract. Ensures authorities do not have to try and recover outstanding debt after purchase.

    Placing a duty on local authorities to provide advice on the implications of home ownership including repairing obligations. Many tenants fail to take into account the fact that mortgage payments, unlike rent, do not cover the cost of essential repairs and maintenance. If they do not ensure sufficient provision for these costs, then the properties may fall into disrepair or the homeowner may suffer financial hardship.

    Equity sharing arrangements to be offered in addition to RTB. Tenants could build up credits that could be used to either buy their own home or as a portable discount.

    Requiring agents promoting RTB to include health warning about the cost of their services and what is freely available from the local authority. The results of recent ODPM research indicate that some tenants find the services of these companies helpful. However, it is not always clear that some services can be obtained free of charge from the local authority.

    Valuation to be fixed for three months and reviewed every three months thereafter. Ensure local authority receives receipt that more nearly reflects market price at time of sale.

  The LGA and Welsh Local Government Association (WLGA) are not opposed to the proposal to create a new Social Housing Ombudsman for Wales, although we would like to ensure that the proposals fit in with the overall review of the Ombudsman service in Wales.

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