Examination of Witnesses (Questions 540-559)
28 JANUARY 2004
RT HON
KEITH HILL
MP, MS ANNE
KIRKHAM AND
MR JEFF
HOLLINGWORTH
Q540 Mr Clelland: But why is that? Why
should it only apply to vulnerable fellow citizens? Is it not
the case that everyone who lives in the private rented sector
should be entitled to a Decent Homes Standard?
Keith Hill: There are two things
here, I think. It is the familiar refrain of resource and there
is a limit. There is very extensive, as it were, shortfalling
in terms of the quality of stock in the private sector which is,
of course, what, 70% of our housing stock overall in the UK. To
address the totality of that shortfall would be a quite impossible
demand on government spending and, indeed, I do not see why government
should address that demand. After all, these are private properties
and it is for their private owners to deal with those issues unless
there are compelling reasons why they cannot. As you know, there
are various programmes which owner-occupiers can access but it
does seem to me very important, particularly on the part of the
Labour Government, to focus on the vulnerable in private sector
housing; somebody has to be their champion. Within the context
of limited resource, within the context of our absolutely correct
commitment to delivering on decent homes for the properties for
which we, as a government, have the most obvious and direct responsibility
we are doing our best with regard to the private sector.
Q541 Mr Clelland: There are regulations
that cover the private sector, it is no good saying, "it
is the private sector, what it has got to do with us?" There
are building regulations and all sorts of regulations to regulate
the private sector, so why is the Decent Homes Standard not applied
to all the private sector in the same way?
Keith Hill: Because if we applied
the Decent Homes Standard to all the private sector it would probably
consume the totality of annual government expenditure, it is an
impossible demand. We have to be targeted, we have to be selective,
and we have to do the best we can within limited resources.
Q542 Mr Clelland: Why only 70% when the
public sector has to reach 100%?
Keith Hill: For just that reason,
it is a matter of resource.
Q543 Mr Clelland: Just a matter of resource?
Keith Hill: Just a matter of resource?
At the end of the day practically everything in government is
just a matter of resource, is it not?
Q544 Chairman: How much more will it
cost to go from 70% to 75%?
Keith Hill: I do not know if we
have costed that. Have we? Here is just the man.
Mr Hollingworth: I could not give
you the exact figure. To actually go to 100% would cost about
£9 billion in terms of private sector conditions.
Q545 Mr Clelland: £9 billion extra?
Mr Hollingworth: Yes, £9
billion extra up to 2010. It would involve quite a considerable
amount of extra resource to try and get there. Just expanding
on what the Minister said, there is a more technical reason why
we cannot get to 100%—I think I explained that last time—in
the sense that we are focusing on vulnerable houses, quite rightly,
because I think that is what government should be doing, within
private sector housing stock. The extent of non-decency in the
whole private sector housing stock is enormous: 5.4 million homes
in the private sector are non-decent. To actually deal with all
of those would cost an absolutely astronomical amount of money.
Q546 Chairman: How much?
Mr Hollingworth: We have done
the figures. It would be something like £40 to £60 billion.
We will give you that figure.
Keith Hill: We will let you have
a note on that.
Mr Hollingworth: It would be an
enormous amount of money. The government should not be doing it
anyway in the sense that this is basically the owners' responsibility.
If we are targeting on vulnerable households they will pop up
anywhere in the private sector, and we will never entirely solve
the problem of vulnerable households and non-decent homes in the
private sector. We will never get to 100%. It is an arithmetical
calculation and we are quite happy to expand on that. We think
70% is a reasonable target to aim for over the next few years
given the size of the problem, given the level of resources that
are going in, and we are monitoring that to see how much we do
need, and also the problems about enforcement. You said why do
we not make the Decent Homes Standard the standard in the private
rented sector? We could do that but it would be very expensive
and then you would have the problems of losing stock in the private
rented sector. We have to have a balance between having a viable
private rented sector and enforcing minimum standards. We have
a more complicated system of ownership responsibility and difficulties
of enforcing standards against owners in the private sector. That
is why we have only gone to 70%. That might be an underestimate,
we have only just set this target and we need to monitor it. We
will monitor it over the period of the target to see whether it
is too strong or it is too weak. Given the evidence that we have
got and the changes that have happened in the past we think it
is quite a challenging target to go for.
Q547 Mr Clelland: I will come back to
the question of vulnerability in a moment. The 70% target is a
national target, is it not?
Mr Hollingworth: That is right.
Q548 Mr Clelland: Is this not likely
to lead to regional disparities if we are only dealing with it
on a national basis? Should we have regional targets?
Mr Hollingworth: We will certainly
talk to Regional Housing Boards about that, and it is for the
Regional Housing Boards to address this in their regional strategies.
In the guidance we have just issued we have said that we would
expect all individual local authorities to aim towards 70% by
2010. We would expect Regional Housing Boards to have a policy
towards decent homes in the private sector and most of them have
thought about it and quite a lot of them are developing a private
sector Decent Homes Strategy. We will be working through the Regional
Housing Boards and directly with local authorities to make sure
that this target is achieved nationally and that there are no
grave disparities. Clearly there are some parts of the country
where there are problems that are worse than others and different
methods of tackling it in different parts of the country. One
would not expect the methods of dealing with it in London, where
there is a lot of equity and a lot more scope for offering loans
and equity release, to be the same as in the North and North West.
Q549 Mr Clelland: Just to return to this
question of vulnerability: why is the definition so narrowly defined?
Surely there are people who could be described as vulnerable who
are not necessarily in receipt of state benefit of one kind or
another. It is a very narrow definition, is it not?
Mr Hollingworth: It is a narrow
definition and I think we accept that. We had to come to some
clear definition which we could focus on for monitoring purposes
and it is quite sensible that we would expect local authorities
to aim at the most vulnerable. We have never said anywhere that
that is the only target that we expect local authorities to cater
for. That is another quite complicated issue. We expect local
authorities to offer a set of assistance to private sector home
owners in cases where the local authority think they need help,
not just to vulnerable people under our definition. Our definition
is to monitor it but one would expect that figure to improve because
these are clearly the worst cases. We are not restricting local
authorities to just offering loans and grants to vulnerable people
in the definition of means tested, there is a wider scope. Under
Warm Front it is slightly different. Grants through Warm Front
are restricted to people on means tested benefit, which is another
reason why we have lined up our definition.
Q550 Mr Betts: This is an issue close
to both our hearts. Why are houses of multiple occupation not
going to be covered by the Decent Homes Standard?
Mr Hollingworth: They are included
in the Decent Homes Standard, they are part of the private rented
sector target.
Q551 Mr Betts: They are?
Mr Hollingworth: That is right,
yes.
Q552 Mr Betts: In terms of the arrangements
when we come to look at possible licensing arrangements and other
things, can we just be clear about how that will operate and whether
landlords will be required to meet the targets themselves in order
to be given a licence to manage and run these sorts of properties.
Is it not rather odd that they could meet the target, not by improving
the properties but by simply changing the nature of the tenants
who they have in those properties?
Mr Hollingworth: I do not think
they can do that, no. The Decent Homes target applies across the
private sector as a target to aim for, that is the owner-occupied
sector and the private rented sector. There is no mechanism within
the licensing system to enforce Decent Homes.
Q553 Chairman: Why not?
Mr Hollingworth: Again, we are
back to the question of cost. We think that it will be too expensive
to impose a Decent Homes target on private landlords. Instead
of that we are imposing a standard on private landlords through
the Housing, Health and Safety Rating System. That is going to
cover questions of unfitness, disrepair and energy efficiency
but it will not deal with the modernisation category of Decent
Homes.
Q554 Mr Betts: So it is quite possible
that a landlord could own 50 properties in an area, none of them
could be of a decent standard and yet that landlord could still
get a licence from a local authority?
Mr Hollingworth: Indeed, yes.
Q555 Christine Russell: Could I just
ask a simple point. If the Department is really committed to protecting
vulnerable tenants and if you want to demonstrate joined-up thinking
within the Department why, for instance, are you not including,
say, a mandatory smoke alarm in HMOs that are lived in by vulnerable
tenants?
Keith Hill: Actually it is rather
better than that. If you look at the new Housing, Health and Safety
Rating System, for those HMOs which come under the mandatory licensing
system there are clear requirements for appropriate certification
with regard to the safety of gas and electrical appliances and
also to the fitting of smoke alarms.
Q556 Chairman: Enforcement of the Decent
Homes Standards: you are going to go round and tango with local
authorities to get them to achieve it but would it not be better
to give to the tenants a legal right to take whoever their landlord
is to court to have the Decent Homes Standard enforced?
Keith Hill: Well, that is a new
one on me. I have to say that I am always reluctant to encourage
anybody to get involved with my learned friends, but let me see
if my gurus have thought about this.
Ms Kirkham: I think what you may
be referring to is the judgment for local authorities that they
cannot actually enforce the current fitness standard against themselves.
Is that the issue?
Q557 Chairman: That is one of the issues,
yes. Why not move the whole thing on to the tenants so that they
really can get the Decent Homes Standard enforced?
Ms Kirkham: I think where you
have got a landlord who owns a significant number of properties,
the most efficient and effective way of investment is through
a programme of activity and to have individual households demanding
that their homes should be improved on a very random and ad hoc
basis would make that a much more inefficient way of delivering
improvements to those households.
Keith Hill: Is there not a political
issue here? We are a representative democracy and our system for
delivery depends on elections and accountability. To reduce the
delivery of social objectives to the assertion of individual legal
rights seems to me to be a step away from that democratic and
collective process that I think we are all committed to.
Q558 Chairman: I will not pursue that
because I am worried about the time.
Keith Hill: It may be for a different
select committee, a political theory select committee.
Q559 Chairman: Something that the Committee
only heard about this morning which seems to be causing some concern
is the VAT shelter. Can you explain this and what you are doing
about it?
Keith Hill: You will not be in
the least surprised to know that my first line is that this is
an Inland Revenue matter.
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