12 SITE LICENCE FEES
164. Licence fees for pitches on local authority
residential sites vary widely, from £17.60 to £75.48
for single pitches, and from £19.60 to £86.10 for double
pitches.[218] The average
pitch rental is therefore £47.85 a week, the average social
housing rent is £50 a week. In addition to rent, Gypsies
and Travellers usually have to pay water and electricity charges,
and sometimes sewage disposal charges and a damage deposit. Many
Gypsies and Travellers believe they receive poor value for money,
and pay higher charges for electricity than the settled community.
On our visit to Hampshire we were told that electricity and water
companies will not accept Gypsies and travellers on caravan sites
as individual customers. Instead the local authority as the site
owner acts as the customer, and the electricity is recharged to
the residents through electricity meters. Some are unhappy about
this:
"There is concern by some residents on sites
regarding the cost of electricity as some landlords add more money
to the actual cost."[219]
The resale of electricity is however strictly regulated
and cannot be artificially inflated.
165. Some Gypsies and Travellers are housing benefit
recipients. The administration of housing benefit is undertaken
locally in the district where the caravan site is located. County
councils do not administer housing benefit and are therefore dependent
on the district authorities to administer the benefit.[220]
Under the Rent Officers (Housing Benefit Functions) Order 1997,
the housing benefit payable to Gypsies or Travellers on sites
owned by County Councils is limited to an amount (the local reference
rent) determined by a formula in the Order (the mean of the highest
and lowest rents charged in the locality for occupation of a pitch
in a caravan site after excluding any rents which in the judgement
of the rent officer are "exceptionally high" Or "exceptionally
low").[221] The
resulting figure is the maximum amount of housing benefit available.
A local authority (district, borough or unitary) does not have
to refer themselves to a local reference rent whereas a county
council, which is not recognised as a local authority under the
Social Services Administration Act 1992, does.
166. The National Association of Gypsy and Traveller
Officers has identified sites with local reference rates as low
as £19/week, and others where the reference rate is £38/week.
They conducted a survey which suggested that average local reference
rate is between £24-£28/week whereas the average site
rent is between £35-£45/week. This difference between
the local reference rent and the site rent must be paid by the
resident although many are unable to pay. Lord Avebury told us
that "the consequence is either that the Gypsy residents
build up large arrears of rent, or that the County Council landlords
have to write off the difference, so that less money is available
to spend on maintenance or improvement of the sites",[222]
NAGTO argue that "The disparity in the payments often forces
families to leave sites and return to travelling due to an inability
to fund their accommodation".[223]
167. The situation causes difficulty for County Councils,
as we were told in evidence:
"Our biggest problem in managing sites is
the intervention of the Rents Service where simply because we
are a county council, for some undetermined reason, our sites
are classed as private land and as such the Rents Service set
an artificial benefit level. If you are a Gypsy living on a district
council site then you will get your full benefit paid. If you
are a Gypsy living in housing you will get your full benefit paid.
If you are a Gypsy on unitary authority land you will get your
full benefit paid. If you are on a county council site you will
get this artificial level and in Somerset it is £26 a week
for a family, in Kent it is £22.50 and councils are forced
then to help the Gypsies themselves to either run the site at
a deficit or the Gypsies themselves are forced into hardship.
[…]I contacted the Rents Service in the region and at national
level and the only reason I was given why county council sites
were treated as private property was that it was an unintended
consequence of the regulations. When I actually tried to get into
this they told me about the formula. The formula to decide the
local reference rent is left to an individual rent officer and
he will go and find the lowest rent in the area of a site. This
need not be a site with planning permission, it need not be a
Gypsy site so they are not comparing like with like. He will find
that and then he will decide himself what is the highest economic
rent for the area. In Somerset he decided that was £40 so
he found somewhere at £20 or less than that. Then you put
the low figure, add it to the high figure and divide it by two,
and this is the artificial low reference rent. In Somerset if
you say he set us at £26, so that is £52, £40 is
the highest, so he has found somewhere at £12. That could
be a farmer's field with a stand pipe. Plus the fact when you
go and ask him "Fine, can you tell you the addresses of these
places so that our clients can go there?" "Terribly
sorry, it is data protected and it is business sensitive."
We said, "How many Gypsy sites are included in the calculation?"
"None." Gypsies are not excluded, they are just not
included because Gypsy sites are deemed to be benefits led so
they are not included in the calculation."[224]
"The revenue budget for Gypsies and Travellers
has one source of income, site rents. As a county council the
housing benefits are controlled by the Rent Service, which severely
restricts benefits paid to claimants who reside on county council
owned sites. At the present time site rents on Somerset county
council sites are set at £7 per night per family, the Rent
Service sets Housing Benefit at £3.70 per night - or £26.00
per week per family. It is therefore evident that the revenue
budget must be subsidised by the local council taxpayer. Since
the removal of duty upon local authorities to provide accommodation
for Gypsies and the reorganisation of local government the duty
to provide accommodation rests with a unitary authority or a district
council. County councils provide over 40% of Gypsy accommodation
in the Public Sector and are requested by central government to
continue with this provision yet legislation operated by the Rent
Service make it impossible for county council's to recover rents
which permit them to meet their obligations to their clients,
maintain their stock and continue to function as a financially
self financing operation."[225]
"We would also like to draw attention to
the need for a rent setting system for public sites. Currently,
in two tier authorities responsibilities for housing delivery
rest with district councils rather than county councils. While
many county councils are proactive in providing sites they are
not eligible under current legislation to receive full housing
benefit for Gypsies and Travellers residing on their sites and
have also reported massive cuts in rent levels set by Rent Officers
in their areas. Some county councils have indicated that this
makes the provision of sites in their localities economically
unviable and affects their ability to plough back money into sustaining
and improving provision and services for Travelling Communities.
The LGA advocates the need for a rent-setting system for all public
sites, to end the need for Rent Officer references and to address
the issue of housing benefit shortfall. Unless these issues are
addressed the Government's objective of improving site provision
at a national level could be seriously undermined."[226]
"County councils are aware that in order
to manage sites for Gypsy families they should endeavour to manage
sites so that the sites are self-funding, however, with insufficient
funding that is received from housing benefit it is proving difficult
to manage sites in a cost-effective manner. Residents faced with
the disproportionate payment of housing benefit are either forced
into housing or on the road and the county councils have to continue
to fund the gap in the payments. County councils are faced with
the dilemma of receiving insufficient funding for sites from the
housing benefit system often have no alternative other than to
seek closure and further exacerbate the shortfall in provision
for Gypsy site accommodation across the country."[227]
168. NAGTO told us of the effect of local reference
rents:
"There are different levels of benefit paid
to members of the same family groups resident on the same site.
This clearly is unacceptable with the same facilities and same
outgoings of the same family groups. Even within the same families
different levels of benefit are paid to different members. There
is animosity directed towards county councils by the Gypsies residing
on sites when they are aware that other family members residing
on local authority sites are receiving full benefits and therefore
have less expenditure. There is a disparity of rents charged by
district councils who are aware that they may collect the full
housing benefit and therefore have more revenue to maintain the
sites and ensure that the families on the sites are not asked
for an exorbitant contribution to the licence fee."[228]
169. The Gypsy Council (Romani Kris) are also critical
of the rent service, arguing that private site providers are unable
to accept families dependent on housing benefit because of the
arbitrary benefit levels:
"[…] the question must therefore be
asked why it is that the Rent Service (who, under existing Housing
benefit Regulations must be called in to assess an appropriate
fair rent for privately-operated caravan sites) appear to consider
(at east in England) the figure of £25.00 an appropriate
level of Housing benefit to be allowed on non-local authority
operated Gypsy sites? Quite apart from placing families […]
into a position of serious hardship, this arbitrary but apparently
nationally-decided allowance has had the effect of causing operators
of privately-provided but commercially-operated Gypsy sites to
refuse all applications for pitches from families who are forced
to rely on Housing Benefit in order to meet their weekly rents,
which has in turn deprived more needy member of our community
the opportunity of securing decent and above all, legal accommodation."[229]
170. We explored this situation with the Minister,
the Rt. Hon Keith Hill MP, in oral evidence. One of his officials
told us:
"The responsibility for this lies with the
Department for Work and Pensions and they know there is a problem.
They have been lobbied quite successfully by councils and they
are undertaking research into the scope of the problem and I think
- although I would not want to speak for them - they are seeking
to identify what solutions they can offer. […]. I do not
know about the timescale."[230]
The Minister promised to send us a note on the subject.
The note explained that:
"We [the Department of Work and Pensions]
have come under increasing pressure to address the issue of the
anomaly in treatment of Gypsy and Traveller sites. In order to
work up a set of proposals we need relevant information. However
data is not currently available on site rent levels throughout
the country, nor do we know how site rents are made up. We have
recently commissioned a research project to look at how the current
arrangements are working and consider the feasibility of a single
set of housing benefit controls to apply to all Gypsy sites. We
aim to get this project up and running later this month [September
2004], and expect it to be reporting next spring. […].[231]
Whilst any change to the housing benefit rules should clearly
deliver appropriate expenditure controls, we are aware of the
fact that they should not undermine the wider Government policy
to provide incentives for Gypsies to use authorised sites."[232]
171. Whilst the decision of the Department of Work
and Pensions to set up a research project is a positive step forward,
the length of time it has taken to reach this stage is unacceptable.
Lord Eric Avebury wrote to the then Minister at the Department
of Social Security, Angela Eagle MP, on February 20, 2001. Her
successor Malcolm Wicks MP wrote back on June 20, 2001. In a subsequent
letter of July 24, 2001 he acknowledged the anomaly and said that
the rent service would be "carrying out an internal review
of current rent officer practices to ensure that a consistent
approach is being adopted towards Agency policy and DWP legislative
requirements".[233]
On September 22, 2002, Malcolm Wicks MP said that:
"[…] officials are currently looking
at an option to change the way that rent officers determine local
reference rents for those on Gypsy sites to take account of the
fact that such sites tend to incur higher maintenance and management
costs. In doing so, we also need to ensure that the current anomaly,
whereby district and county council sites are treated differently
for Housing Benefit purposes, is addressed."[234]
Further letters were exchanged between Lord Avebury
and the Department of Work and Pensions and on November 11, 2003,
Chris Pond MP wrote that while he "very much regret[s] the
difficulties that the delay in addressing the issue] is causing
to both tenants of county councils and to the county councils
themselves, unfortunately, pressures elsewhere continue to mean
that we have not been able to progress the work as quickly as
we would have liked".[235]
172. Lord Avebury told us:
"It seems incomprehensible that the DWP
should be going to such lengths, and taking four years to reach
a solution to make sure that local authorities do not cheat the
benefit system. Of course, local authorities which operate Gypsy
sites should not charge more than is necessary to cover their
costs, and for the avoidance of doubt it would be desirable to
issue guidance on what may be included in the costs to cover the
overheads as well as direct operating costs. This would eliminate
the need for bringing the apparatus of rent officers to bear with
the imposition of reference rents on all local authorities running
Gypsy sites. But if they did charge more than was necessary to
cover their costs, the surplus would be used in long-term maintenance
of sites and would thus reduce the necessity for the authorities
concerned to rely on the ODPM's refurbishment grant, so that no
net increase in public spending would arise. It is suggested that
guidance would be a sufficient check on the charges made on all
local authority Gyps sites, which have never been said to be excessive
in the past. In the meanwhile, letting this matter drift has meant
that all the while, county councils are being deprived of income
which could and would have been applied for the benefit of the
Gypsy and Traveller communities. If district and unitary authorities
are now to be treated in the same way, their income too is certain
to be reduced, and no public purpose is served by the extra bureaucracy.
Mr Chris Pond MP argues (letter of December 8, 2003) that it has
never been considered reasonable for central Government to simply
reimburse local authority's expenditure without some form of check
on the amount being spent, but for the last seven years, this
has been the case on district and unitary authority sites without
any evidence that public funds have been wasted or mis-spent."[236]
The National Association of Gypsy and Traveller Officers
suggest the anomaly could easily be solved:
"In the Social Security Administration Act
1992, an amendment may be introduced to redefine 'local authority'
to include county councils. This redefinition would enable Gypsies
residing on county council sites to qualify for housing rebate,
which would remove the requirement for a rent service determination
and ensure a level playing field across the whole of the Gypsy
site accommodation." [237]
They warn:
"At a time when the Gypsy and traveller
population is increasing and available provision is decreasing,
it would appear that to place these unfair barriers against equality
of determination causes hardship on this ethnic minority. In some
quarters the fact that the settled community are entitled to housing
benefit based on an assessment undertaken by district councils
seems to penalise the travelling community and the provision of
Gypsy sites by county councils."[238]
173. Many residents on Gypsy and Traveller sites
are in receipt of housing benefit. On county council sites the
rent service sets the level of benefit provided. We have received
evidence from many groups that the levels set are lower than the
rents charged because of the system the rent service uses to assess
comparative local rents. Site residents are themselves responsible
for paying the difference although we have been told many are
unable to meet the extra costs and may be forced back onto the
road unless the debt is erased. The county council are then left
to absorb the rent arrears and other charges. This situation is
at odds with Government policy which seeks to move Gypsies and
Travellers off the roadside onto approved sites. The Government
have been aware of this anomaly since 2001. We are shocked by
the procrastination and lack of co-ordination between Government
departments over this issue. The Department for Work and Pensions
has now set up a research group, expected to report in summer
2005 to "consider the feasibility of a single set of Housing
benefit controls to apply to all Gypsy sites". This is unacceptable.
The issues are well known; the National Association of Gypsy and
Traveller Officers has already undertaken a research project examining
site rents and has proposed a series of recommendations to address
the current anomalies. Lord Avebury has also conducted extensive
work on this issue and is well placed to offer advice. In the
response to this report the Government must respond to the recommendations
made by the National Association of Gypsy and Traveller Officers
and Lord Avebury. They must also explain why it has taken so long
to tackle this issue, and why it is necessary to conduct additional
research. Finally, they must outline a timeline of action, including
proposed amendments to current legislation.
218 The Centre for Urban and Regional Studies at the
University of Birmingham, The Provision and Condition of Local
Authority Gypsy/Traveller Sites in England, 2002 , pg 36 Back
219
HC 63-III, Ev 95, [Derbyshire Gypsy Liaison Group] Back
220
HC 63-III, Ev 83, [National Association of Gypsy and Traveller
Officers] Back
221
HC 63-III, Ev 100, [Lord Eric Avebury] Back
222
HC 63-III, Ev 100 [Lord Avebury] Back
223
HC 63-III, Ev 83 [National Association of Gypsy and Traveller
Officers] Back
224
Q230 and 251 [Ian Cairns, Gypsy Liaison Officer, Somerset County
Council] Back
225
Ev 24 [Somerset County Council] Back
226
Ev 94 [LGA] Back
227
HC 63-III, Ev 83, [National Association of Gypsy and Traveller
Officers] Back
228
HC 63-III, Ev 83, [National Association of Gypsy and Traveller
Officers] Back
229
HC 63-III, Ev 67, [Hughie Smith, President of the Gypsy Council
(Romani Kris)] Back
230
Ev 81 [Cottenham Parish Council] Back
231
In a written answer to a Parliamentary question on 25 October
2004, Chris Pond MP, Secretary of State for Work and Pensions,
commented that the project would now report in summer 2005. Back
232
HC 63-III, Ev 107, [Department for Work and Pensions] Back
233
HC 63-III, Ev 100 [Lord Avebury] Back
234
HC 63-III, Ev 100 [Lord Avebury] Back
235
HC 63-III, Ev 100 [Lord Avebury] Back
236
HC 63-III, Ev 100 [Lord Avebury] Back
237
HC 63-III, Ev 83, [National Association of Gypsy and Traveller
Officers] Back
238
HC 63-III, Ev 83, [National Association of Gypsy and Traveller
Officers] Back
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