| Previous Section | Index | Home Page |
4 Nov 2009 : Column 299WH—continued
When my officials established the formula review group, they worked closely with the Local Government Association to ensure that a large mix of representatives
from different councils was in the group. With that approach, a national view could be obtained and potential impacts on the range of local authorities considered. There is a representative from London Councils in the group, and I believe that the issue in London will be represented fully. No individual authority is represented and I do not believe that an exception should be made for Haringey. That is not to say that we did not take individual local authorities' views into consideration.
As the hon. Lady will be aware, the head of school funding from the Department for Children, Schools and Families attended the Haringey schools forum conference last year to hear the forum's opinions on the subject. Over the summer, we encouraged interested parties to comment and contribute to the review. We made it known through our website and interaction with partners that we were open to receiving papers from those interested in the review for consideration by the formula review group.
I want to explain why the NUT is not in the group. The Government's preferred method of engaging with trade unions is through the work force agreement monitoring group, and unfortunately the NUT is not in that group because it has not signed the work force agreement.
I am conscious that time is ticking by. The hon. Lady referred to interim measures that could be brought in now. It is important to say at this point that I understand that the number of schools in deficit in Haringey in 1999-2000 was 28, but in 2007-08 that number had reduced to 15. I point that out just for information. The issue faced by Haringey is a long-term one and we are considering, as I have set out, what to do for the future. However, we are not in a position at this stage to make any additional funding available in the meantime.
In early 2007, we consulted on the school funding arrangements for 2008 to 2011, which we published before our announcement for the settlement in November 2007. We received a clear message that the stability and predictability of the spend plus method was right for this period, but that we should carry out a review. It would not be right to reopen the funding settlement now, after we have made it clear to all local authorities that we will not-giving them confidence that they can plan within their means. To reopen the settlement would destabilise the system and we will not do that. Haringey has had, like all other local authorities, an indicative budget for the three years since 2007 to enable it to plan.
I commend the hon. Lady for her proactive role in initiating today's debate. It is on an issue affecting other local councils, and we are working to ensure that these matters are considered and to see whether a suitable solution can be put into practice. It is essential that every local authority receives the right amount of funding to support its schools. Through the work that we are carrying out in the dedicated schools grant review with our formula review group, we are ensuring that that need will be met.
John Cummings (in the Chair): Order. We now move to the next debate. Unfortunately, the Minister is not here yet, but we can continue.
Selective Licensing Schemes
4.35 pm
Phil Wilson (Sedgefield) (Lab): It is a pleasure to serve under your chairmanship, Mr. Cummings. The issues that lie beneath the surface of this subject are of great concern for many of my constituents. I believe that the need to extend selective licensing has both positive and negative connotations. Selective licensing schemes have been introduced in several areas of the country and are established where there is low take-up of housing, a high proportion of private landlords, and antisocial behaviour. There are two schemes in my constituency: one is in Dean Bank in Ferryhill and the other is located in a part of Chilton. The two villages are about a mile apart and are former coal-mining communities.
Both schemes have been established for more than a year and were made possible by the Housing Act 2004. Schemes need first to be sanctioned by the Secretary of State. The powers under the Act are primarily intended to address the impact that poor-quality private landlords and their antisocial tenants can have on the wider community. If a local authority designates an area as subject to selective licensing, all the private landlords in that area must obtain a licence, and if they fail to achieve acceptable management standards, the authority can take enforcement action.
I have said that selective licensing schemes have both negative and positive connotations-negative because the perception is that the area has antisocial behaviour problems, but positive because the local authority and community want to sort out the problems. Other constituents, in Trimdon Station, and a group in Chilton want the scheme extended to their streets, because they believe that selective licensing offers protection. I believe that the initiative does that, but it is still early days to see how successful the original schemes have been, although evidence from the agencies involved shows that progress is being made.
During the summer recess, I attended many meetings with residents, the police, environmental health officers and local government officers about problems arising from antisocial behaviour and unkempt residential properties. I met residents in Dean Bank, Chilton and Trimdon Station. Many were angry. They felt isolated and powerless to deal with the problems that confronted them in their everyday lives in their communities. There were major similarities in the situations faced by all those residents. They all lived in former colliery terraced housing, where private landlords owned many of the properties. Many of them were absentee landlords who did not seem to care who they were letting their properties to or what those people got up to. As a consequence, antisocial behaviour and a local environment that was growing dishevelled became a major problem. Once-proud communities felt threatened and not in control.
The problem in Dean Bank is in an area where selective licensing is in place and which is dominated by terraced housing. In Chilton, the problem was situated away from the selective licensing scheme area in the village and was focused on the Arthur street, Albert street and Prospect terrace area of the village. All three streets have early 20th-century terraced housing. In
Trimdon Station, the problem is also focused on three streets: Station Road East, Station Road West and St. Aidan's terrace.
The history of the areas is similar. We are talking about areas of early 20th-century terraced property, with low demand. Owner-occupiers move out and housing prices stagnate, offering investment opportunities for private landlords. Problem tenants move in, standards decline and then there are empty properties and house prices go down. In a nutshell, that is the history that residents have lived in recent years.
To show some evidence of that, I asked Durham county council to provide me with statistics on the make-up of the ownership in the three areas. The statistics showed that of the 1,082 properties in question, 408, or 38 per cent., were held by private landlords. Of those, 51 per cent. lived outside County Durham or lived abroad. In some streets, such as Davy street in Dean Bank, 53 per cent. of the houses were owned by private landlords, the majority living outside County Durham. In St. Aidan's terrace in Trimdon Station, 11 of the 25 terraced properties were owned by private landlords, the majority living outside the county. In Arthur street in Chilton, 50 per cent. of terraced properties were private lets, again with the majority of landlords living outside the county.
The county council listed for me the reported problems, which included, for example, groups congregating on the streets drinking alcohol, fighting, criminal damage, rubbish accumulating in backyards, unsightly properties and poor property conditions. The problems seem to be emanating primarily from properties that are privately let.
I believe that the relative cheapness of the terraced housing in question has attracted a high proportion of private landlords to those three villages. Regionally, about 8 per cent. of the housing stock is privately rented, although nationally the figure is about 13 per cent. In the area around Sedgefield it is 5.5 per cent., but in the areas of Chilton, Dean Bank and Trimdon Station, 38 per cent. of private properties are privately let, the majority by landlords who do not live in County Durham, let alone in those villages. Antisocial behaviour is a significant problem for local residents, and is higher there than in the surrounding areas. That link needs greater attention. How can a landlord who lives in another part of the UK, or abroad, care about the community in which his property is situated? On balance, I do not think that he can.
That does not mean that all private landlords are bad-I do not believe that for a minute. However, there must be a problem at that end of the privately rented sector if it is deemed necessary to have selected licensing schemes that are mandatory for the landlord to sign, and through which fines of £5,000 can be imposed on a landlord who does not follow the rules.
Selected licensing places a duty on private landlords to act responsibly. Part 3 of the Housing Act 2004 provides that the local authority may declare a licensing scheme for privately rented accommodation in an area, as long as certain conditions are met. The area must be, or be likely to become, an area of low housing demand, and it must have a significant level of privately owned houses that are let on short-term arrangements. Furthermore, the local housing authority must be satisfied that the introduction of such a scheme, together with
other measures, would lead to an improvement in the social or economic conditions in the area. Such a scheme could be used in an area that is experiencing significant or persistent problems caused by antisocial behaviour, and where the private landlords are not taking appropriate action to combat the problem, and in places where the local housing authority is satisfied that the scheme's introduction, together with other measures, would lead to a reduction or an elimination of the problem.
Before declaring a selective licensing area, the local housing authority must consider whether other courses of action that could deal with the issues effectively have been tried. It must ensure that the scheme is consistent with its housing strategy and its approach to homelessness, empty properties and antisocial behaviour. It must also consult landlords, tenants and residents associations.
In an area with a licensing scheme, most private landlords or management companies would be required to obtain a licence in order to let or manage residential property. The mandatory licence conditions would require the holder to meet the following conditions: to take reasonable steps to deal with antisocial behaviour; to provide annually a gas safety certificate to the local housing authority where applicable; to keep furnishings and electrical appliances in safe condition; to keep smoke alarms in good working order; to supply tenants with written terms of occupation; and to demand references from prospective tenants. The local authority may also set any other conditions that it deems necessary.
If the licence holder commits an offence or is in breach of the licence conditions, they can be fined a maximum of £5,000. Non-compliance would also allow the local housing authority to revoke the licence. The LHA may apply for an interim management order in respect of a licensable property that remains unlicensed. That would last for a period of 12 months, and a final management order must be applied for if the LHA still feels that it is unable to grant a licence. Individual problems at an address inside or outside a licensing area would be addressed by the use of a single interim management order. The licence would normally be valid for a maximum of five years, and may be varied by the LHA if there has been a change of circumstance.
The council will reference prospective tenants, assist the landlord in dealing with problem tenants or antisocial behaviour, provide evidence to assist with an eviction process, and facilitate a private landlords' forum to provide a platform for consultation, discussion and the sharing of good practice. As the county council reminded me, selective licensing is only one measure and other tools can be used when tackling problems with private landlords. For example, Durham county council is developing a voluntary accreditation scheme that will be made available to any private landlord who rents out property in the county. The scheme aims to assist landlords in improving their management standards and property conditions, which in turn will benefit tenants and local residents.
The council will offer benefits to accredited landlords, which will include assistance in dealing with problem tenants in the form of joint visits and the collation and production of evidence for legal action. The county council can assist landlords in referencing prospective
tenants, and it is developing a system to be used county-wide, such as the traffic light system that is currently used in some areas. The council is also considering a good tenants scheme, which would enable anyone looking for private rented accommodation to apply to become recognised as a good tenant. That would help them to move forward quickly should a suitable property become available.
The council wants to co-ordinate its approach to private landlords by setting up such initiatives and using the full range of powers that the Government have laid down in legislation. It works closely with the police and uses environmental health provisions to help tidy up certain areas. Many of the initiatives that I have mentioned are voluntary, and I want to ask the Minister whether he agrees with them, and whether he will look into how such schemes could be made compulsory, to ensure that private landlords are licensed, not selectively, but before they can let properties.
There are three categories of private landlord. First, there are good landlords who take their responsibilities seriously. Secondly, there are bad landlords who, whatever someone does, are not prepared to play the game because they frankly do not care. The largest group are what have become known as amateur landlords. They are neither good nor bad, but they lack the necessary skills and sometimes have a job other than that of looking after the properties they let. A general licensing scheme would be useful. It should not involve only paying a fee; there should be some qualification or something in the provision that proves that the landlord knows their rights, duties and responsibilities.
The Rugg review highlighted the fact that 73 per cent. of landlords are either individuals or couples. It also described the private rental sector as a cottage industry. The number of properties that most landlords own is small-44 per cent. of landlords who are individuals or couples own only one property. A further 27 per cent. own two to four properties.
Social trends determine that those who own properties for rent have often inherited the property, have found difficulty in selling it before moving out or have the property as a spare following a partnership formation. However, the majority trend is the investment motive. In 1993-94, the landlords of 48 per cent. of English dwellings viewed their property either as an investment for capital growth or as rental income. By 2006, the proportion of those viewing property as an investment had grown to 70 per cent.
In recent years, there has been an increase in the proportion of landlords who are new to the business. In 2001, 53 per cent. of landlords who were individuals or couples had been letting for less than 10 years. In 2006, that figure had grown to 60 per cent. Those are the reasons why, in my view, a general licensing scheme for private landlords should be introduced.
The evidence suggests a growing trend in absentee landlords. The purchase of a property is a capital investment, which makes some purchasers not landlords but property investors and speculators. They tend to hand over their properties to a managing agent, which opens up a whole new can of worms because managing agents are not regulated at all. A general licensing scheme should not just involve receiving the licence for a fee. I believe that a potential or existing landlord should prove his or her competency in letting out property.
They must show that they are honest and of good character, and that they know what is expected of them and understand the law. If the landlord is an absentee, they must demonstrate how the property and tenant will be managed in their absence.
I also fervently believe that where a substantial amount of the housing stock in a given area, such as Dean Bank, Chilton and Trimdon Station, is dominated by private landlords, those landlords have a moral responsibility not only to their properties and tenants, but to the wider community. As part of any licensing scheme, the landlord should state what positive role they intend to play in the community.
It is not good enough simply to say that property is a revenue source for an individual landlord. There might be a market in housing, but it should not be a market where standards are driven down in our engagement with our local communities. The high level of mobility common to the private rented sector means that tenants are less likely to settle for long periods or to contribute to the local community. High levels of mobility can lead to void periods between lettings, which can destroy neighbourhoods, particularly when voids last for significant periods.
More worryingly for both tenants and their neighbours, absent or irresponsible landlords who do not manage their stock can lead to continuing disrepair issues. That has an impact not only on housing conditions for tenants, but on the quality of the external environment for the local neighbourhood. Those are all characteristics of the three areas in my constituency that I mentioned.
Constituents complain to me about the antisocial behaviour of some of the tenants in private lets. That is not a specific problem of private lets, but it is prevalent in the areas that I have mentioned. On occasion, tenants have been evicted by a social landlord, or have dysfunctional family backgrounds. More often than not, they land up in privately let accommodation. If the regulation is tightened, as it is under selective licensing and tenant reference schemes, private landlords can choose not to offer the individual a tenancy. If the individual cannot find a house from either a social or private landlord, where do they go? They are homeless.
When a family or individual is a nuisance to themselves and the local community, we should build on the Prime Minister's announcement at the Labour party conference on the need for family intervention schemes, such as the Dundee families project. Under such a scheme, problems can be resolved in a safe and caring environment, so that the individual can be reintegrated in the community.
Fundamentally, there is a case for the private rented sector and those who operate in it to show some understanding of the public good. They are providing homes for people. How can we expect tenants to have respect for the property that they rent if, as is often the case, the private landlord has no respect for his property either?
The combination of a lack of social housing and house prices that are beyond the reach of many people, especially the young, has swelled the number of low-income households seeking to rent in the private sector. As demand grows, so does the problem. The present situation seems unsustainable, particularly as it is closely linked not only to perpetuating poverty and deprivation, but to the cycle of homelessness.
| Next Section | Index | Home Page |