Housing and Planning Bill

Written evidence submitted by Bristol City Council (HPB 111)

Contribution to the Core Cities response to Public Bill Committee

Housing and Planning Bill

Response from Bristol City Council

PART 1: NEW HOMES IN ENGLAND

Chapter 1: Starter Homes

Clause 4

The Bill imposes a general duty to promote the supply of ‘starter homes’ when carrying out relevant planning functions (clause 3). These functions include preparing Local Plans. A further specific duty is imposed in relation to decisions on planning applications (clause 4) whereby planning authorities will only be able to grant planning permission for certain residential developments if specified requirements relating to ‘starter homes’ are met. Clause 4 states that these requirements are to be set out in regulation and such requirements could include the provision of a particular number (or proportion) of ‘starter homes’. These duties will likely necessitate the bringing forward of policies through Local Plans to secure ‘starter homes’ from certain types of residential development.

Any future policy relating to starter homes within Local Plans will need to be consistent with national policy. Guidance in the National Planning Policy Framework (NPPF) relating to housing delivery and viability will be relevant. Relevant paragraph are summarised as follows:

(paras. 47, 50 and 159)

local planning authorities should:

· have a clear understanding of the housing needs of their area through the preparation of a Strategic Housing Market Assessment (SHMA);

· use their evidence base to ensure that their Local Plan meets the full objectively assessed needs for market and affordable housing in their housing market area;

· plan for a mix of housing based on demographic/market trends and the needs of different groups;

· identify the size, type tenure and range of housing required in particular locations reflecting local demand;

· set policies for meeting affordable housing need where identified.

(paras. 173and 174)

· the sites and the scale of development identified in a plan should not be subject to such a scale of obligations and policy burdens that their ability to be developed viably is threatened;

· to ensure viability, the costs of any requirements likely to be applied to development should, when taking account of the normal cost of development and mitigation, provide competitive returns to a willing land owner and willing developer to enable the development to be deliverable;

· the cumulative impact of standards and policies should not put implementation of the plan at serious risk and should facilitate development throughout the economic cycle.

To meet these NPPF requirements local planning authorities will need to retain discretion for setting the proportion of starter homes in any future Local Plan policy. This proportion will have to be based on local housing need and demand, as evidenced through the local authority’s Strategic Housing Market Assessment, and, local viability testing.

Any regulation that seeks to prescribe a certain number or proportion of starter homes may conflict with this local evidence and risks undermining national policy. The demand for starter homes and the viability of developments that provide them will vary across the country. In the circumstances, the number or proportion of starter homes that should be provided should not be set at the national level through regulation. Any reference to the provision of a certain number of starter homes through regulation should therefore be deleted from clause 4.

Clause 6

The Bill makes provision for the Secretary of State to make a compliance direction if a local authority is failing to comply with its starter homes duties and has a policy contained in a local development document which is incompatible with these duties. The compliance direction will direct that no regard is to be had to the policy for the purposes of any determination to be made under the planning acts.

The National Planning Policy Framework (NPPF) provides guidance on delivering a wide choice of homes and the use of housing evidence in plan-making. Paragraphs 47, 50 and 159 are of relevance. In particular, local authorities should use their evidence base to ensure that their Local Plan meets the full objectively assessed needs for market and affordable housing in their housing market area. In line with this approach local authorities should be able to prioritise the delivery of those types of housing identified in their Strategic Housing Market Assessment through their Local Plan policies. This may involve policies that reflect a greater identified need for tenures other than starter homes including affordable housing (as defined by the NPPF) or private renting. Such policies should not be deemed incompatible with starter home duties as set out in the Bill. In light of national policy requirements a meaningful definition of what constitutes an incompatible policy should be provided either in the Bill or through Regulation.

Chapter 2: Self-build and custom housebuilding

Clause 9

The Bill inserts a new duty into the ‘Self-build and Custom Housebuilding Act 2015’. It requires local authorities to grant sufficient suitable development permissions on serviced plots of land to meet the demand for self-build and custom housebuilding in their area. The demand for self-build and custom housebuilding is to be evidenced by the number of people on the register held by local authorities under the 2015 Act.

National Planning Policy Guidance (NPPG) explains how the need for certain types of housing and the needs of different groups can be identified. Specific guidance is provided in relation to people wishing to build their own homes, in particular…

‘Plan makers should, therefore, consider surveying local residents, possibly as part of any wider surveys, to assess local housing need for this type of housing, and compile a local list or register of people who want to build their own homes.’

NPPG: Housing and economic development needs assessments, para. 21: How should the needs for all types of housing be addressed?

In line with this approach local authorities should have greater discretion in terms of how they establish demand for self-build and custom housebuilding in their area. This could include the use of surveys or other methods alongside the statutory register. It is particularly important that local authorities are able to effectively separate aspiration from true market demand. This may not be possible through the use of a register alone. Clause 9 of the Bill should therefore be amended to give local authorities greater flexibility and should not identify the register exclusively as evidence of demand.

PART 2: ROGUE LANDLORDS AND LETTING AGENTS IN ENGLAND

Chapter 2: Banning Orders

We are in favour of the introduction of banning orders and banning order offences. However, we would be grateful for further definitions of what a ‘rogue’ landlord or agent is.

What are the offences which will lead to a Banning order? These are to be specified in regulations, which means, it is difficult to determine if there is a proportionate response without knowing what offences are to be included. How will this link with the existing fit and proper person provisions in the Housing Act 2004? At the moment we would not automatically consider a single Housing Act offence to make some-one not Fit and Proper but this could lead to a banning order.

A minimum term is prescribed (6 months), but there is no indication on what would be a maximum term. Is this to be indefinite?

There will be a financial penalty for breaching a banning order, with £5,000 for each 6 months. A large letting agency may decide to take the chance as it is likely they will be able to make more from continuing the business.

Banning orders appear to focus on penalising rather than prevention. Banning orders can only be made within 6 months of a relevant conviction; we would prefer that this is changed to ‘before the conviction is spent’.

Banning orders can only be made when a person was a residential landlord at the time of offence. It would be better if this was at the time of application of the banning order as it would mean that criminals could be prevented from becoming a landlord or letting agent. This would be appropriate in cases where the landlord may be a company run by or connected to a person with convictions.

Chapter 3: Database of Rogue Landlords and Lettings Agents

We are in favour of the introduction of this database; in particular it is important that it can be used for statistical purposes.

Duties and powers to include: Can we include landlords and agents for any other reason or does it have to be only for banning order offences? Guidance is required on when to include, this hopefully will explain criteria that must be considered before inclusion.

Two years spent on the list may be longer than many landlords’ and agents’ time for their convictions to be spent.

Chapter 4: Rent Repayment Orders

We are in favour of the introduction of RROs in these cases.

There are quite a wide range of offenses covered by the proposals (unlawful harassment and eviction) as well as licensing offences and improvement/prohibition order offenses. It is disappointing that these can only be applied for by the LA where Universal Credit payments are made rather than for any offence. It does however have an exceptional circumstances option which the landlord can ask the First Tier tribunal to consider.

For Improvement Notices, Prohibition Orders and unlicensed properties under the Housing Act 2004 we are very pleased that there does not have to be a conviction, just proof beyond reasonable doubt that the offence had been committed. We are also pleased that we will be able to assist tenants in making their claim for RRO.

S32 refers to a ’landlord under a tenancy of housing’. We’re unsure what this means.

S41. It would be better that Rent Repayment Orders were as is an order of the court so further applications to the court to enforce the debt not necessary.

S43 should include the provision for councils to charge a fee for helping a tenant make an RRO application.

PART 4: SOCIAL HOUSING IN ENGLAND

Chapter 2: Vacant high value local authority housing

Clause 62 - 68

Linked to the Right to Buy for housing association tenants (part 4, chapter 1: implementing the right to buy on a voluntary basis), and the requirement for Local Authorities holding an HRA to help fund this by making payments to the Secretary of State. These payments will be calculated with reference to an authority’s high value housing stock with the expectation that this stock will be sold as it becomes vacant. The receipts raised from the sale of high value council stock will be used: to pay off the debt associated with these properties; provide for replacement of the sold stock; cover the cost of discounts for housing association tenants; and finance a Brownfield Regeneration Fund.

Detail as to how this will be implemented will come after. We are therefore unable to make a full judgement without this detail and especially without financial figures. Our concerns however are:

- Most councils, including Bristol, were already (as part of an active asset management strategy) reviewing high value homes and considering their future / selling to invest in other homes

- In Bristol the high value homes are our acquired properties.

- Loss of these receipts is a further loss of income to the HRA and compounds the impact of lower than planned rents. We have raised c. £3m p.a. through sale of these types of homes and were relying on this income in our business plan

- It will impact even further our ability to build new homes – as these receipts were a key source of income and one of the few flexible sources (ie without so many government rules)

- Using a formula to calculate how much we have to pay to treasury is more flexible than actually requiring every high value home to be sold – as here may be reasons we want to keep some high value homes (e.g they are the only 4+ bed stock in an area, meet specific housing need, etc)

- However, there is also more risk in this approach and we would appreciate being consulted on how this formula be calculated to ensure there is correlation between payments made to Treasury and the level of homes sold/receipts raised.

- Nationally organisations are already struggling with 1 for 1 replacement under Right to Buy. With RTB to housing associations and these sales of high value homes you will effectively lose 2 affordable homes (the sold RP property and LA property sold for compensation). In many areas, including Bristol, it is unlikely the receipt from sale of a high value home will be sufficient to compensate RP & replace the sold RP home. Additionally, in many areas there is no land to build replace  homes where high value homes are sold – that might be at a very local level (e.g. in Bristol no more affordable housing in a significant number of wards) or at a wider areas level (e.g. sold homes in north Bristol may only be replaced in outlying estates or south Bristol ).

Chapter 4: high income social tenants: mandatory rents

Generally we are very concerned that the Pay to Stay scheme is likely to set up significant disincentives to work, particularly for tenants in low paid, temporary or insecure work.  This kind of work, which is often taken as a first step into the labour market (including by those who were previously long term unemployed) is often at minimum / living wage levels.  The policy intention appears to be for the ‘high earner’ threshold to be maintained at £30,000 per year per household.  If that is the case, then within 2-3 years of the introduction of Pay to Stay, a couple in full time work earning the national living wage will be defined as a high earner household, despite earning the minimum it is legally possible to earn.  

The previous government’s Behavioural Insights Team (also known as the Nudge Unit) had the aim of getting incentives right in order to change behaviour to the outcome that the you are seeking.  The way that this initiative has been set out is likely to ‘nudge’ behaviour in the opposite direction to the government’s overall policy intention, by unfairly penalising the very behaviour which government policy is seeking to encourage.  It also, despite being labelled as a ‘high earners’ policy is likely to impact significantly on the working poor, and is likely to generate many cases of working families suffering significant financial losses, in effect penalised for ‘doing the right thing’.  If the additional money raised has to be paid to the exchequer (as is the intention) rather than reinvested in housing and local communities then this will only increase the perception that this group is being unfairly and disproportionately targeted.

We are also concerned that the scheme will be costly to administer and takes a highly bureaucratic and wasteful approach to identifying the small number of social housing tenants who could afford to pay a higher rent.  We would suggest that a targeted approach using data matching with HMRC records would be simpler, more effective and cheaper ie for HMRC to match the tenancy data which we already supply to DCLG against their records, and advise local authorities of tenants with taxable incomes above the threshold.  We would also suggest that it would be simpler and fairer if the Pay to Stay threshold were linked to the higher earnings tax threshold ie £40,000.

The operation of income thresholds (including how the scheme can support incentives to work)   

We would prefer a graduated approach to the single threshold originally proposed.  We believe that a single threshold, especially if set at the relatively low level of £30,000 per year, would present serious affordability issues for many tenants.  However, a graduated threshold or taper would be more complicated to administer and our costs would therefore be higher. 

In terms of the operation of income thresholds, a taper would be fairer than multiple thresholds, which would retain some of the work disincentives of a single threshold.  However, it would probably be slightly more complex and more expensive to operate.   Even with a taper or multiple thresholds, the scheme is likely to be a disincentive to work.  If a tenant loses a significant proportion of any extra that they earn, and probably incurs extra costs too (eg travel) then they may well decide it simply is not worthwhile.   The scheme would need to be fairly reactive to changes in income, especially for those in short term insecure work or on zero hours contracts.  This could otherwise be a major work disincentive eg if working for a few weeks or months might increase the rent for up to a year.  There should also be a range of triggers which will prompt a reassessment of income, for example death of a household member, loss of a job or other significant change of circumstance.

The process for obtaining market rent figures also needs to be specified – will this be by reference to local market evidence, will some form of external verification be required or would standard locality figures be used?  This is important as the tenant will have a right of review and this needs to be fair, transparent and consistent.  Whichever method is used the costs of obtaining market rent figures should be taken into account. 

The whole of the increased rent level should be eligible for Housing Benefit or Universal Credit housing costs or this could be a significant work disincentive.  An increase in rent will make some households eligible for Housing Benefit for the first time.

Evidence of administrative costs

It is important that the costs which we are able to retain reflect the actual costs of administering the scheme.  The Housing and Planning Bill as currently drafted gives us great cause for concern as it implies that a notional figure may be used ie ‘the regulations may provide for assumptions to be made in making a calculation, whether or not those assumptions are, or are likely to be, borne out by events’. 

It is very difficult to give an estimate of likely administrative costs based on the very limited details currently available of how the scheme will work.  As the consultation paper says, there are processes in place within the council that could be adapted for Pay to Stay purposes, as income verification is a key part of the Housing Benefit process.  The cost per transaction for Housing Benefit (new claims and changes of circumstances) in Bristol is around £36.  Although this includes appeals and overpayment recovery, this gives a guide figure for administrative costs for pay to stay.   The proposed administration costs in the DCLG Impact Assessment, based on Bristol’s share of national local authority stock, equate to a cost per (non Housing Benefit) tenancy of £18-24, assuming that receipt of Housing Benefit will effectively ‘passport’ the tenant to the social rent level.

 Even though very little detail is given in the Housing and Planning Bill, as a minimum the scheme would have to include income verification, data matching, measures to discourage and combat fraud, dealing with enquiries, market rent setting, rent accounting and audit processes for the additional rent raised, and processes for internal and external review.  We would suggest that the costs of Housing Benefit administration be used as the starting point for assessing the likely costs of administering the scheme.  Based on the known administrative costs for Housing Benefit we would suggest a minimum of £20-25 per tenancy as the likely cost for implementing the pay to stay policy. 

Informal indications from DCLG have been that we will have to apply income verification to every tenancy, and potentially apply the market rent where we are unable to verify the tenant’s household income.  If this is the case, then costs will be higher, as we will incur admin costs for every tenancy, not just the small minority to whom a market rent (or variation of) will apply.  We should therefore be able to offset our full annual admin costs for all tenancies against the total annual additional market rent collected. 

The consultation paper refers to processes being in place within councils (ie Housing Benefit administration) that could be adapted for Pay to Stay purposes.  However this will not necessarily be the case within a few years if Universal Credit is rolled out as planned.   With Housing Benefit we already know about the incomes of the majority of our tenants; under Universal Credit this will not generally be the case.  This will mean even greater administrative complexity and additional costs. 

We would expect the number of tenants affected by this policy in Bristol to be a small minority.  It would seem disproportionate, administratively wasteful and unnecessarily expensive, to apply a means test in every case when the vast majority of tenants will not be affected.  As we already supply tenancy data to DCLG, we suggest that it would be simpler for HMRC to cross match known high earners against tenancy records.  Local authorities could then take targeted action to raise rents in the relatively small number of tenancies affected.  This would reduce the administrative costs and ultimately provide a greater net gain to the exchequer. 

PART 5: HOUSING, ESTATE AGENTS AND RENT RECHARGES: OTHER CHANGES

Clause 84 (1): In section 8 of the Housing Act 1985 (periodical review of housing needs)

Incorporating the needs of Gypsies and Travellers in the general assessment of ‘sites where caravans can be stationed’, will result in consideration for the separate needs for the Gypsy and Traveller community to be removed.

Incorporating the housing needs of this ethnic group with those of Park Home owners and ‘New Travellers’, will result in a disproportionate impact on future pitch provision for this ethnic group.

Considering the housing needs of this client group (who are the most disadvantaged ethnic group by a large margin, in the country) in with the general housing needs assessment will disproportionately impact on future pitch provision for this community.

Clause 84 (2): Deletion of sections 225 and 226 (accommodation needs of Gypsies and Travellers).

Currently each LA must carry out an assessment of accommodation needs of gypsies and travellers residing in or resorting to their districts and are required to prepare a strategy of the meeting of such accommodation needs, which includes the provision of sites on which a caravan can be stationed.

The proposed changes will remove the protected characteristics of Gypsy and Travellers from the proposed new needs assessment and will only include, travellers who move from ‘place to place’ when assessing future accommodation needs. Travellers are a broad term and will include a whole group of people who

The characteristics of the Gypsy and Traveller Community are that they normally live together as a close family group and as a result, tend to have large families with children all living together. These large family groups, if they are not in transit, will be removed from the overall accommodation needs assessment. This will result in ‘family groups’ being dispersed due to the lack of future pitch provision or not being incorporated in the assessment of need, as they get older and need their own caravan.

The proposed change will also result in Gypsy and Travellers who occupy bricks and mortar accommodation being excluded in the calculation of future pitch provision in each LA area.

The proposed change will incorporate the needs of only a small proportion of this community who are in transit, and will result in a significant under provision of site pitches, for this ethnic group.

Clause 85: Licences for HMO and other rented accommodation: additional tests

We support the proposed changes. We would welcome any further changes to make the procedure for licensing and deciding whether applicants are fit and proper if these simplify the process for both LAs and applicants.

Clause 86: Financial penalties as an alternative to prosecution under the Housing Act 2004

We support the proposal, and would encourage government that the scope of the financial penalty should be reviewed in such a way to include all offenses under the Housing Act 2004, Building Act and various regulations including the HMO Management Regulations and those covering property licenses, and any other Act relevant to our work.

This is also a very useful tool to deal with more minor indiscretions such as failing to return certificates.

Clause 87: Provision of tenancy deposit information to local authorities

We fully support LAs having access to data contained in the various tenancy deposit protection schemes. The information should be made available free rather than at a cost to the LA.

PART 6: PLANNING IN ENGLAND

Permission in principle and local registers of land

Clause 102

The Bill gives the Secretary of State the power, by a development order, to grant ‘permission in principle’ to land that is allocated for development in a Brownfield Register, Development Plan Documents and Neighbourhood Plans. In addition, the Bill gives the Secretary of State the power to set out, in a development order, the process that local authorities must follow in order to grant ‘permission in principle’ following an application. In both cases, the development orders will also set out what type and scope of development could be granted ‘permission in principle’.

As the principle of the development is established through the granting of ‘permission in principle’ and would not be subject to conditions, the type and scope of development that is granted under this process and defined in the development order will need to be carefully considered. The type and scope of development set out in the development order should reflect the different levels of impact that different forms of development have on their surroundings and whether the land is subject to certain constraints. In the circumstances, consideration should be given to exemptions from ‘permission in principle’ for certain types of development and for development on certain land or in certain areas. This may be where the potential impacts of the development require more detailed consideration through a full planning application or where the land or location may be unsuitable for development. Such an approach should be consistent with the General Permitted Development Order which identifies circumstances where development is not permitted.

Circumstances where automatic ‘permission in principle’ should not be given, and, where a ‘permission in principle’ application should not be submitted, should include, but not be limited to, the following:

· development which is subject to an Environmental Impact Assessment;

· development which is likely to have a significant effect on a ‘European site’;

· development in areas of high flood risk;

· development on contaminated land;

· development on article 2(3) land as defined in The Town and Country Planning (General Permitted Development) (England) Oder 2015;

· development on article 2(4) land as defined in The Town and Country Planning (General Permitted Development) (England) Oder 2015;

· the land on which the development is located is or forms part of:

- a site of special scientific interest;

- a safety hazard area;

- a military explosives storage area;

· the land contains a scheduled monument;

· the land contains a listed building or is within or forms part of the curtilage of a listed building;

· the land is within the Green Belt.

Clause 103 of the Bill, relating to the keeping of registers of previously developed land, allows the Secretary of State to prescribe the description of land and any criteria which the land must meet for entry in the register. Such prescriptions could include that any land must not be affected by physical or environmental constraints that cannot be mitigated. Such land could not be entered on the register and therefore would not be subject to automatic ‘permission in principle’. This provision within the Bill indicates that the Government does not intend that all land would be suitable for housing. The same restrictions applied to entry to the register should form the basis of the Government’s considerations on the type and scope of development that could be granted ‘permission in principle’.

In addition, any process that local authorities must follow (as set out in a development order) in order to grant ‘permission in principle’ following submission of an application, should include a formal process of consultation as with all other planning applications.

Clause 103

The Bill makes provision for the Secretary of State to make regulations requiring a local planning authority to prepare, maintain and publish a register of land, the intention being that such a register should identify ‘brownfield’ land that is suitable for housing development. In addition, the regulations may require that one part of the register could list land which the local planning authority considers is suitable for a grant of ‘permission in principle’ and which has been through a process of consultation.

It is important that such a list is made the subject of proper public consultation. Provision should be made in the regulations for this consultation to take place. In addition, the regulations should state that local planning authorities must take into account any representations made to them as a result of the consultation in preparing such a list.

PART 7: COMPULSORY PURCHASE ETC

Clause 111: Rights to enter and survey land

A power of entry would be an enormous step forward. Where considering a CPO to bring an empty property back into use the power to require entry an early stage would be an effective way of impressing on an owner that the local authority is committed to pursuing the case and has more chance of prompting the owner to take their own action to bring about re-occupation - avoiding the need to continue with the expensive and time-consuming CPO process. It would also alert the acquiring authority of any potential adverse issues arising. We agree with the notice period for the single power of entry for survey purposes prior to a compulsory purchase order.

Clause 120: CPOs: time limits for notice to treat or general vesting declaration

A point of clarification is needed on 120(2) - is the operative day the day that the CPO is made or confirmed? Reading through the bill it looks like it is CPO confirmation, this looks as if it gives us more time to vest a property as it states "GVD may not be made after the end of the period of 3 years beginning on the day on which CPO becomes operative". At the moment we have to vest the property within 3 years of confirmation.

Provision for applying for a warrant would also be a great advantage when establishing whether a CPO should be made on a long term empty property where there is housing need.

Clause 120 & 128: CPOs: Notice of vesting and notice for taking possession following vesting

There are points at which the bill suggests a lengthening of the CPO process which we think is unnecessary and certainly unhelpful for us: s 122 - at the moment we have to give not less than 28 days to vest a property under the GVD (we give approx. 6 weeks) the bill wants this changed to 3 months; and s128 – the bill wants a change from 14 days to 3 months where out thought is that something like 28 days seems more appropriate.

Clause 130: CPOs: Making a request for advance payment of compensation

S130 gives the opportunity for advanced compensation payments: although we accept that advanced compensation payments are advantageous to home owners affected by large schemes who will need the advanced payment to assist in re-location, for smaller schemes such as individual empty residential properties this may put pressure on the acquiring authority’s budget as the payment will needed before the property is vested and sold.

December 2015

Prepared 3rd December 2015