Housing and Planning Bill — House of Lords, 2016-04-13
Topic: Housing
Jeremy Hugh Beecham (Labour, Centre-left): My Lords, this amendment would provide that revenue from high-value sales should be retained by the local housing authority rather than be transmitted, as required by the Bill, to the Secretary of State, and should be used to provide replacement affordable housing for rent in the same local authority area I shall begin by referring to the position in my local authority, Newcastle, which will be pretty much echoed up and down the country. Shelter conducted an estimate of the number of high-value council properties. Of course, we do not quite know what the definition of "high value" will be, particularly in the light of today’s government amendment but, as a working position, it estimated that Newcastle’s housing stock, which is something in the low 20,000s, would contain about 1,650 high-value properties. On that basis, and on the Government’s approach, it would look as though 82 properties a year might become vacant. I do not know quite what high value in Newcastle would come to, but if it were something over £100,000, at the least we would be looking at something like £10 million a year for several years being paid over to the Government. It might be higher than that, but I do not think it would be much lower. That would be replicated across the country, so the question arises of how this scheme would work and what its impact would be I turn for some guidance on that to the impact assessment—so called—which deals with Clauses 67 to 77 on this issue. It defines the problem under consideration as something that will require the Government to "determine high value", about which we have heard something today, "and a formula which will be used to calculate the payment each stock owning local authority is required to pay" There is a footnote at the bottom of the page in very small print, which states: "We are engaging with local authorities and are currently in the process of updating data that will be used to help inform the high value threshold, which will determine how much individual councils will need to pay" That document was issued in January, and we are now in April. I wonder whether the Minister could give us any indication of how much progress has been made in updating that data and whether and how soon the Government will be able to indicate even a sample of what "high value" would be and how many houses might be affected. The rationale for intervention is given in the mantra: "Councils should effectively and efficiently use their resources … it makes sense to sell high value vacant houses to release the value locked up in them" The document point outs that: "165 local authorities own a total of around 1.6 million council homes" Then the impact of the intervention is described: "The main impact will be on stock holding local authorities as they will be required to make a payment to the Secretary of State based on the value of the high value vacant homes they own. By managing their stock more efficiently, and selling vacant housing", they can release the value. Of course, it is not just when the property is sold that councils will be required to make a payment; they will be required to do so in advance of any sale, which one might have thought was a somewhat peculiar process There is a summary of benefits and costs, and it is a pretty minimal description. The document says: "Local authorities are not benefitting from their high value vacant assets" They have already said that in the report. It goes on: "This policy will release the value of such assets to use in providing more housing", but without any indication of how much would be released, how much new housing would be provided and what kind of housing that would be. It goes on to say: "The process also provides some flexibility for local authorities to decide which vacant properties they sell … Data will be used to inform the setting of the high value threshold"— we await indications of what those data will be— "and the assumptions underlying the calculations in the determination … The policy requires the sale of high value assets which may have some impact on the total stock that a local authority holds" By definition, that is going to be the case. This is hardly a detailed analysis of the impact of the Bill. Then it says: "Local authorities are likely to incur some costs associated with the sale of vacant property" Again, that is a pretty massive understatement with no figures attached to it. It continues: "Consideration will be given to the deductions that should be made from the payment" How very kind, but there is no indication of what consideration the Government are likely to give or at least what its outcome is likely to be. It then says, and remember that this is an impact assessment: "A portion of the receipts will be used to provide more housing, reflecting housing need" There is no indication of what portion, or indeed any definition of "housing need" Then the impact assessment makes the one specific reference, which of course is timely in view of the impending election of a London mayor, that in London the provision must require that, "at least two new affordable homes are provided for each vacant high value home that is expected to be sold in the relevant year" It may be purely coincidence that London has been chosen for this definition, but a cynic might point out that it is the only firm commitment revealed in the whole impact assessment. So it is pretty deplorable after all this time, unless the Minister has some information that she can convey to us either today or before Third Reading, that we do not know what the impact is going to be, how much money or how many homes are involved, how many councils will be affected and what a "high value" is. It is a case of Parliament, and in particular your Lordships’ House, being asked to sign a blank cheque to the Government and, frankly, one written in invisible ink. It is highly unsatisfactory, and unless the Minister can produce some assurances about when we are going to get information, we will be left enacting legislation without any clear idea of what will be involved in terms of costs or, crucially, the numbers of replacement houses and where they might be built. In my submission, that is not a satisfactory outcome of a process that we have been engaged in for some months now in both Houses. I beg to move.