Mr Clive Betts
MP for Sheffield South East · Labour · United Kingdom
“I wholeheartedly welcome the Foreign Secretary’s statement, both its content and its tone. I would like to ask about his discussions with our colleagues and allies in other countries who are looking to implement similar sanctions.”
“I offer two congratulations: first, to my right hon. Friend and constituency neighbour, the First Secretary, on her well-deserved promotion—I am sure she will do an excellent job. Secondly, I congratulate her and the Prime Minister for their real commitment to devolution, which I have wanted to see for an awfully long time.”
“I apologise for the fact that—as I have explained to you, Madam Deputy Speaker—I will have to leave straight after my question to chair Westminster Hall. I thank my right hon. Friend for doing this very challenging piece of work. I think that the theme of fairness, for the people who need benefits and for taxpayers, is right.”
“On the other hand, so many constituents with really serious conditions get turned down for PIP, and can get it only if they struggle through the appeal system, sometimes without any help at all. So the system is not fair to anyone at present.”
“When the previous Government let the contract, we were in a situation in which procurement could not properly take account of the past record of companies, and I understand that the Government have now changed that.”
“I will dive very deeply into the question, Madam Deputy Speaker. The Chair of the Committee sends his apologies for his absence; he is presently in a Committee meeting.”
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“As in all our reports, the Committee takes a localist approach, giving councils the freedom to tailor their approaches to meet local needs—hence we urge the sector to take the lead in this matter. The Committee makes three overarching recommendations and a number of specific points. I will refer initially to the three overarching points. First, local government needs to lead the change in partnership with central Government and other partners. We commend the work undertaken to date by many councils and the Local Government Association. We endorse the sector-led approach to supporting council action since it is an effective means of spreading good practice while tailoring procurement to local needs.”
“Councils are cutting costs and reducing the burdens on those doing business with them, strengthening links with the delivery of community objectives, improving risk management, and taking steps to reduce fraud. We also found, however, that evidence of progress was patchy across the country. That is extremely worrying given that councils face the challenges of managing increasingly complex procurement operations, while at the same time, for obvious reasons, they need to make cost savings and preserve the quality of services for their communities. The Committee makes a number of recommendations in the report about how the sector and its partners, including central Government, can work together to ensure that councils step-up their efforts to commit to delivering first-class procurement.”
“(Select Committee Statement): I am delighted to present the sixth report from the Communities and Local Government Committee on local government procurement, HC 712. I thank the Backbench Business Committee for giving us this opportunity, as well as our special adviser, Colin Cram, and the second Clerk to the Committee, Sarah Coe, who led the work in producing the report. Local government spends about a quarter of its annual expenditure—some £45 billion—on procuring goods and services. At a time of financial constraint in local government, my Committee thought it timely to examine how successfully councils across the country are delivering value for money and meeting wider objectives. I am pleased that we found evidence of much good progress in many local authorities.”
“Absolutely. That was the theme right the way through the inquiry. There is a lot of good work out there and the best way to persuade local authorities to change is to show them another local authority that is doing things in a better way. That is why the LGA is key to delivering improvements; with many of our reports, that is probably not the case. We are looking to the LGA and the Department for Communities and Local Government to work together to set up a taskforce to bring examples of good practice together and disseminate them to councils up and down the country.”
“The Select Committee did not consider that particular proposal, but it is interesting. We recommend that the LGA sets up a taskforce and I am sure that that is something it can consider. Indeed, every council should consider it. One of our recommendations is that once a year there should be a report to the whole council on a local authority’s procurement practices, with specific attention given to how local authorities deal with small businesses and local businesses as part of their commissioning approach. That is something individual councils could consider, too.”
“We did not look specifically at food contracts—obviously, with £45 billion of spending, there is a wide range of contracts—but we found that local government commissions and procures about 40% of its expenditure from small businesses. That is a higher percentage than for central Government, so there are many good examples. We recommended that councils should have an annual report. That would allow them to consider how to deal with small businesses and tailor commissioning to enable them to compete for contracts; that is an important element of the recommendation. That should be embedded in council policy from the beginning. Councils should not just suddenly think, “Oh dear, that contract hasn’t really given small businesses a chance” after it is let. It should be embodied in the policy of the council from the beginning.”
“Some of the councils that we studied took a robust and considered approach to benefits for their local economies, while others did not do quite so well in that regard. Again, it is necessary to learn from good practice. We asked the Government to carry out a post-legislative review of the Public Services (Social Value) Act 2012, which gives councils certain responsibilities, to consider its impact on local economies, and to extend its social value requirements to smaller contracts, which it does not currently cover.”
“We also considered ways of enabling whistleblowers to draw attention to problems anonymously, which would probably involve a role for the National Audit Office.”
“My hon. Friend has raised a number of points. Let me deal first with his point about transparency. We support open-book accounting, but I accept that that means opening the books to the councils themselves rather than a wider agenda. Freedom of information is often not applied to every aspect of a contractor’s dealings. We urged councils to consider making that so, but did not direct them to do so because ultimately this is a local matter and they should be free to make that decision. As for whistleblowing, we concluded that a clear system that contractors would be required to adopt should be written into the contracts. There should be no effect on a whistleblower. They should be protected as part of the contract. If any whistleblower raises concerns with a contractor, the information must be passed on to the council.”
“I am afraid that I cannot provide a great deal of further enlightenment. We did not receive much evidence relating to the environmental elements of local government commissioning. What was clear to us, however, was that, although cost is obviously very important to councils at this time, other important issues, such as the quality of service, economic and social added value, and indeed environmental impacts and implications, should be considered by councils as part of their procurement strategies.”
“It was approved by the whole Committee, and that is the basis on which we always try to work.”
“Absolutely. We believe that that is now a matter for central Government—the Department for Communities and Local Government and the Cabinet Office, whose commissioning academy could be used to increase skills in local authorities—and for the Local Government Association. Many examples of good practice will be sector-led. A number of councils are doing excellent work across the political spectrum in encouraging contractors to take on apprentices as part of an overall council policy, but the practice would be a great deal more effective and beneficial if it were adopted by other councils. That aim is at the heart of our report. I thank all members of the Committee for their work. I believe that the report makes many good recommendations that will enable us to make progress.”
“Further to that point of order, Madam Deputy Speaker. A local government Minister—the Under-Secretary of State for Communities and Local Government, the hon. Member for Bristol West (Stephen Williams)—was asked to attend, but he thought that the statement would be made earlier, and he had a ministerial commitment outside the House. He rang my office to apologise and I accepted his apology. The Deputy Chief Whip is representing him on the Front Bench, but obviously the Deputy Chief Whip could not speak.”
“Different Acts of Parliament are cross-referenced in new Acts and it is very difficult for any professional, let alone any lay person, to get their head around the situation. A professional landlord might understand some of it, but small landlords and tenants probably do not. We therefore called for a review of the potential consolidation of legislation, but the Government rejected that, which is disappointing because I think it would have helped to simplify things. We were not asking for more regulation; we were asking for simpler regulation. There is a difference. The Government could have scrapped some regulations if they had gone about it in a different way and that may have earned some brownie points for Ministers past and present.”
“There are two areas on which we have not reached agreement and to which we need to pay more attention. The first is the flexibility of local authority powers to raise standards and to deal with rogue landlords in particular—I will say more about that in due course—and the second is the regulation of letting agents, on which the Government have not gone as far as the Committee wanted them to. I will explore that as well. On raising awareness, in Germany it struck me and, I think, other Committee members that tenants and landlords seemed to understand the rules and their responsibilities. That is not always the case in this country. Our report notes that there is a bewildering array of legislation and regulation relating to the private rented sector.”
“May I place on record the Committee’s thanks to the hon. Member for Hertford and Stortford for the courteous, assiduous and highly knowledgeable way in which he always approached us and our deliberations? There was a great deal of consensus right from the beginning. The Government have subsequently produced their “Review of property conditions in the private rented sector”, which includes many of the Committee’s ideas. Indeed, having initially dismissed our recommendations for mandatory carbon monoxide and smoke alarms in private rented homes and for five-yearly checks of the electrical installations, the Government are now consulting on them. Of course, consulting does not necessarily mean agreeing, but at least it is a step in the right direction, which we should recognise and welcome.”
“We identified five main areas to concentrate on in our report: awareness of rights and responsibilities; the standards of properties and of how they are managed; effective regulation of letting agents, which we received an awful lot of evidence about; new tenancy models looking for longer-term agreements and greater security; and, in passing—because we had already done a report on this the previous year—increasing the housing supply. When it came to taking evidence, the then housing Minister—the hon. Member for Hertford and Stortford (Mr Prisk), who is in his place—was, as usual, very open to ideas and he welcomed, both in his initial statement in the House and in the Government’s response, many of our recommendations, as indeed did the then shadow housing Minister, my hon. Friend the Member for Birmingham, Erdington (Jack Dromey).”
“We learned that there were good standards in the private rented sector that we ought to seek to emulate in this country. Tenants and landlords had an awareness and understanding of rights and responsibilities that is perhaps not always shared in this country. There was an equilibrium between demand and supply to which we aspire but recognise realistically that it will take some to achieve. Those factors create a very different market indeed.”
“We also observed that it is changing in that it is home to a wider range of households, particularly families with children who might, in other times, have chosen to be in a different sector but are now looking for a different housing experience, and particularly for more security. When people with children change their home, that often means changing schools, and that creates substantial disruption to family life. When we went to Germany, we saw a very different situation that we are probably not likely to get to any time soon. People literally have tenancies for life; many of us could not quite get our heads around that. Someone with a tenancy in Germany has it for life and can pass it on so that their family members can succeed to it.”
“We chose the subject of the private rented sector not because of any particular initiative that the Government were proposing at the time but because of the sector’s increasing importance to our constituents. According to the latest figures for 2012-13, 18% of households now live in the private rented sector. That growth did not suddenly happen following the banking crisis of 2008; it had been taking place before that over a period of time. Indeed, it has been the only growing housing sector since 2002, when owner-occupation started to fall as a percentage of households. That is an interesting fact. The Committee saw the growth of the private rented sector not as a short-term issue but as something that is likely to continue in the longer term.”
“It is a pleasure to speak about the report on the private rented sector by the Communities and Local Government Committee—its first report of the 2013-14 Session. The report was produced through the Committee taking formal evidence in a number of sittings. Some of those featured more informal discussions and some involved landlords and tenants together, which was interesting. There was a visit to Leeds to look at how the council was operating with regard to the private rented sector, and a visit to Germany to look at the sector in a very different sphere of housing circumstances. On behalf of the Committee, I particularly thank Christine Whitehead, who was the Committee’s special adviser for the inquiry, and Kevin Maddison, the lead specialist from the Committee staff working on the inquiry.”
“There are problems in relation to local authorities wanting to act against a property if the tenant is elderly, but not if they are young, and landlords can get confused about an authority requiring them to do work simply because they have changed tenants. It is certainly worth looking at that complication in the new guidance and new methodology.”
“That is entirely in line with what the Committee recommended, which was to try to make things easier, particularly for people who do not easily understand legislation and regulations, and to have something that is easy to operate. We felt that that would really help not only tenants, but many landlords, particularly non-professional, occasional landlords who have a few properties and would welcome such an approach. We asked for a review of the housing health and safety rating system. Again, it is valued by many professionals, but it is very difficult to understand for many landlords, let alone for tenants. I do not think that the Government are prepared to go so far as a wholesale review, but we note that they are now trying to produce guidance for tenants and to update the methodology.”
“The hon. Gentleman is absolutely right and I thank him for putting that clearly on the record. That is exactly what the Committee agreed. Some of the changes will be incremental and there will be opportunities for either this or a future Government to come back and look at the totality of regulation and legislation, which I think would be helpful for everyone involved. On raising awareness, the Government have accepted some of the recommendations. The Committee called for easy-to-read fact sheets and model tenancy agreements. The Government have already produced a draft tenants charter and we look forward to their model tenancy agreement.”
“There was general agreement about how to bear down on the really bad landlords without putting extra burdens on the good ones, and about how, at a time of financial constraint for local authorities, to enable them to take action against such private landlords and ensure that they can use their resources and recover their costs.”
“We did, but I will come on to rents later, if I may, because that is a separate issue. We did refer to that matter, but the main point of our report concentrated on standards, which is what I am trying to address now. As we all know, the reality is that some of the worst standards in housing are in the private rented sector. That does not mean that every such property is bad and we should not give all private landlords a bad name, but as well as some of the worst properties, the sector has some of the most vulnerable occupiers, and that juxtaposition should really worry us. Some landlords simply want to sit and do nothing, while others blatantly break the law and think that they can get away with it, and we particularly want to bear down on them.”
“I do not want to say that every landlord who lives at a distance is a bad one—that would be wrong—but living further away can clearly make it more difficult for tenants to contact landlords and get instant responses about problems, particularly if landlords do not use a reputable agent to help them manage the property on the spot. We will come on to agents a little later. The issue is about local authorities having the powers to act against not merely individual properties, but areas with collections of properties in poor condition, which is probably the sort of area to which my hon. Friend refers.”
“Absolutely. The Committee was very supportive of the legislation on HMOs, particularly local authorities’ use of article 4 powers to try to restrict the growth in their numbers in areas where there were so many that they had begun to dominate, as well as of the Government’s position. There is cross-party consensus on that issue.”
“Yes, certainly. One of the messages right the way through the report is that there is good practice among local authorities. As with many things that we consider, it is a challenge to ensure that the good practice is spread to all authorities and that that knowledge is available. It should not be just the Select Committee, the Government and the Opposition telling councils what to do; they should be able to look at the good work that is being done by colleagues in other councils and replicate it.”
“No, we did not look at extending the properties that are covered by that responsibility of local authorities. We did look at the powers that are available to local authorities in respect of the approach to the licensing and registration of landlords in their area, and I will come on to discuss that.”
“It has clearly come from somewhere, however, and it may not be unwelcome if it gives local authorities another set of powers and another way to deal with rogue landlords who are causing problems. If those landlords who persistently cause problems with individual properties have to become part of a mandatory registration scheme, that could be perhaps not a complete response to the Committee’s request, but at least a helpful step in the right direction, as we suggested.”
“They said no to mandatory accreditation schemes and no to a review of the flexibility of selective licensing. The Government’s recent consultation document does include changes to selective licensing, but they are talking about tightening the criteria, rather than making them more flexible. That seems to be a retrograde step. All our evidence suggested that that was too cumbersome and does not work, and authorities that want to make it work find it difficult to make it happen. We are apparently consulting on a landlord-specific, rather than property-specific, licensing or accreditation scheme, which the consultation document refers to as a suggestion from the Communities and Local Government Committee, although it was not.”
“However, we were told by landlords and tenants that the problem is that it is the good landlords that join such schemes. They said, “It’s those landlords down the road you want to get hold of and they’re not going to volunteer.” The selective licensing approach tends to be cumbersome, time-consuming and bureaucratic, and the criteria are very restricted. The Committee therefore asked whether we could relax the criteria and make them more flexible so that local authorities could engage in selective licensing if they wanted to. We also asked whether, in a more general sense, a local authority could have an accreditation scheme that was mandatory, so that it would include all landlords, including those who do not want to join. Unfortunately, on both issues, the Government’s response was not as helpful as we would have liked.”
“The Committee received evidence of concerns in some local authorities that the squeeze on their resources was affecting their abilities in respect of the private rented sector. We tried to look at how authorities could deal with the challenges that they face most effectively with the resources that they have. One thing that we looked at was licensing. On balance, the Committee did not come down in favour of a national licensing scheme. That is essentially because, over a number of reports, we have tended to be localist and to believe that local authorities should be allowed to make such choices for themselves. We went to Leeds, which has a very good accreditation scheme, under which there is good training and advice for landlords, which the landlords really appreciate.”
“Precisely, and the Committee’s view was very simple. These arrangements are—or at least should be—for local authorities to determine. Local authorities know their own areas and there is a big difference between one local authority and another. Even within London and within local authorities themselves there are big differences, so we hope the Government will recognise the value of giving a local authority a range of powers to tailor requirements to the needs of a particular area.”
“I will give way to my hon. Friend the Member for Islington North (Jeremy Corbyn) because my hon. Friend the Member for Hyndburn (Graham Jones) has had two goes already.”
“However, if landlords are to accept a tenancy period of three or even five years, they must have a way of getting the tenant out, rather than waiting until the end of the tenancy period. Shelter has accepted this and the Government have established a working party on it. That is being looked at as a quid pro quo. Shelter accepts that; it is not only landlords associations that have been pressing for it.”
“We must also consider how to get letting agents to recognise that they should be advising on that—letting agents often have a vested interest in regular reviews of tenants and tenancies because they make a profit and receive a fee every time they do it. We must also deal with the fact that many lenders prevent landlords from having a tenancy of more than a year. Nationwide is now, I think, prepared to accept a three-year tenancy, which is a good step forward, and the Government are trying to bring lenders together to try to make that change happen. I entirely accept the point made by my hon. Friend the Member for Islington North about retaliatory evictions when tenants complain.”
“Yes, and the Government are consulting on retaliatory evictions as part of their consultation document, which is to be welcomed. One other issue that the Committee report dealt with that we must consider is how to encourage longer term tenancies. Families in particular want greater security. They may not want to be in the private rented sector, but if they are there and have a property they like, they probably want to be there for five years rather than six months. Considering how we can change the culture—that is what it is, as much as anything else—to get landlords and tenants to understand that there are possibilities within the framework of the existing assured shorthold tenancy for a tenancy longer than six months or a year, is a step forward.”
“That goes back to the fact that authorities are strapped for cash, as many are, and have limited resources. If a landlord is found guilty, the court should award the authority the full cost of the action. Sheffield, my local authority, advised me the other day that it has brought five successful prosecutions of landlords in recent months. On each occasion, it has not been given its costs back—it got back roughly 50% of its costs in total. That is not acceptable. We ought to put pressure on the courts—perhaps the Minister’s colleagues in the Ministry of Justice could do this—to recognise that, when effective action costs money and the landlord is found to be responsible for and guilty of an offence, the costs should be returned to the authorities. Finally, there are two other points. On letting agents—”
“The Committee called for more flexibility in licensing—perhaps that covers my hon. Friend’s point. The Committee recognises the need for more powers and action in one or two other areas to improve standards. We call for the possibility of fixed penalty notices, so that local authorities can deal with less serious offences at relatively low cost. The Government are consulting on the range of measures that should be available. We also say that, when a landlord lets a property in an unfit condition and is prosecuted, it should be possible to claw back any housing benefit paid or any rent paid by an individual. We are pleased that the Government are consulting on that proposal. One additional matter that the Committee did not get into—we might have a look at it in the autumn—is what happens when landlords are taken to court.”
“To summarise, the Committee is pleased with many of the Government’s responses. We have concerns on the points I have made and are looking forward to Government action. The Committee will monitor that and look to the Government’s proposals to stimulate extra building in the private rented sector and other sectors to deal with the real problem in housing: the shortage of supply.”
“Yes. On letting agents, the Committee is pleased to see a lot of demand for regulation. We are pleased that the Government are introducing a redress scheme, but are disappointed that the code of practice backing it up will not be mandatory. There ought to be more Government action on the lack of transparency in relation to fees charged by letting agents. They should not leave it to the current legislation, which needs tightening. Finally, on rents—this point has already been made—the Committee are not in favour of rent control. We believe that introducing rent controls is a blunt instrument that is more likely to curtail investment in the sector. Things should probably be done on local housing allowances, which could sometimes artificially inflate rents. There was evidence from Blackpool on that.”
“One of the other major problems facing private sector tenants is the actions of letting agents. There was widespread support for the Government’s commitment to a redress scheme, and for the promise made on 20 May last year by the then Housing Minister to have one code of practice to underpin it. However, the Government now say that they cannot go ahead with one code of practice and must rely on voluntary codes, with agents being part of various bodies and with a test of reasonableness in other cases. Why are we not going to have one code of practice? Is it because the Government did not take the necessary powers under the legislation to enable them to do so?”
“I was talking the other day to Tony Stacey, the chief executive of South Yorkshire housing association, which is a very well run local association in Sheffield and the surrounding areas. He pointed out not only that its arrears are going up, but that it is spending £200,000 more on helping to advise its tenants and on collection. The National Housing Federation says that when those extra costs of arrears and collection are added up nationally, £1.5 billion of development opportunities will be lost as a result of this Government’s welfare reforms.”
“Following on from that question, the Minister must know that in assessing entitlement to income-related benefits, entitlement to disability benefits is not taken into account. The one exception to that policy is discretionary housing payments. It is specifically in the guidance that local authorities can take them into account and means-test them in the way that he described. Will he change and reissue the guidance, so that this one area where disability payments are means-tested is removed from the scene?”
“I draw the Minister’s attention to what he told the Committee on 27 January. He said that the system is changing from one based on allocation according to need, which now will be reflected merely in the base business line rate in 2013-14. Basically, the Government will distribute grant according to local authorities’ ability to raise their own resources. Is that not a fundamental change?”
“My hon. Friend has made a very important point. I come back to the comments the Minister made in his appearance before the Select Committee on 27 January. I asked whether the principle of the grant settlement, which equalises differences in needs and differences in resources between authorities, had been effectively eroded. The Minister said yes, there had been a big shift away from the begging bowl structure of the past to an incentive-based structure for the future.”
“I do not believe they are, but if they are in the Government’s mind, they have to justify that as the basis for extra cuts for local authorities. Let us look at the distribution of unfairness among local councils. We heard an interesting analysis earlier from a number of my hon. Friends who asked the Minister questions. Essentially it boiled down to this. Councils with the highest grant have had the highest cuts; those councils had a higher grant because they had higher needs; therefore, councils with the highest needs have had the highest cuts. That is the logic of the situation.”
“Around 20% of the grant to local authorities will be cut in this settlement and next year’s. That is far bigger than the cut to other Departments. Even by the Government’s own figures for spending power, the cut over those two years, excluding the ring-fenced grants for public health and the better care fund, is around 10%. Again, that is much bigger than for other Departments. The Local Government Association has calculated the real-terms cuts in Government support to local authorities over the course of this Parliament at 40%—more than twice that for other Departments. Are the services that people receive from their councils—road sweeping, refuse collection, public health, checking food hygiene, local leisure centres and parks—really less important than the services provided by all other Departments?”