The Housing Bill: The final lap

Originally published on April 29 on Inside Edge 2, my blog for Inside Housing

The worst excuse for a Bill that I can remember in 25 years of writing about housing limps back to the House of Commons next week.

The Housing and Planning Bill’s tail is not quite between its legs as all the key elements are still there and the Commons will reverse some changes. But it’s been gutted in the Lords, with two more defeats for the government on Wednesday, and this morning (Friday) it’s the subject of withering criticism by the all-party Public Accounts Committee.

The PAC inquiry into the extension of the right to buy to housing association tenants was unusual because it involved legislation that was still going through parliament. And it came to be less about the voluntary deal than about the other measures in the Bill to pay for it and the claim that all homes sold will be replaced on at least a one for one basis.

MPs on the all-party committee are, to put it mildly, sceptical about this. They heard from the National Audit Office that replacements under the existing Right to Buy would have to quintuple to meet the ‘one for one’ promise.

The DCLG made it quite clear in its evidence to the committee that ‘one for one’ does not mean ‘like for like’: ‘as with the reinvigorated Right to Buy, new homes can be a different size and in a different areas, and may cost more to rent’.

On top of that they may not be for rent at all but starter homes under a part of the Bill the PAC did not consider. The PAC says the department should publish detailed data on all replacements.

However, the committee reserves its most withering criticism for the way the Bill has been implemented. It endorses complaints from peers and others about the lack of detailed costing and demands that the department publishes a full impact assessment to accompany the secondary legislation. This should include the impact on housing benefit and universal credit and the financial impacts on local authorities including the extent of transfers between areas.

The MPs also say the DCLG should publish a full analysis of how the policy will be funded by the time of Autumn Statement 2016. Effectively they endorse the concerns of the all-party Communities and Local Government Committee and others that the sums do not stack up.

Most embarrassingly for the DCLG, the report takes apart the evidence of its senior officials. Pressed about the funding gap, they could only say the intention was for the policy to be fiscally neutral. Even if it was fiscally neutral, they confirmed that only meant for central government. The department could not say if forced sales would undermine local authority balance sheets.

And even though others have suggested alternatives for delivering the government’s objectives:

‘The Department said it had not considered any alternative options for policy design, as it had a manifesto commitment to implement the policy as it stood. Even on its own terms, however, the Department did not know the size of the costs and benefits it expected from the option it had chosen. The Department revealed it did not yet “have a feel” for how many housing association tenants would take advantage of the extended Right to Buy, and thus did not know how big a contribution this policy would make to either of its strategic objectives.’

The ‘feel’ may turn out to be less than expected if Inside Housing’s recent report is any indication, especially when housing association tenants realise they have a right to a discount not a right to buy.

However, the point is that as the back of a fag packet Bill enters its final lap this is just one key detail that we still don’t know. PAC chair Meg Hillier even trumps my original metaphor with her comment that: ‘We are not talking about a ‘back of an envelope’ calculation—there is no envelope at all.’

The PAC report will mean red faces at the DCLG but you don’t have to read too closely between the lines of the Third Reading debate in the Lords on Wednesday to decide that the embarrassment is not all (or even mainly) of its own making.

Baroness Williams, the communities minister piloting the Bill through the upper house, has been forced to apologise again and again for the lack of detail, return again and again with concessions and clarifications, and suffer defeats again and again on key elements.

There were two more defeats on Wednesday on forced sales and Pay to Stay. Peers inserted an element of ‘like for like’ as well as ‘one for one’ into the Bill with an amendment allowing local authorities to retain receipts to build replacement social housing where they can demonstrate a need.

On Pay to Stay, they approved another amendment establishing a triennial review to uprate the income thresholds by the rate of CPI inflation. That’s a small but crucial change as the impact assessment assumed they would not be uprated, making it inevitable that even people on the minimum wage would be caught over time.

Like all the other defeats at the Report stage (see herehere and here), these could yet be reversed in the Commons on Tuesday next week and come back for ping pong in the Lords on Wednesday. So it’s also worth noting confirmation of more government concessions that were previously hinted at. These include: putting one for one replacement outside London on the face of the Bill; exclusions from higher-value sales for rural areas with a particular difficulty in replacing them; local discretion on starter homes on rural exception sites; and hints that more benefits will not count as Pay to Stay income.

The most important, though, was on fixed-term tenancies. Government amendments will give local authorities discretion to offer tenancies of up to 10 years and potentially longer for families with children. Guidance will set out the criteria for the length, with councils able to consider longer-term provision for households where someone has a disability or a long-term illness and for older people. Where there is a child in the household, councils will be able to grant a tenancy that lasts until the child is 19.

These are significant changes but it remains to be seen how much they will soften the overall impact of the Bill. On that last change, for example, the end of security of tenure for new council tenants was not in the Conservative manifesto or the original Bill but dropped in at the last minute in the Commons. As Tory peer Lord Porter pointed out, it also creates the absurd situation where families will get a succession of 19-year tenancies for each child:

‘A fixed-term period that is not for life when a family lives there is silly, as the family will not invest in the house, the garden or the community. Although the Government have moved a heck of a long way, I am still disappointed that we have not done what we should have done, which is to exclude families from this altogether.’

Based on that there may still be more changes to come. But that begs the question of who is really in charge here. The defeats for the government in the Lords fall broadly into two categories: those that lessen the impact  (for example by raising the Pay to Stay thresholds for tenants) and those that give more discretion to local authorities.

On the face of it, the latter go completely with the grain of the ‘localism’ proclaimed by the DCLG ever since 2010 and with increased fervour since Greg Clark became secretary of state in 2015. However, they also risk reducing the funding available for pay for starter homes and extending the Right to Buy.

Throughout the Bill’s passage through the Lords as much has been happening outside the chamber as in it. This was made clear by Lord Kerslake as he returned to a two-part amendment he raised at the Report stage that covered on forced sales. He said that until 5pm on Tuesday he did not expect to be speaking on this but a government amendment covered only the first part on one-for-one replacement and not the second on like-for-like social housing:

‘Since 21 April, constructive discussions have taken place with Ministers and their officials on the drafting of a new amendment. This discussion has taken place with the close involvement of the noble Lords, Lord Best and Lord Porter. As at lunchtime yesterday, I understood that we had reached agreement on the form of words for such an amendment. Sadly, when the amendments came through at 5 pm last night, that crucial part of the amendment was missing.’

He went on:

‘I should say at once that the Minister has acted with great integrity on this matter, as indeed she has on the whole of the Bill. The Secretary of State, Greg Clark, has been equally open and responsive, and I recognise that the time between Report and Third Reading has been short. I also suspect that the responsibility for this turn of events lies elsewhere in government.’

Who could he mean by the bit I’ve put in italics? The genius behind the original proposals has now shipped out of No 10 but those were very different and in their own terms relatively consistent. It looks like it’s the department run by the man next door that is really in charge of this excuse for a Housing Bill.

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