Localism Bill

My Lords, I thank the noble Baroness and the noble Lord for their contributions. It is more complicated than I thought. The amendment is clearly about additional facilities requested by the tenant, yet the points made by the noble Baroness have been about solar panels and, basically, energy. Clearly the amendment is about any form of enhancement required by a tenant. All I would say on the detail is that my noble friend Lady Hanham has shown me a letter that she wrote to the noble Baroness, Lady Hollis, on 9 August offering to discuss this matter. She may not have got the letter or something may have gone wrong, but this offer has not yet been taken up. My noble friend Lady Hanham would be happy to discuss the matter and that could well be a helpful way forward. I cannot give a commitment on where that would lead, but I think it would be a good thing if that offer were taken up. I cannot accept the amendment because it would allow landlords complete freedom to charge rents above the target rent for particular properties in order to fund the cost of additional facilities. This would lead to an unacceptable rise in the housing benefit bill. There are two types of landlord to whom the amendment could apply: local authority landlords and housing associations. Both sectors are able to exercise some flexibility over rent setting but are subject to important constraints. In the case of local authority landlords, there is the ““limit rent””, which is the maximum that the Department for Work and Pensions is willing to pay in housing benefit. This cap is vital to control the welfare bill. For housing associations, a direction on rent is set each year by the regulator in order to achieve a degree of consistency in rent levels across the sector and to protect the housing benefit bill. Noble Lords may not be aware of this, but for two-thirds of all tenants in council and housing association properties, the rent comes from housing benefit. So it clearly would be significant. The noble Baroness’s amendment would remove an important control by Government over rents, which they will largely pay for. While this could pay for some improvements, it would result in uncontrollable increases in the housing benefit bill that we can ill afford. Furthermore, there would be no assurance that the taxpayer was obtaining value for money from the additional public expenditure. For this reason, I must reject the amendment. Councils and housing associations can charge affordable rents of up to 80 per cent of market rents as part of an agreement with the Homes and Communities Agency to build new homes. The extra rent must be used entirely to fund the new homes, which will produce a housing benefit saving as they are still at rents below those charged in the market. I hope that, in the circumstances, the noble Baroness, Lady Hollis, will take up the offer from my noble friend Lady Hanham and that on this occasion she will not press her amendment.