My Lords, I thank the Minister for his introduction to this order. I particularly welcome the contribution that we have just heard from the noble Lord, Lord Best, pretty much all of which we agree with.
The order itself is to be welcomed but we know that it comes attached to an administrative change to the general approval regime which will significantly curtail the opportunity to introduce selective licensing. From 1 April, local authorities will have to seek confirmation from the Secretary of State for a selective licensing scheme which covers more than 20% of their geographical area or will affect more than 20% of the privately rented homes in the local authority area. This is yet another centralising, controlling proposition from the Government, who continue to espouse the cause of localism but too often act in a contrary manner.
However, we support the arrangements for selective licensing; indeed, they were introduced under legislation of the previous Labour Government. The intent is to focus on those who show no interest in managing their properties properly, often letting to anti-social tenants who cause havoc for the local community. Licensing is a means of seeking to ensure that landlords are fit and proper persons. Can the Minister confirm that a local authority cannot simply designate an area on a whim? In particular, local authorities are currently required to consult those likely to be affected by designation and consider any representations made. Nor, if we are correct in our understanding, can the licence conditions be open-ended; they must relate to residential use of the property. Although authorities have a degree of discretion to set the precise conditions of the licence, they must include certain mandatory conditions, including the requirement to produce a “gas safe” certificate each year, keep electrical appliances and furniture in a safe condition, and keep smoke alarms in proper working order. Why on earth would the Government wish to weaken these requirements?
These matters need to be considered in the context of what is happening more generally in the private rented sector. One in five now lives in the PRS, including 1.5 million families with children, but we know that a third of the homes in the PRS do not meet decent home standards. We need to drive up standards by introducing a national register of landlords, which will make it easier for local authorities to introduce licensing schemes and ensure that tough sanctions are in place.
It is argued by the Government that selective licensing is not supposed to be a blanket arrangement, but does the Minister not accept that being more selective would be aided if there were a national register? From the information in the impact assessment, only a handful of local authorities have introduced authority-wide schemes to date—Newham, Barking and Dagenham, Enfield, Liverpool and Waltham Forest—although others are exploring the possibility. Can the Minister say specifically what problems have actually arisen in those boroughs? From the evidence we heard from the noble Lord, Lord Best, it seems that Newham, far from being a problem, has actually been a success and that progress is being made in tackling bad landlords. What evidence is there that landlords are not absorbing the cost of licensing?
It is suggested that borough-wide selective licensing can deter investors. RBS’s position is cited, but is not the whole rationale for licensing to improve areas, encourage better management of stock and tackle anti-social behaviour? Is it not the case that individual authorities are best placed to judge the impact on the extent of licensing in their areas? Why on earth would they wish to do something to impair the prospect of more investment in their housing? So far as the new thresholds are concerned, what analysis underpins the Government’s 20%/20% approach? What evidence backs up that requirement?
It is suggested that the Government will issue guidance—indeed, the Minister has confirmed that—advising local authorities to focus their efforts, in the first instance, on just the 10% most deprived local super output areas across the country. This would significantly reduce the number of PRS properties covered by a licensing scheme; one can see the tabulation at the end of the impact assessment. The Government’s emphasis seems to consider the landlord in priority to the tenants and the community.
I have one further point. Option 1 in the impact assessment sets out whether approval would be granted in schemes larger than 20%, and states that,
“local authorities must be able to demonstrate the scheme is enforceable and fully resourced”.
How will that judgment be made? Does this not mean that the most deprived areas, which are likely to have the greatest need for licensing, will struggle the most to resource that requirement? Where is the fairness in all that?
5.15pm