My Lords, I support all the amendments in this group, not least those in the name of the noble Baroness, Lady Grender. My name is added to Amendment 68A, but I begin by supporting Amendment 66C about tenant management organisations in the names of the noble Lords, Lord Kennedy of Southwark and Lord Beecham. That amendment relates to the council housing that is managed by tenant management organisations. This is in a quite separate context from the earlier discussions about TMOs, which the noble Lord, Lord Young of Cookham, raised an anxiety about. This time, these managed properties are not in danger of losing a right to buy. Instead, this is just about excluding the tenant management organisation properties from the calculation of the vacant high-value local authority housing levy.
That may seem a rather specialist exclusion from the levy, and indeed tenant management organisations do not count for more than a few per cent of council housing, but these organisations, as the noble Lord, Lord Kennedy, said, merit special attention. They were a product of policy from an earlier Conservative Government who wanted to devolve responsibility to tenants on self-help principles. They have attracted significant input from volunteers giving up endless time to make their council estates better places. Of course, housing co-operatives are excluded from the sales under the vacant properties programme because they are registered as housing associations. However, although tenant management organisations are similar to housing co-operatives, the homes that they manage remain classified as council housing and therefore their property gets caught up in the new levy.
I recognise that local authorities must choose for themselves which vacant properties to sell to pay the levy imposed on them, so a council could opt not to sell TMO stock; but for most councils, the very serious money involved on top of the 12% cut in income in rents over the next four years means that whatever housing goes into the calculation of the levy is very likely to have to be sold as vacancies occur to pay that levy. So this amendment seeks to take them out of the equation altogether.
As a case study, I have had a chance to consider the circumstances of a Southwark-based TMO, the Leatherhead JMB. It has been going for 22 years and
over time has turned around an unpopular collection of estates and has created a well-liked and settled community. It has an extraordinarily high level of tenant satisfaction. On a 78% turnout, 92% of tenants expressed their support for the TMO. The London Borough of Southwark, using the Localism Act 2011 introduced by the last Government, has devolved to the TMO financial control of what is in essence a separate housing revenue account. Two government Ministers have visited to celebrate this great example of localism in action. The Leatherhead JMB is currently engaged in building new homes in addition to its very cost-effective management role. It is willing and able to sell a small number of vacant properties selected by them to raise the necessary funds for new build. But, of course, if the properties all went into the calculation of the levy and its parent body, the London Borough of Southwark, then felt compelled to sell all the vacant homes, two-thirds of the funds would go to the Treasury and this would scupper its plans.
What we have here is really a housing co-operative by another name and as such it seems entirely appropriate to treat the TMO as if it were a co-operative and therefore a housing association outside of the levy. Because the tenants themselves have made this a popular place, they have raised its value and therefore its vulnerability when it comes to compulsory sales of high-value council-owned, but not council-managed, properties. This settled community will also be disproportionately affected by the sales of vacant flats, very often to overseas buyers because of its London location close to the river. This particular issue may not have crossed the Minister’s desk, and I would make a special plea for her to call in the papers and have a good look at the special status of tenant management organisations.
Amendment 68A concerns people who want to transfer from one home to another within the social housing stock. My concern is about the calculation of the levy on councils which is gleaned from selling vacant properties. As Shelter points out, “Households need to move within the social stock for a large number of legitimate reasons. They may be under-occupying their current home and want to downsize or be subject to the under-occupancy penalty, the bedroom tax, and need to move. They may be overcrowded in their property and need extra room. They may need to move for work, or to move closer to relatives in their old age”. No one wants to discourage transfers since they ease problems of both under-occupancy and overcrowding.
The question raised by Amendment 68A is this. When working out the amount of the levy that a council must pay, will the DCLG’s calculations exclude those vacancies created by transfers; that is, by people who vacate one council property but move immediately into another council or housing association property? Obviously a mutual exchange between two tenants does not create a vacancy since both of the homes that are vacated are instantly refilled. The process with a transfer is that a property becomes vacant, enabling a transferring tenant to move in and thereby theoretically creating a second vacancy in the home they are leaving. But the person transferring will immediately occupy
the other council property, so it cannot be right to count two properties as empty because of a transfer. We know that the DCLG is already well into the consultation process for determining the levy, and I would be grateful for clarification from the Minister that this point has been taken on board. From what she said earlier, I think that the answer may be in the affirmative.
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