Anthony Mason

A series of significant defeats by the House of Lords to the Housing and Planning Bill may give some comfort to households at the very bottom of the housing ladder

Catherine Staite doesn’t hold back in her criticism of the centralising tendencies of UK governments – of all political hues.  And, as might be expected from a pragmatic academic, she excoriates government for making policy with no apparent reference to evidence.  Her most recent blog on these linked subjects (one of many) also brings local government into the line of fire.

Professor Staite now has a seemingly unlikely ally in the Delegated Powers and Regulatory Reform Select Committee of the House of Lords, which has issued its fourth report on the Housing and Planning Bill – that has just completed its passage through the Lords.  The select committee’s rather grumpy criticism of the Bill – and of DCLG as the sponsoring department – is partly procedural, but includes a strong shot across ministers’ bows for leaving so much of the detail of the Bill to secondary legislation (that is, leaving the detailed provisions of law to be made by Statutory Instrument).  As we now know from last year’s defeat of Mr Osborne’s tax credit proposals – which were presented to the second chamber as a set of Statutory Instruments – the House of Lords is not meant to oppose legislation made in this way, and so would have little ability to scrutinise the raft of detailed rules that will emanate from this Bill as it becomes law.

To recap; the Parliamentary website describes the purpose of the Bill as “A Bill to make provision about housing, estate agents, rent charges, planning and compulsory purchase.”  It has eight parts:

1. New Homes in England
2. Rogue Landlords and letting agents
3. Recovering abandoned premises in England
4. Social housing in England
5. Housing, estate agents and rent charges
6. Planning in England
7. Compulsory Purchase etc.
8. General

Although the Bill as it stands is around 200 pages including schedules, it is essentially an enabling provision with the implementation detail to follow as secondary legislation.  The provisions are wide ranging – with aims as significant as the better regulation of some private landlords and the loosening of regulatory constraints on housing associations, following the Office for National Statistics’ decision to reclassify them as public bodies for the purpose of government accounting (a decision that ministers want to reverse).

The provisions of the Bill that will have a more direct impact on local government concern affordable and social housing and town planning.  I considered the impact of the Bill on social housing in more detail as the legislation was presented for its second reading in the House of Commons.  The provisions around planning are just as wide ranging: to all intents and purposes, setting out to privatise some elements of the development planning process and to strengthen what amounts to a presumption in favour of development.

There is no avoiding the fact that the handling of the Bill by government has been shambolic and chaotic.  It has been subject to wide ranging criticism (for examples, see here and here).  It can be argued that the Bill’s core provision – opening up the right to buy to nearly all housing association tenants by forcing councils to sell assets to pay for it – was an unwise manifesto pledge based on “dog whistle” politics that David Cameron never expected to have to implement.  So presumably, little thought was put into the implications of actually realising the idea.  Even so, the parliamentary process has been muddled with a raft of late amendments laid down by ministers at the same time that parliamentarians (and local councillors) have fruitlessly demanded more detail on important issues.

With only a few weeks to Royal Assent, English councils that own housing still have no idea how much of their stock will come within the definition of “higher value;” how much money they will need to raise from selling that stock; and the mechanism by which the government will reclaim the money it needs to filch from councils to fund government policy.  Neither do councils know how government intends them to implement the “pay to stay” provisions of the Bill that will require better off council tenants to pay higher rents (with the resultant revenue going to government, not councils, it goes without saying).

Earlier, I linked my own criticisms of the Bill to Catherine Staite’s concerns about centralisation and the making of policy with no reference to evidence.  To flesh out these issues a little more:

• The Conservative manifesto for the 2015 election clearly stated its support for localism “..we will promote localism” it says on page 55. It is also a theme often picked up by the Chancellor in the context of his devolution deals.  Yet the Housing and Planning Bill in effect nationalises some council assets to pay for a government policy over which councils have no control.  It imposes a presumption in favour of development; and its provisions – alongside the rent cut imposed by the 2015 emergency budget – effectively bring to an end the short-lived self-financing settlement for Housing Revenue Accounts put in place by the Coalition government in 2012.  Government is firmly back in control of HRAs and all round, local authorities lose from the Bill and its associated provisions.
• The Bill picks up a series of ideas from the Policy Exchange (for example the disposal of higher value council homes), the intellectual foundation for which seems to lie in a view that social housing – especially council housing – promotes welfare dependency. Presumably in the same way that prisons promote crime and hospitals ill-health?  Funnily enough, there is a small sophisticated kernel of truth in each of those parallels – but not nearly enough evidence to justify selling off prisons and hospitals.  As an aside, Alex Morton, who penned much of the Policy Exchange’s thinking on housing and planning and who moved to Number 10 as housing policy advisor, has recently moved on again into PR and lobbying.
• A government that strives to promote the security that home ownership is said to give to some better off tenants also seeks to deprive new council tenants of their security of tenure (one of the many provisions of the Bill recently watered down a little by the Lords). And a government that supports aspiration wants to use the pay-to-stay mechanism to tax council tenant households who manage to better their income.
• The government is very critical of local authority planners for being a blockage in the development process when evidence suggests that the planning system in England delivered consents for 261,000 homes in the year ending March 2015 (the most recent figures available) but only 125,111 homes were built by developers. The evidence would therefore point towards focusing on the developers, not the planners.

A final concern might also be for housing associations in England.  They haven’t played relations with councils at all well recently, but in what other branch of the charitable/ not-for-profit sector would we passively stand by as a government sought to give away its principal assets to private citizens for less than their value?  We might call that corrupt if carried out by a government in the developing world.

So after a series of significant defeats on the Bill’s provisions in the Lords (and many more minor amendments) the legislation now returns to the Commons.  With the EU referendum date ever closer, it’s possible that the government may opt for a quiet life and not seek to overturn all the changes imposed by the upper house.  We shall see.

The process so far has thrown up some new heroes and villains for localism.  Lord Bob Kerslake – until very recently DCLG permanent secretary, head of the civil service and a scourge of local governance in this City – has led sterling and tireless efforts by a series of cross-bench and opposition peers to make some sense of the Bill’s provisions.

At the same time, the government department he so recently left has emerged much criticised through the Bill’s passage – and not just by the Delegated Powers and Regulatory Reform Select Committee.  We have worried about the capacity and impact of the DCLG within Whitehall for many years.  The Housing and Planning Bill seems to leave the department in a seriously damaged state.  Is it any longer fit for purpose?

Anthony Mason is an Associate at INLOGOV and works mostly on local government systems and organisation and on improving public sector partnerships.  His early career was in local government followed by more than 20 years in PwC’s public sector consultancy team.