Agenda Item No
The Vale of Glamorgan Council
Cabinet Meeting: 16 June, 2014
Report of the Cabinet Member for Housing, Building Maintenance and Community Safety
Housing (Wales) Bill
Purpose of the Report
1. To update Cabinet on the contents of the proposed new Housing (Wales) Bill.
1. That the proposed changes contained within the Bill be noted.
2. That further Cabinet reports be submitted in respect of each element of the Bill to outline the options available to the Council.
Reasons for the Recommendations
1. For information.
2. To enable Cabinet to make informed decisions on any required changes to policy.
2. The Housing (Wales) Bill was launched by the Minister for Housing and Regeneration, Carl Sargent on 18th November, 2013 and has just completed Stage One of the National Assembly of Wales' four stage process. The General Principles of the Bill were approved in Plenary on 1st April 2014.
3. If the Bill passes through all of its stages, it could receive Royal Assent in summer 2014, with a staggered roll out of the legislation governing different aspects of the Bill being rolled out over a number of years.
4. There are seven key themes in the Bill, all of which will have an impact on the Council's service delivery. These themes are Regulation of Private Rented Housing for landlords and agents, Homelessness, Gypsies and Travellers, Standards for Social Housing, Housing Finance, Co-operative Housing and Council Tax for empty dwellings.
5. Changes to the legislation in respect of Homelessness and the private rented sector are expected to commence from 1st April, 2015 but implementation dates for the other changes are not yet known.
6. The Council is currently in the process of developing the Local Housing Strategy 2014-19 which will not only set out the Council's vision for Housing for the next five years, but will also drive service changes and improvements to meet the challenges of the new Bill.
7. On 19th February a very successful Local Housing Strategy Evidence Gathering Day was held in the Memorial Hall in Barry, which was attended by over 125 stakeholders, including Members and representatives from the voluntary and statutory sectors. This event provided displays and workshops on good practice. Attendees were challenged to provide evidence and feedback on current services to enable the Council to provide the appropriate response to meet the challenges of the Bill. All information collated will be used to inform the new Local Housing Strategy and assist in mitigating the changes listed below contained within the Bill.
Relevant Issues and Options
Regulation of Private Rented Housing:
8. The private rented sector is becoming an increasingly important part of our housing provision. In February 2011, the National Assembly for Wales' Communities and Culture Committee published a report highlighting areas where improvements in the sector were needed to deliver better housing and management standards. The report recommended that the Welsh Government explore the possibility of a national, mandatory registration and licensing scheme to regulate private landlords, letting and management agents. The purpose of such a scheme is to improve standards in the private rented sector, provide more information to tenants and local authorities on landlords renting accommodation and help raise awareness of landlords and tenants rights and responsibilities.
9. This recommendation has been agreed and actioned through the Bill's Private Rented Sector Registration and Licensing Scheme. The Scheme will enable a comprehensive online database of all private landlords and letting/management agents that operate in the private rented market to be established. This will allow tenants to check whether a property and/or landlord are registered and/or licensed on the Scheme.
10. If a landlord lets through a letting agent, the landlord is required to only register with the Scheme. If the landlord wishes to manage a tenancy directly, the landlord will be required to also become licensed. To be licensed, a landlord or agent will be required to evidence they have successfully completed approved training and they are a 'fit and proper' person, that is they have no convictions for housing offences, fraud, violence, firearms, drugs, sexual offences on schedule 3 of the Sexual Offenders Act 2003 or not practiced unlawful discrimination or harassment. For agents to become licensed they will also need to be a member of an approved body and ensure at least two-thirds of staff who are directly involved in the lettings and management of residential properties achieve the accreditation. With each application there will be a fee payable by the landlord or agent that will be set nationally to assist in meeting the cost of administering the scheme.
11. There is broad support for these proposals from local authorities, their representatives and housing bodies. However, there is some concern from landlord and letting agent representatives about the Scheme. While each group have their individual issues, collectively the groups argue the proposals from Welsh Government have not been well researched and the cost of implementing the scheme has been underestimated due to that lack of information. They further argue the income raised from the registration/ licensing fees will not cover the total operating cost of the scheme and additional resources from Councils will need to be found. The argument continues that these resources would be better utilised enforcing the existing legislation and not enforcing a licensing and registration scheme. Landlord groups are also concerned the cost of the registration/ licence fees will be passed on to the tenant, and that the proposals will have an adverse affect on the private rented sector by penalising good landlords and not tackling poor landlords.
12. To implement the scheme, the Welsh Government would like the current voluntary landlord accreditation scheme to be developed to maximise efficiencies and to minimise the impact of the legislation on local authorities. This work is ongoing and at the time of writing this report there was no information on who would host this scheme and how it would be financed. If it is to continue similar to the current voluntary scheme, the administration of the scheme will be hosted by one local authority, the income from the fees will subsidise the operating cost with all 22 local authorities asked to fund the remaining amount on a formula basis. With a national scheme assisting with the administration of registering and licensing landlords and agents, it will be the responsibility of each Council to regulate private landlords and agents. This will create a demand on existing resources within the Council's Private Housing team. An amendment to the Bill enables the Council to issue fixed penalty notices to landlords for non-compliance at amounts detailed in the Bill. The revenue raised from these fixed penalty notices will remain within the Council and must be used to off-set the cost of implementing the Scheme. It is unlikely the revenue generated through enforcement will fully fund a post.
13. Homelessness is one of the most extreme forms of social isolation and the Bill seeks to reduce homelessness by placing a greater emphasis on prevention and on improving services for people not in priority need. It also seeks to reduce the link between homelessness and social housing by allowing the Council to discharge its duties by placing people in suitable accommodation in the private rented sector.
14. The Bill places a duty on the Council to undertake and publish a homelessness review and to publish a Homelessness Strategy. In addition, there will be a duty on the Council to promote cooperation between Housing and Social Services in relation to homelessness prevention, provision of accommodation and support. Registered Social Landlord partners will also have a duty to co-operate with the Council in relation to preventing homelessness and providing accommodation and support, unless it is incompatible with their duties or would have an adverse effect on their functions.
15. The current duty on the Council to provide information and advice in relation to homelessness will continue and to undertake an assessment if someone may be homeless or threatened with homelessness. The Council will also continue to have a duty to provide interim accommodation if it believes that someone may be eligible for help, is homeless and in priority need. However, the new legislation will also place a duty on the Council to 'take reasonable steps to prevent homelessness' for anyone (and those that they normally live with) at risk of homelessness within 56 days', an extension from the current period in the legislation of 28 days. Whilst this is subject to the availability of resources, it will place a significant new burden on the current Homelessness Service, as it will apply to anyone, irrespective of whether or not they have a local connection to the Vale of Glamorgan or if they are intentionally homeless. It will therefore extend the entitlement of many applicants who are currently only entitled to advice and assistance from the Council.
16. Whilst the definition of 'homeless' remains largely unchanged within the Bill, in respect of the test to establish if someone is deemed to have become intentionally homeless through their actions, the Council must have a defined list of categories of applicants for which this test is applied in the future. In addition, the Council will also be required to have regard to whether the applicant's accommodation is affordable for them, which will have implications for households in the Vale of Glamorgan affected by the bedroom tax or those with high levels of debt.
17. From 2019, the Council will have a duty to provide accommodation for families with children even if they have been found to be intentionally homeless, unless they have already been found intentionally homeless in the last five years. The Council will also be expected to coordinate a plan of action and support to prevent the family becoming homeless in the future, which will have resource implications for the Homelessness and Supporting People Services and could also impact on Social Services.
18. One positive change contained within the Bill is in respect of former prisoners. Under the current legislation they have a priority need and can be very resource intensive. Under the new legislation, from April 2015 prisoners will only have a priority need if they are vulnerable after being in custody or detention and they have a local connection to the Vale of Glamorgan, which should significantly reduce the numbers presenting to the Homeless Service.
19. Welsh Government has acknowledged that the new homelessness duties will lead to increased costs for authorities. For this reason an additional £4.9million in 2015-16 and £3.2million in 2016-17 has been included in their budget to assist with the implementation across Wales. However it is not yet known how this will be apportioned and how much additional funding will be allocated to the Vale of Glamorgan.
20. Housing Services has already commenced work on identifying the options available to the Council to meet the requirements of the Bill by seeking to create a housing service which will deliver an innovative, radical and relevant service to all residents of the Vale of Glamorgan. A Homelessness Consultant has been engaged to undertake a feasibility study in consultation with all partners, but the objective is to move the focus of the service from that of a Homelessness Service to a Housing Futures Service, which will offer help and advice to any resident in the Vale of Glamorgan in need of housing help. The new service will be able to assist a person whether they need help and advice on finding accommodation, preventing homelessness, leaseholds, repairs, grants, loans, equity release schemes, shared ownership or outright ownership schemes, thus providing a holistic service and individualised housing options.
21. The aim will be for the new Housing Futures Service to deliver to the heart of the Vale community, embracing new digital technology and delivering help in the way and in the locations that residents now demand.
22. This new service approach is the key to the Council being able to respond to the new Homelessness legislation contained within the Bill, particularly in respect of the extension of the prevention duty to 56 days. It will also ensure that housing advice is available to everyone, not only those at risk of homelessness and assist the Council to mitigate the effects of the welfare reforms, particularly the introduction of the Universal Credit.
Gypsies and Travellers:
23. The new legislation is being introduced to ensure the accommodation needs of Gypsy and Travellers in Wales are met and that they have an equality of opportunity. The Bill will place a new duty on councils to assess the accommodation needs of gypsies and travellers both settled and those passing through the area and to provide sites to meet that need, either by the individual Council or through a regional collaboration. The proposed duties will also enable Welsh Ministers to compel a Council to provide a suitable and sufficient site if any identified need is not met.
24. The Bill proposes that Ministers are given powers to make sub-ordinate legislation to amend the review period for assessment of Gypsy and Traveller needs and to change the definition of Gypsy/Traveller in the Bill.
25. Welsh Government currently provides 100% grant funding for the improvements of existing Gypsy and Traveller sites or the provision of new ones up to a maximum of £1.5million per site. However, the total funding available is only £1.5 million per annum. Fourteen local authorities, including the Vale of Glamorgan have already evidenced the need for at least one new site, Welsh Government is therefore seeking to increase this capital funding but will not compel the Council to provide a new site where grant funding is not available.
26. The Council's Local Development Plan 2011 to 2016, which underwent a six week consultation period from November 2013, identified a site in Sully for the development of a new Gypsy and Traveller site in compliance with Welsh Government requirements in order to meet the identified needs of the Gypsy and Traveller community in the Vale of Glamorgan This need was evidenced in the Gypsy and Traveller Accommodation Assessment carried out on behalf of the Council in 2013.
27. During the consultation period several alternatives Gypsy and Traveller sites were proposed, which form part of the six week Alternative Site consultation period ending on 1st May 2014. It will then be incumbent on Cabinet to consider the representations made prior to the Local Development Plan being submitted to the Welsh Government for inspection.
Standards for Social Housing:
28. The legislation will place a new duty on the Council to comply with standards for housing quality (Welsh Housing Quality Standards or WHQS), rents and service charges. Meeting WHQS is not currently a statutory requirement, but is a condition of the Council receiving the Major Repairs Allowance Grant which provides financial support to bring the homes up to WHQS within the timescales agreed with the Minister. Under the Bill, the Council will be required to meet WHQS by 2020 and to maintain the standard thereafter. This will give the Council greater freedom to invest in its housing stock and to consider the potential to build new homes to meet local housing need, at rent levels above social rents but below market rents, if required.
29. The Bill will also include the power for Welsh Government or their nominee to inspect properties where they consider a council is failing to maintain or repair any of its properties, issue warnings and to pass the performance of the council's functions to the Welsh Minister or their nominee. The Welsh Ministers will also be given power within the Bill to intervene in the performance of other functions of a council's Housing Service, if it is failing to comply with requirements.
30. The Council's Housing Services is already on target to meet the Welsh Housing Quality Standard by 2017. To date 53% of the internal works have been completed, which is ahead of the planned programme. In 2014/15 a three year £20 million programme commenced on the external work to council properties e.g. roofs, cladding chimneys etc. This will run alongside the remaining internal works programme. Following attainment of WHQS in April 2017, the Council's Housing Business Plan assumes maintaining the Standard will cost around £5 million per annum.
31. The Welsh Government currently sets 'Local Authority Guideline Rents' which are used to calculate the Housing Revenue Account Subsidy (HRAS) each year. The Housing (Wales) Bill will abolish the HRAS system. Welsh Government has already developed a new policy for social housing rents that will be applied across the entire social rented sector (including housing associations) to ensure consistency and to reflect the type, size, location and quality of the properties. The Bill will provide the legislative framework for this new rent policy to ensure that rent and service charges are clearly and separately identified, resulting in greater transparency for tenants. The Council will be required to implement this policy following its exit from the HRAS system
32. The abolition of the HRAS system will mean that the Council will no longer have to make negative subsidy payments to the UK Treasury, which will result in a financial saving. However, the Council will first be required to buy itself out of the subsidy system following consultation with Welsh Government on its value. As part of the agreement, a housing related borrowing limit will be set for the Council, which could restrict future housing related borrowing, but the Council will be able to continue to invest in its stock in line with its current business plan commitments. The date when the Council will be able to exit from the HRAS system is however still subject to the required UK Legislation being passed or the UK Treasury agreeing to the development of a voluntary agreement between the Council and Welsh Government.
33. Senior Council Officers in the Vale of Glamorgan are currently involved in discussions and negotiations with Welsh Government in respect of the specific impacts on the Council. They are also on a number of national working groups to develop capacity for councils with retained housing stock to ensure the effective delivery of the new financial regime.
34. The Bill seeks to facilitate further development of cooperative housing in Wales. Currently, apart from a small number of co-housing schemes and self-build societies, the only form of co-operative housing that exists in Wales are based on the 'Community Mutual' model, none of which exist in the Vale of Glamorgan.
35. Under the Bill, fully mutual housing co-operatives will be able to grant assured tenancies, use standard and well understood tenancy agreements, thus removing the difficulties with current occupancy agreements. These changes will give protection to tenants and confidence to lenders and strengthen the organisations ability to develop affordable housing schemes.
Council Tax for empty dwellings:
36. The Bill seeks to maximise the use of existing homes by dissuading owners from leaving properties empty. Homes become empty for many reasons, but many fall into disrepair, become unsightly or unsafe and suffer from vandalism resulting in a detrimental effect on the local community. The Council has a high identified need for more housing, particularly affordable and it is therefore in its interest to ensure that empty homes are brought back into use at the earliest opportunity.
37. The Bill will enable the Council to take an incremental or 'stair casing' approach to applying additional council tax charges on properties that have been empty for more than twelve months with an increased maximum premium of 100%. This will not only act as a further deterrent for owners, but the legislation will be amended to ensure that the Council is able to retain any additional income that the new power generates. Although this funding cannot be 'ring fenced' it is expected by Welsh Government that it would be channelled into addressing the Authority's need for additional affordable housing.
38. Welsh Government has confirmed that if an owner is deemed to have a legitimate reason for leaving a property empty, they will not incur a financial penalty as the property would not fall within this scheme.
39. Following the comments expressed at Stage One of the process in the National Assembly, the Welsh Government has tabled a first tranche of amendments to the Bill, one of which is to include provisions which will enable the Authority to also charge additional council tax in respect of second homes.
40. Implementation of both of these changes would place an additional burden on the Council in respect of administration, income collection, monitoring inspections and any Valuation Tribunal hearings resulting from appeals. Cabinet will therefore be required to consider at a later date if the potential income that could be generated by the Council through the application of additional council tax premiums would justify any additional resource requirements.
Resource Implications (Financial and Employment)
41. There will be resource implications for the Council to implement the requirements of the new Housing (Wales) Bill. However until the specific costs are known and announcements from Welsh Government are made outlining the additional funding made available to the Council, the exact implications cannot be quantified.
Sustainability and Climate Change Implications
42. By ensuring that properties of all tenures in the Vale of Glamorgan are of an appropriate standard it will assist the Council to minimise the impact of climate change and better meet the needs and aspirations of tenants and residents.
Legal Implications (to Include Human Rights Implications)
43. The Authority will be required to meet the legislative requirements of the new Housing (Wales) Bill.
Crime and Disorder Implications
44. There are no negative crime and disorder implications arising from the report.
Equal Opportunities Implications (to include Welsh Language issues)
45. The introduction of the Housing (Wales) Bill will do much to improve the quality of life of some of the most socially and economically disadvantaged people in the Vale of Glamorgan.
46. This report is consistent with the Corporate Objective of the Council:
Vale of Glamorgan residents have access to affordable, good quality suitable housing and housing advice and support.
Policy Framework and Budget
47. This report is consistent with the Policy Framework and Budget.
Consultation (including Ward Member Consultation)
48. The Housing (Wales) Bill will affect services delivered throughout the Vale of Glamorgan; therefore no individual ward member consultation has been undertaken.
Relevant Scrutiny Committee
49. Housing and Public Protection.
The Housing (Wales) Bill.
Pam Toms, Strategy & Supporting People Manager, Housing Services. (01446) 709788
Elen Probert, Principal Housing and Pollution Officer, Public Protection Services (01446) 709833.
Head of Financial Services
Legal Services - Committee Reports
Miles Punter - Director of Visible Services and Housing.