HC Deb 08 July 1996 vol 281 cc47-8
Mr. Clappison

I beg to move amendment No. 23, in page 18, line 22, leave out from first 'be' to 'make' in line 35 and insert `determined by the local housing authority, having regard to—

  1. (a) the extent to which the landlord is able to charge a higher rent for the premises because of the works, and
  2. (b) such other matters as the Secretary of State may direct.
( ) The authority may, if they think it appropriate, seek and act upon the advice of rent officers as to any matter. ( ) The Secretary of State may by regulations'. The amendment provides for authorities to have regard to the extent to which the landlord is able to generate higher rental income on the improved property and, if they think it appropriate, to seek and act upon advice from rent officers on any matters concerning rents.

Clause 31 provides authorities with discretion to determine the amount of grant in landlords' applications covered in subsection (1). It is important therefore that decisions taken by authorities on grant applications made by landlords are based on sound information. The scope for the landlord to charge a higher rent for the improved property will obviously have a bearing on the amount of grant that the local authority may award. We consider it appropriate, therefore, that express provision is made to ensure that authorities have regard to that in every case in determining grant.

The amendment simplifies the current version of clause 31(4), allowing local authorities to obtain and take into account any relevant matters. A general provision of this kind is preferable to more detailed provisions, which are more appropriately placed either in departmental guidance or in guidance issued to rent officers by the Institute of Rent Officers. The amendment therefore provides also for authorities to obtain and take into account advice from rent officers on any matters that they consider relevant to an application.

Those are sensible provisions which provide authorities with the flexibility that they need to reach sound decisions on such cases.

Mr. Raynsford

Like the previous Government amendment, this is a partial move in the right direction by the Government, when a more extensive move would be welcome. It is a partial move because it recognises the importance of obtaining the best information on the likely increased rental income to a landlord when a property is renovated so that that income can be taken into account when determining the landlord's entitlement to grant. We approve of and endorse that provision, and we welcome the reference to the role of rent officers in that respect.

We regret that the Government have not seen the need to go further and accept the proposal we made in Committee—that it should be possible for a local authority to get a binding agreement from a landlord that the rent estimates taken into account in calculating grant entitlement will be honoured for a specified period. What happens if, after the grant has been calculated on the assumption that the landlord will obtain certain rental income after the property has been improved, the landlord secures a much larger rent and therefore obtains a much better financial return? Had that return been taken into account when the grant was assessed, the landlord would have qualified for a lesser grant.

Seeking the best information when applications are assessed is one thing, but if one does so without having powers to require the landlord to be bound by those assumptions, or to recover grant if a landlord has broken such conditions, it is only a limited step. We regard the amendment as a step in the right direction, but only a modest one and we regret the fact that the Government have not gone further, followed the logic of our position—and probably the logic of their position, if they took the time to think the matter through—and agreed that there should be controls on the rents that can be charged subsequently as well on assumptions about what the rents would be.

Mr. Clappison

We seem to have moved from talking about assumptions to talking about controls—something that rings warning bells.

Amendment agreed to.

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