Rent Arrears (Hansard, 16 December 1986)

§ Lord Gridley
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

§ Lord Skelmersdale
My Lords, the latest comprehensive figures on rent arrears owed to local authorities suggest that accumulated arrears in Great Britain total over £230 million. The authorities with the poorest performances—with arrears expressed as a proportion of their annual rent rolls—are the London Boroughs of Brent, Haringey, Southwark and Lambeth, and the Western Isles District Council.

§ Lord Gridley
My Lords, are not these uncollected arrears of rent of £230 million nationally a very serious matter? Have the local authorities been warned of the situation? In particular with regard to the London Borough of Haringey has my noble friend seen the report dated 10th November in The Times which states that the arrears in that borough have now reached £5.6 million? Has the situation been brought to the local authority's attention? Does not my noble 100 friend agree that on the national scene, with these huge arrears which exist and have not been collected, there is a failure by the local authorities which amounts to a discrimination between one section of the community who pay their rent and another who do not? And is this not a slap in the face for the first section?
Is this not a failure of local democracy——

Noble Lords
Speech!

§ Lord Gridley
This is a serious matter, my Lords, which should receive attention.

Noble Lords
Order!

§ Lord Skelmersdale
My Lords, the current levels of arrears in a minority of authorities are quite scandalous. In Haringey, for example, to which my noble friend referred, the total arrears run at 28.5 per cent. of total rent income, at a smidgen under £5.6 million. They are one of the minority who place an unjustifiable burden on other tenants and on ratepayers, who have to bear the costs of interest charges and of ultimately writing off debt. It is very hard to see how such authorities justify such disgraceful conduct to their electors and their auditors.

§ Lord Mellish
My Lords, is the Minister aware that part, if not all, of this problem is due to the fact that some of the boroughs he has mentioned have now outgrown themselves? Over 80 per cent. of the entire rented population of a borough can come under the control of the local authority and the housing department completely loses control. I ask the Minister whether he has any ideas as to what ought to be done?

§ Lord Skelmersdale
My Lords, I agree with the noble Lord that this problem would not be nearly so serious if the local authorities concerned had proper management controls and identified the problem early.

§ Lord Taylor of Gryfe
My Lords, is the Minister aware that the Western Isles will not be pleased to be bracketed with Brent, Haringey, and Lambeth? Can he state the total amount outstanding in respect of the Western Isles compared with the three London boroughs which he has mentioned?

§ Lord Skelmersdale
My Lords, I have a whole realm of figures here. Perhaps on the precise figure it would be appropriate for me to write to the noble Lord. However, the Western Isles are indeed in the top five authorities concerned, and I trust that the electors will take notice of that fact.

§ Lord Campbell of Alloway
My Lords, may I ask my noble friend the Minister what happens to the arrears? Are they just written off? If they are not written off, how are they collected?

§ Lord Skelmersdale
No, my Lords, they are not written off in the first instance. There are discussions between the council officials and the individual tenants. Once they have been identified—which, as I said to the noble Lord, Lord Mellish, is the major 101 problem in all this—then people's rights are described to them as to whether they should apply for supplementary benefit or have housing benefit. It may well be possible to come to an arrangement whereby the tenant pays off the arrears by a small surcharge over a period of time on his rent bill. Various ways are open to the council.

Lord Morris
My Lords, can my noble friend distinguish between the effect of deliberate overspending on capital or revenue account and the effect of negligently not collecting arrears of rent, bearing in mind that the deliberate overspending brings very severe penalties on the local council and the councillors involved?

§ Lord Skelmersdale
My Lords, rent is a current account income and affects repairs and maintenance rather than capital spending.

§ Lord Graham of Edmonton
My Lords, I wonder whether the Minister is able to tell the House to what extent the deprivation of rate support grant—which involves hundreds of millions of pounds, particularly to London authorities—affects the situation? Will the Minister also bear in mind that there are many authorities which, under pressure from the Government, have reduced their staff to such an extent that they are having great difficulties in carrying out their duties?

§ Lord Skelmersdale
My Lords, if proper management entails very great difficulty perhaps local authorities are not the right people to manage public housing in this country. On the original supplementary question of the noble Lord, Lord Graham, rate support grant has absolutely nothing to do with it.

§ Lord Gisborough
My Lords, can my noble friend say whether this situation is leading to a rapidly decreasing state of repair and maintenance, perhaps leading to houses becoming uninhabitable?

§ Lord Skelmersdale
My Lords, in severe cases, yes, indeed. It might well do so.

§ Lord Mackie of Benshie
My Lords, returning to the Western Isles, does the Minister not agree that a far lower proportion of the population of the Western Isles is housed by local authorities than is the case in Brent, Haringey and other such places?

§ Lord Skelmersdale
My Lords, the noble Lord is no doubt an expert on the Western Isles and I am not. However, I can tell him that rent arrears as a percentage of rent collectable in the Western Isles is 24.1 per cent., which I suggest is a high figure.

§ Lord Dean of Beswick
My Lords, is the Minister not aware that, of the aggregate arrears he has quoted, quite a considerable sum may well be money which is owed by people at the very bottom end of the wage-scale, who receive no support whatever but who have difficulty in meeting their rent? How does he expect a local authority to deal with that when the only final sanction it has is eviction? If local authorities evict 102 such people and place them in the care of their social services departments, it will cost an astronomical sum compared with the rent which they owe.

§ Lord Skelmersdale
My Lords, I can do no better than to refer the noble Lord to the answer I gave to my noble friend Lord Campbell of Alloway.

§ Lord Avebury
My Lords, are there not arrangements for the DHSS to pay rents direct to local authorities in cases where the tenants are on unemployment or other benefits? Can the noble Lord say what proportion of tenants who are in arrears in the three London boroughs mentioned are in receipt of benefit? Has he considered whether there are different arrangements between the DHSS and the local authorities in those three boroughs and between the DHSS and local authorities in other parts of the country where arrears are not so large?

§ Lord Skelmersdale
My Lords, as I understand the position, rent being paid direct to the landlord has to be with the agreement of the receiver of the benefit concerned. I shall have to write to the noble Lord about the precise proportion of the various London boroughs.

§ Baroness Faithfull
My Lords, can my noble friend tell us the difference in arrears between local authorities and housing associations? I understand that housing associations so manage their affairs that they have very little in the way of arrears.

§ Lord Skelmersdale
My Lords, that is also my understanding. However, the Question is specifically on local authority rent arrears, and it is that Question which I came prepared to answer.

§ Baroness David
My Lords, does the Minister agree that as a result of all these questions this is a very much more complicated matter than appears at first sight? Occasionally there may be inadequate management, but very often there is good management and there are still substantial arrears, and a great many factors go to make them up. Is the Minister also satisfied with the way in which the figures are collected? In the press notice issued by his department on 10th December the rent arrears as a percentage of rent collectable for Brent was given as 63 per cent. The CIPFA figure for Brent was 33.51 per cent. They are admirable figures, but we must remember that until May 1986 Brent was a Conservative-controlled authority. Will the Minister look at the way in which these figures are put together and say whether they include rate as well as rent arrears? That will make a great deal of difference to the eventual answer.

§ Lord Skelmersdale
My Lords, CIPFA and the local authority associations are discussing this matter at the moment. However, the figures given in the press release referred to by the noble Baroness and the figures which I have given come from the local authorities themselves. If they are incorrect, it is the local authorities' figures which are wrong.

§ Baroness David
My Lords, does the Minister agree that a local authority's response will depend very much on the questions asked by the department and on how it forms those questions?

§ Lord Skelmersdale
My Lords, they are the same questions as have been asked for a number of years. We are looking at a moving picture, and the situation has become very much worse in recent years.