HC Deb 16 July 2003 vol 409 cc362-4W
Ms Oona King

To ask the Deputy Prime Minister pursuant to his written ministerial statement of 16 June 2003,Official Report, column 3WS, what assessment he made of the option using the interest generated on tenancy deposits held on a single custodial deposit scheme to cover the costs of independent adjudication where disputes occur. [126046]

Keith Hill

The consultation paper "Tenancy Money: probity and protection" provided an assessment in paragraph 35 of the Regulatory Impact Assessment at Annex 1. It noted that if £790 million, the amount estimated to be currently held in deposits, were held in a single custodial deposit scheme for a year, it would raise £31.6 million in interest (calculated at the Bank of England's then current base-rate). This is income that currently accrues to the landlord or, if so specified in the tenancy agreement, the tenant.

Ms Oona King

To ask the Deputy Prime Minister what estimate he has made of the number of disputed cases that would ultimately require adjudication under a national tenancy deposit scheme. [126043]

Keith Hill

There is a statistical analysis in paragraphs 8–14 of the Regulatory Impact Assessment at Annex 1 of the consultation paper on Tenancy Money. This noted that according to the Survey of English Housing (SEH) some 20 per cent. of tenants said that their deposits had been unreasonably withheld in the last three years. However for the purposes of calculating the maximum number of disputed cases an SEH figure was used that showed that of the 905,000 tenancies that finished in 2001–02 some 127,000 of these (14 per cent.) involved, in the tenant's view,0 an unjustified retention of all or part of the deposit.

Ms Oona King

To ask the Deputy Prime Minister if he will place copies of the public responses to Tenancy Money: probity and protection in the Library. [126041]

Keith Hill

The Office of the Deputy Prime Minister will do so when detailed proposals that will take account of Law Commission proposals for tenure reform are published. The Office of the Deputy Prime Minister hopes this will be later this year.

Ms Oona King

To ask the Deputy Prime Minister pursuant to his written ministerial statement of 16 June 2003,Official Report, column 3WS, which paragraph in Tenancy Money: probity and protection indicated that there is not a robust case for legislating to compel the protection of tenancy monies in third party schemes. [126042]

Keith Hill

Chapter 3, paragraph 35, of the consultation paper stated that an independent evaluation of the pilot by York University was inconclusive as to the need for legislation, as the pilot had provided insufficient evidence to assess fully the nature and extent of the problem. A more detailed report published alongside (but summarised in Annex 9 of) the consultation paper concluded that there is no clear evidence that the actual incidence of tenants losing their deposits is so high as to require legislative intervention. In Annex 1 of the consultation paper the balance of costs and benefits, as estimated for the Regulatory Impact Assessment, were shown to be roughly equal.

Ms Oona King

To ask the Deputy Prime Minister pursuant to his written ministerial statement of 16 June 2003,Official Report, column 3WS, what estimated percentage of disputed cases going to adjudication he used to calculate that the annual adjudication costs of a national tenancy deposit scheme would be £19 million. [126044]

Keith Hill

There is a statistical analysis in paragraphs 8–14 and 29 of the Regulatory Impact Assessment at Annex I of the consultation paper on Tenancy Money. This was based on the figures in the Survey of English Housing that of the 905,000 tenancies that finished each year approximately 127,000 tenants (or 14 per cent. of that total) felt that none or a lesser sum of the deposit should have been withheld. It further assumed, having regard to evidence from the pilot tenancy deposit scheme, that the average cost of adjudications would be £150.

Ms Oona King

To ask the Deputy Prime Minister if he will estimate the annual adjudication costs of the custodial option for a national tenancy deposit scheme if only 2.5 per cent. of disputed cases require adjudication. [126045]

Keith Hill

There is a tentative statistical analysis in the Regulatory Impact Assessment at Annex 1 of the consultation paper on Tenancy Money. It suggested that the maximum number of tenants who might feel they had a case to go to adjudication was 127,000. Assuming that (i) only a custodial option was in place (ii) only 2.5 per cent of 127,000 (3,175) sought adjudication and (iii) the average cost of adjudication under the pilot of £150 applied—the cost would be £476,250. Although the figure of 2.5 per cent. is closer to the proportion of tenancies in the pilot that resulted in adjudication a mandatory requirement for safeguarding tenancy monies would probably result in a much higher proportion requiring adjudication.