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Earl Ferrers: I commend Amendment No. 74 to the Committee.

On Question, amendment agreed to.

[Amendment No. 75 not moved.]

Earl Ferrers moved Amendment No. 76:


Page 26, leave out lines 40 and 41.

On Question, amendment agreed to.

[Amendment No. 77 not moved.]

Clause 46, as amended, agreed to.

Clause 47 [Grant conditions: introductory]:

Lord Lucas moved Amendment No. 78:


Page 28, line 11, leave out from ("consent") to end of line 12.

The noble Lord said: In moving Amendment No. 78, I should like to speak also to Amendments Nos. 80, 83, 84, 86, 87, 261, 262 and 269. The amendments have various purposes. Amendments Nos. 78 and 86 give Clause 55 a condition period of its own rather than it having to depend on Clause 47 for one. Amendment No. 80 ensures that, where someone inherits a property, he is not required to repay a grant that has been given on it but if he disposes of the property within the repayment condition period he will have to repay it.

So far as concerns Amendments Nos. 83 and 84, Clause 53 describes the occupancy conditions attached to an HMO grant. Subsection (1)(b) requires that the house is not occupied so as to cause a breach of any direction relating to the number of occupants. Amendment No. 83 adds to that subsection a duty to keep the premises fit for the number of occupants. The amendment is consequential on a new duty introduced in the Housing Bill, which is presently in another place. Amendment No. 84 is a drafting amendment to take account of Amendment No. 83. Amendment No. 87 adds to the descriptions of disposals that are exempt

26 Mar 1996 : Column 1673

from the repayment condition a disposal by way of enfranchisement, or lease extension, under Part I of the Leasehold Reform Act 1967. The 1993 Act is already included. Amendments Nos. 261, 262 and 269 share the intention of making it clear that the savings of the 1989 Act can be made under other orders as well as the commencement orders for this legislation. This proposal is intended to ensure that the transitional provisions for those who have applied for a grant under the 1989 Act can work fully, thus protecting grant applicants' interests. I beg to move.

Lord Williams of Elvel: On the whole, we are happy to agree the amendment and hope that the Committee will accept it. Perhaps the noble Lord can tell the Committee exactly what provision in the Housing Bill in another place requires an amendment to this particular Bill.

Lord Lucas: I am afraid that off the cuff I cannot give an answer, but I will happily write to the noble Lord.

On Question, amendment agreed to.

Clause 47, as amended, agreed to.

Clause 48 [Condition for repayment on disposal: renovation grants]:

Lord Williams of Elvel moved Amendment No. 79:


Page 29, line 4, leave out ("with the consent of the Secretary of State") and insert ("where the local housing authority see fit").

The noble Lord said: I move Amendment No. 79 and shall speak also to Amendments Nos. 81, 82 and 115. The purpose of these amendments is to give the local authority discretion as to when to waive repayment or demand lesser repayment in the case of a renovation grant, HMO grant and a common parts grant. Clauses 48 to 50 provide that, when the owner of a dwelling has received assistance in the form of a renovation grant or an HMO grant or, in the case of a common parts grant, the applicant on a landlord's application makes a relevant disposal other than an exempt disposal, grant conditions apply from the date of approval until five years from the date of grant completion, requiring repayment to the local housing authority on demand of the amount of grant that has been paid. Apart from exempt disposals, as defined by Clause 57, the only general exception will arise where an elderly or infirm owner makes a disposal with the intention of moving into sheltered accommodation or care, or where an owner is moving in in order to care for an elderly or infirm member of the family.

The requirement to repay grant if the property is disposed of within five years in our view is somewhat onerous and may deter applications and, ultimately, impede improvement. That will be of particular consequence in housing renewal areas. The grant condition period needs also to be seen in conjunction with other conditions imposed in order to qualify for grant assistance; namely, the three-year residency pre-qualifying period. I understand that the Government will introduce amendments to the three-year residency pre-qualifying period, so I shall not insist on that.

26 Mar 1996 : Column 1674

Nevertheless, the proposal will make the workforce less mobile, and, in general, we believe that there should be a greater discretion for local authorities to waive repayment or to judge what lesser repayment is necessary, as they wish.

Amendment No. 115 has as its purpose to remove the Secretary of State's power to determine what action it is reasonable for local authorities to take in recovering repayments of grant. I do not want to go through all the arguments because they are those I advanced on the previous amendments. But a local authority at the moment has a duty to recover grant payments made on property when that property is sold within a specified period. Authorities also have a discretion to waive grant clawback provisions under certain circumstances. There are problems with that, and I do not want to go on about negative equity and all the rest of it.

The reasonable steps to be taken by a local authority to retrieve grant clawback should be established at the discretion of the local authority, not by the Secretary of State. So the amendments to which I am speaking, and the amendment which I am moving, increase the power of a local authority to determine its own future and its own ability to act in this sphere. I believe that it is within the thrust of the Bill to allow local authorities to determine what they should do and what they should not do, rather than have the Secretary of State sitting on top of them. I beg to move.

Earl Ferrers: Of the four amendments to which the noble Lord has spoken, perhaps I may start with Amendments Nos. 79, 81 and 82. We believe it to be a matter of principle that, where a householder or a landlord receives public money for a specific purpose--in this case, to enable the householder to continue living in his home, or the landlord to improve a property for letting--he should repay that money if the purpose for which he received the grant no longer applies. It should not be possible, therefore, to use the grant merely to increase the grant applicant's profit on the sale of the improved property. It would not be reasonable to require repayment for an indefinite period, as the benefits from the grant-aided repairs and improvements will diminish as time goes by. We believe five years to be a reasonable period for a condition requiring repayment on disposal to apply.

There are, of course, circumstances beyond the control of the grant applicant which may cause him to dispose of the property within the condition period. The most common of these are allowed for in the exempt disposals in Clause 57 and the local authority's discretion under Clause 48(5) not to demand repayment in certain circumstances. In most other cases where there is a disposal of the property within the condition period, a decision not to demand repayment will need very careful consideration.

We accept that there are cases where it would not be appropriate to demand repayment of grant from the applicant. For this reason, each of the clauses setting out the conditions for repayment of grant on disposal of the grant-aided property contains a provision allowing the local authority to decide whether a case should be made

26 Mar 1996 : Column 1675

for the waiver of a demand for repayment or for demanding a lesser amount with the consent of the Secretary of State.

The need to obtain the Secretary of State's consent gives an opportunity to decide under which circumstances the demand for repayment should be waived and to ensure that the same criteria are applied in each case. It also gives the opportunity for the Secretary of State to consider whether, in the light of the cases referred to him, he should use his powers under Clause 57 to add to the descriptions of exempt disposals under that clause. These amendments would remove the necessity for the Secretary of State's consent. For the reasons that I have given that would be undesirable.

I turn to Amendment No. 115. Local housing authorities may claim an Exchequer subsidy of 60 per cent. of what they spend on grants under Part I. Therefore, for each of the grant payments reclaimed, the local authority will have received Exchequer subsidy. The Secretary of State is accountable for all subsidy payments made to local authorities in respect of this legislation. He is required to apply conditions which are fair to all authorities concerned and to safeguard public money.

Where an authority receives a repayment of some or all of the grant in respect of which Exchequer subsidy was paid it is fair and proper that the subsidy element of the amount recovered should be repaid to the Exchequer, together with an appropriate percentage of any interest received by the authority. It is the responsibility of the Secretary of State to see that this happens.

Amendment No. 115 would have the effect of preventing the Secretary of State from requiring payment in respect of any part of the interest that would have been received had the local authority taken reasonable steps to recover the grant. It would also remove the Secretary of State's power to determine what steps would be reasonable.

Where recovery is not made because of the negligence of the local authority, it is fair and proper that that authority should have to meet the same repayment requirement as other authorities which have carried out their duties more diligently.

In the interests of parity of treatment between local authorities nationally, we also believe it to be right that the Secretary of State should have the power to determine what steps would be reasonable.

I believe that the clause as drafted ensures fair treatment for all local authorities. I hope that on consideration the noble Lord, Lord Williams, will realise that the Bill is better than it would be were his amendments applied to it.


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