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Lord Hanningfield: If it could, why are the Government against mentioning it in the Bill? It is obviously an important part of the process.

Lord Rooker: Because we are dealing with Part 2 of the Bill, not Part 1. That is the dilemma that we face. I understand why there is an attempt to use matters relating to health and safety in this part of the Bill, because we are dealing with houses in multiple occupation. We all understand why we are coming forward with the proposals in the first place: it is not just about good management of the property. There are other matters relating to health and safety, but we believe that they are covered in the detail in Part 1.

I shall go back and check on the matter, because the advice that I have is that the provisions could cover fire equipment. What I need to know is that it does cover fire equipment, so I shall seek further advice and drop the noble Lord a note between courses.

Lord Hanningfield: I thank the Minister, particularly for the last part of his reply, and hope that he can clarify the situation for us before the next stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 82 not moved.]

Clause 64 agreed to.

Clause 65 [Tests for fitness etc. and satisfactory management arrangements]:

9 Sept 2004 : Column 723

Baroness Hanham moved Amendment No. 83:


    Page 43, line 7, at end insert—


"( ) On application for a licence, "P" will be required to make a full disclosure of any recorded convictions on the sex offenders register to the licensing authority.
( ) Before the local authority awards a licence it will required to validate both the identity of "P" and information supplied by "P" with the national sex offenders register.
( ) Every HMO manager within an authority's area of jurisdiction will be required to report to that licensing authority any sexual offence conviction gained since the award of an HMO manager's registration.
( ) Every year, local authorities will be required to check the names of all HMO managers within the area of their jurisdiction against the sex offenders register."

The noble Baroness said: This amendment, or something very similar, was moved in the other place, and the Minister there gave a commitment to consider the issue. That is why we are bringing it back at this stage—to see whether by any chance consideration has already been given to it.

At present the Bill does not set out anything to do with sex offences with regard to a manager's fitness to manage a house in multiple occupation, although such crimes could possibly be included under the general heading of "violence". That is not specific, and under most circumstances these days the category is written out as a separate entity. We all know that people who have responsibility for houses in multiple occupation may have vulnerable people in their properties. We are therefore probing again the Minister to explain why such offences were not included in the list of subjects in the Bill.

Amendment No. 83 sets out some of the grounds on which an authority must pay regard to the question of whether a person is fit and proper to hold a licence, were they to have a previous sexual conviction or were they to be registered on the national sex offenders register. They would not be automatically barred, but the fact should be taken into account in deciding whether to grant a licence.

Amendment No. 115 is a related amendment, and would introduce a similar requirement with regard to tests for fitness to cover the later clauses on selective licensing or other residential accommodation. I hope that the Minister has a response that will indicate that the matter has been considered in the interim between the two stages in the other place and here. I beg to move.

Lord Rooker: Clause 65(2)(a) does of course refer expressly to the Sexual Offences Act 2003. An amendment was made to that Act following the debate in the other place.

Clause 65 sets out, among other matters, the evidence that the local authority must consider when addressing the question of whether a person is a fit and proper person to be a licence-holder or manager of a house. That includes whether the person has committed an offence involving fraud, dishonesty, violence or drugs. Following debate in the other place, offences listed in Schedule 3 of the Sexual Offences Act 2003, which attract notification requirements, were

9 Sept 2004 : Column 724

also added to the list. To that extent, I believe that we have met the thrust of the noble Baroness's amendment.

Amendment No. 83 would specifically require a person to disclose recorded convictions on the sex offenders register to an application for a licence to act as an HMO manager, as well as requiring the local authority to verify such information. In addition, the third subsection of the amendment would require HMO managers to inform the licensing authority should they be convicted of a sexual offence since their registration as an HMO manager. The fourth subsection of the amendment would require local authorities to check the names of all HMO managers in their area, annually, against the sex offenders register.

The exact same amendment was tabled by the Opposition and debated in the other place, at which time the Minister said that we would consider the issues raised. As a result, we introduced amendments to the Bill that added offences listed in Schedule 3 to the Sexual Offences Act 2003 to the list of evidence within Clause 65(2). I hope that that satisfies the noble Baroness.

Baroness Hanham: I apologise to the Minister as I had not noticed that the Sexual Offences Act was included in subsection (2). The Minister's reply satisfied me as regards the inclusion of the measure as a result of the considerations in the other place. I thank him for drawing attention to that. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hanham moved Amendment No. 84:


    Page 43, line 40, leave out "and funding arrangements"

The noble Baroness said: Before it can grant an HMO licence the local housing authority has to be satisfied regarding the management arrangements for the property. One of the specific requirements is to take into account the landlord's funding arrangements. The amendment would remove this specific requirement to consider funding arrangements in each and every case.

Before granting an HMO licence the authority must be satisfied that the proposed licence holder and the proposed manager, if different, are fit and proper persons. While there is an indicative list of matters that the local authority must consider, this is not exhaustive and there is no reason why the financial position of the proposed licence holder or manager should not be considered as part of this test if there were circumstances making this appropriate in a particular case.

There may be cases where a local authority has justifiable concerns for financial reasons that a licence holder will not be able to meet his obligations. However, these are likely to be reasonably rare. The Government do not appear to have appreciated the heavy burden that is going to be placed on local authorities as well as on landlords and managers. The licensing system will be administered by

9 Sept 2004 : Column 725

environmental health officers. Environmental health officers have, in most cases, little experience of financial matters. Is it proposed by the Government that environmental health officers should vet landlords' accounts? Is it intended that bank references should be taken up? Anyone who deals with bank references knows that they are written in code. Environmental health officers will not necessarily have the experience to vet accounts or council references.

Local authorities have limited experience of interpreting private sector accounts and probably none at all in relation to landlords who are small businessmen and women. Their experience is limited to one-off contracts. A provision of this kind will also work to the detriment of new entrants because such landlords will have no financial track record.

The financial assessment for a landlord should be left to the financial institutions funding the borrowing on a property. If they are not convinced of the landlord's financial position, there will be no money forthcoming. The automatic requirement to consider the financial circumstances of the applicant is unnecessary and bureaucratic. It will require considerable resources of an entirely new kind not possessed at present by local housing authorities. I beg to move.


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