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The ARCH annual report for 2015-16 is now available to view.

 

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Government offers amendments to Housing and Planning Bill 28/04/2016

Further to the update in our last bulletin, on the first two days of debate on the Housing and Planning Bill in Report Stage at the House of Lords, the government has offered a number of amendments to soften the impact of 'pay to stay' and the phasing out of lifetime tenancies.

 

The debate continued on 18 and 20 April with Peers further discussing the government's proposals for 'pay to stay' and phasing out of lifetime tenancies.

 

'Pay to stay'

 

Peers voted against the government to make significant amendments to the scheme provisions in Part 4 of the Bill making the introduction of a 'pay to stay' scheme discretionary for local authorities in the same way as for housing associations.

 

Peers also agreed amendments to increase the "high earnings" thresholds from £30,000 to £40,000 (£40,000 to £50,000 in London) and to limit any rent increase for households above the thresholds to no more than 10%.

 

Ministers made it clear that they would resist the amendment to make the scheme discretionary for local authorities or permit local authorities to retain any increased rental income rather than surrender it to the Exchequer. However, the Minister made it clear that the introduction of the mandatory Pay to Stay Policy for local authorities"is an important contribution to the government's manifesto commitment to reduce the deficit".

 

Ministers did however offer up further details of how 'pay to stay' would operate including changes to the "higher earnings" threshold outside London and the tapers to be applied to those with incomes above the thresholds, full details of which Ministers said would be specified in Regulations:

 

  • The proposed higher earnings threshold of £30,000pa outside of London will be increased to £31,000pa
  • Income will be defined as "taxable income" which would exclude child benefit, disability living allowance and tax credits.
  • A taper of 20% will be introduced which means that for every pound above the household income threshold, the tenant will be required to pay an additional 20p on their rent.
  • The Regulations giving effect to these proposals will be subject to the "affirmative resolution process" which requires debate in both the House of Commons and House of Lords

 

The Minister gave an example of how the proposed 20% taper would impact on the rent payable by households with income above the threshold:

 

  • A household outside London with a household income of £32,000 will be required to pay just less than £4.00pw additional rent;
  • A household outside London with a household income of £40,000 will be required to pay around £35.00pw additional rent

 

Ministers also made it clear that in calculating the household income, "household" will be defined as "the Tenant, any joint tenants and their spouses, partners or civil partners" and within a household, only the incomes of the two highest earners will count. This means that the incomes of non-dependent children will not be counted unless they are named on the tenancy agreement and only then if they are one of the two highest earners in the household.

 

The Minister also announced that in the first year of operation, the government will not apply a formula approach to the amount required to be paid by councils; and councils will be required to pay the actual amount of money raised through 'pay to stay' to the government.

 

The Minister also hinted that 'pay to stay' may not be introduced where the administrative costs would not be covered by the amounts of additional rent raised from the scheme.

 

Lifetime Tenancies

 

The Bill requires local authorities to grant new tenancies on fixed-term tenancies of between two and five years. However, under pressure from a number of amendments by Peers to the provisions relating to the phasing out of lifetime tenancies, Ministers agreed to bring forward government amendments to the Bill at the Third Reading which would provide local authorities with discretion to grant tenancies of up to ten years in certain circumstances.

 

Details are unclear but this may potentially include the granting of longer fixed-term tenancies to cover the period where a child is in full-time education; and in certain circumstances where the tenant is disabled or of pensionable age.

 

Briefing paper on the debates

 

ARCH Policy Adviser, Matthew Warburton, has produced a detailed briefing paper on the debates in days 3 and 4 of the Report Stage for ARCH members. This is available in the members' area under 'Bulletin news'.

 

The House of Lords scheduled a final session for debate on the Report Stage on 25 April. The Third Reading of the Bill was scheduled for 27 April 2016. 

 

We will provide ARCH members with a briefing summarising the outcome of the Report Stage and the amendments made to the Bill by the Lords prior to the Bill returning to the Commons. 

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