Chamber
Meeting of the Parliament 08 December 2010
08 Dec 2010 · S3 · Meeting of the Parliament
Item of business
Property Factors (Scotland) Bill: Stage 1
This debate on the principles of the bill and the issues that are to be addressed at stage 2 has been good and consensual. I congratulate Patricia Ferguson and The Herald and the Evening Times on their campaign.
I will begin by addressing an issue that clearly needs to be addressed at stage 2: the dispute resolution mechanism. Costs are a relevant factor, particularly these days—Duncan McNeil mentioned that on behalf of the committee. There are three relevant points about costs. I will give members some facts that will obviously be included in the consideration of the best way forward.
First, the cost per private rented housing panel case is running at just over £2,000. Under the ombudsman system that is run by Ombudsman Services: Property, which used to be called the Surveyors Ombudsman Service, the costs are an annual subscription fee per member—which is the factor—of £150 plus VAT and a fee of £335 plus VAT for each case that is investigated. There is a wide difference in costs between the panel approach and the ombudsman approach.
The second point about costs relates to who pays. Under the current arrangements, the Scottish Government—that is, the taxpayer—picks up the costs associated with the housing panel. If those arrangements continued, I imagine that there would be similar costs for dispute resolution in relation to factors. At the moment, the cost for the current panel is running at £440,000 per year. Under the ombudsman system, as things are at present, the taxpayer does not pay any of the costs, which are entirely levied on the factor, and the factor is liable to pay each time a case is raised against them. It seems to me that, whether we go down the panel route or the ombudsman route, it would be very unfair for the taxpayer to pick up the cost for errant factors.
The third point about costs relates to the overall budget. As I said, the current budget for the existing panel is £440,000, and it deals with around 220 cases per year. I would imagine that, particularly in the early years after implementation of the bill, there might well be more than 220 cases per year. If the taxpayer has to pick up the bill, we need to factor in the additional cost that would be involved in doing so. As Duncan McNeil highlighted, in considering the way in which we handle dispute resolution, the cost of the alternatives needs to be examined in detail.
I will begin by addressing an issue that clearly needs to be addressed at stage 2: the dispute resolution mechanism. Costs are a relevant factor, particularly these days—Duncan McNeil mentioned that on behalf of the committee. There are three relevant points about costs. I will give members some facts that will obviously be included in the consideration of the best way forward.
First, the cost per private rented housing panel case is running at just over £2,000. Under the ombudsman system that is run by Ombudsman Services: Property, which used to be called the Surveyors Ombudsman Service, the costs are an annual subscription fee per member—which is the factor—of £150 plus VAT and a fee of £335 plus VAT for each case that is investigated. There is a wide difference in costs between the panel approach and the ombudsman approach.
The second point about costs relates to who pays. Under the current arrangements, the Scottish Government—that is, the taxpayer—picks up the costs associated with the housing panel. If those arrangements continued, I imagine that there would be similar costs for dispute resolution in relation to factors. At the moment, the cost for the current panel is running at £440,000 per year. Under the ombudsman system, as things are at present, the taxpayer does not pay any of the costs, which are entirely levied on the factor, and the factor is liable to pay each time a case is raised against them. It seems to me that, whether we go down the panel route or the ombudsman route, it would be very unfair for the taxpayer to pick up the cost for errant factors.
The third point about costs relates to the overall budget. As I said, the current budget for the existing panel is £440,000, and it deals with around 220 cases per year. I would imagine that, particularly in the early years after implementation of the bill, there might well be more than 220 cases per year. If the taxpayer has to pick up the bill, we need to factor in the additional cost that would be involved in doing so. As Duncan McNeil highlighted, in considering the way in which we handle dispute resolution, the cost of the alternatives needs to be examined in detail.
In the same item of business
The Deputy Presiding Officer (Alasdair Morgan)
SNP
The next item of business is a debate on motion S3M-7531, in the name of Patricia Ferguson, on the Property Factors (Scotland) Bill. Time is fairly tight for...
Patricia Ferguson (Glasgow Maryhill) (Lab)
Lab
I am pleased that we are debating the Local Government and Communities Committee’s stage 1 report on the Property Factors (Scotland) Bill, and I would like t...
Duncan McNeil (Greenock and Inverclyde) (Lab)
Lab
I am pleased to be taking part in the debate as convener of the Local Government and Communities Committee. We were the lead committee that looked at Patrici...
The Minister for Housing and Communities (Alex Neil)
SNP
I welcome the opportunity to debate the Property Factors (Scotland) Bill, which was introduced to the Parliament by Patricia Ferguson. The Government recogni...
Mary Mulligan (Linlithgow) (Lab)
Lab
I, too, am pleased to take part in the stage 1 debate on the Property Factors (Scotland) Bill. I congratulate Patricia Ferguson on getting the bill to this s...
David McLetchie (Edinburgh Pentlands) (Con)
Con
Like other members, I congratulate Patricia Ferguson, the bill’s sponsor, on her persistence and dedication in bringing this measure to Parliament and, I mig...
Jim Tolson (Dunfermline West) (LD)
LD
The Liberal Democrats welcome the member’s bill that Patricia Ferguson has introduced and offer our congratulations to her. I also congratulate the clerks, w...
Sandra White (Glasgow) (SNP)
SNP
I, too, congratulate Patricia Ferguson and thank her for introducing the bill. As one of the original signatories to the bill proposal, I am pleased to speak...
Paul Martin (Glasgow Springburn) (Lab)
Lab
Like other members, I congratulate Patricia Ferguson on introducing her bill and getting it to stage 1. She should be commended for her hard work and diligen...
Elizabeth Smith (Mid Scotland and Fife) (Con)
Con
Stage 1 is an important staging post in assessing the many issues that are the origin of the bill. I pay tribute to Patricia Ferguson for the methodical mann...
Robert Brown (Glasgow) (LD)
LD
Does Elizabeth Smith accept that clarity on the point that she has just raised might make it easier for some people to accept liability for payments, and not...
Elizabeth Smith
Con
Mr Brown makes a valid point, and I and the Conservative party in general accept it. It is a strong message in the bill.The relationship between the property...
Bob Doris (Glasgow) (SNP)
SNP
I welcome the opportunity to speak on the Property Factors (Scotland) Bill at stage 1. I thank Patricia Ferguson for introducing the bill, and I thank my fel...
Malcolm Chisholm (Edinburgh North and Leith) (Lab)
Lab
Factoring is an enormous issue in the new-build flats in my constituency, albeit not in the traditional tenements, which in Edinburgh have never had factors....
Joe FitzPatrick (Dundee West) (SNP)
SNP
I echo others in the chamber in congratulating Patricia Ferguson on the bill, which touches on a subject that is of great concern to many of our constituents...
Robert Brown (Glasgow) (LD)
LD
On behalf of the Liberal Democrats, I praise Patricia Ferguson for introducing the bill and for the manner in which she has done so. Although this debate wil...
Alex Johnstone (North East Scotland) (Con)
Con
The debate that we have had today and the process that led us to it form a good example of the Parliament at its best. I only wonder why it has taken us so l...
Mary Mulligan
Lab
This has been an excellent debate in which all members have made quite heartfelt pleas for legislation. That is not always the case in this chamber.As Jim To...
Alex Neil
SNP
This debate on the principles of the bill and the issues that are to be addressed at stage 2 has been good and consensual. I congratulate Patricia Ferguson a...
David McLetchie
Con
In relation to those figures—£2,000 a case and 220 cases a year for the private rented housing panel—is the minister convinced that the panel provides value ...
Alex Neil
SNP
The reality is that it is quasi-judicial. As Mr McLetchie will know, anything that is judicial, and particularly anything that involves lawyers, can be extre...
Robert Brown
LD
Will the minister take a further brief intervention on that?
Alex Neil
SNP
Of course, from another lawyer. Are they going to declare an interest, Presiding Officer?
Robert Brown
LD
The issue is about the need to have at the end of the process an enforceable order so that everybody knows where they stand. It is a judicial process and it ...
Alex Neil
SNP
The enforceable order would be the responsibility of other authorities and not necessarily the panel or ombudsman. My point is that there are a great deal of...
Patricia Ferguson
Lab
I very much welcome the content and tone of the debate. I will try to respond as best I can to the issues that members have raised. The debate has demonstrat...
Malcolm Chisholm
Lab
At the recent meeting that I referred to, it seemed that a large number of people were paying 35 per cent commission to factors for their insurance.
Patricia Ferguson
Lab
I would not dispute that. I have heard a variety of figures mentioned. I have also heard about what, in the trade, are loosely called gentlemen’s agreements,...