Hansard

Amendment 149 seeks to have the owners’ share of tenement management scheme costs calculated as the local authority thinks reasonable, but with the principle of favouring equal shares among owners. I am concerned because the amendment could weaken the tenement management scheme, and it lacks control to protect home owners. The tenement management scheme is designed to be a process of voluntary agreement between owners that is based on clarity over costs and how they are shared. Amendment 149 would provide for circumstances in which the shares could be altered, potentially to the benefit of owners who would have higher than average shares of the costs. That could result in some owners having an incentive to hold out for a local authority to intervene to reduce their costs, while other owners might resist local authority intervention, because of uncertainty about how their share of the costs would be determined. Amendment 149 would introduce to the existing arrangements under the tenement management scheme a significant change that has not been subject to consultation. It would not be appropriate to introduce the change at this point in the bill’s progress without first having considered the views of local authorities and of owners. I therefore invite Sarah Boyack to seek to withdraw amendment 149. If she does not, I ask the committee to reject it. Amendments 153 and 154 seek changes to the procedure for notification of owners by a local authority when it decides to cover a missing share. Section 30(3) of the Tenements (Scotland) Act 2004 already provides a procedure for service of a notice on a person who cannot be identified or found, which involves delivery of a notice to the property. The approach that is provided for in the bill is consistent with other notices under the 2004 act. To require that a notice be advertised in the press would incur additional and unnecessary costs for local authorities. I can see no reason to alter the current arrangements for one particular type of notice, nor do I see any advantage, from amendment 154, to justify the additional costs to local authorities. For those reasons, the amendments are unnecessary. In some cases, because of the costs, the amendments might deter local authorities from using the useful power that we are giving them. I therefore invite Sarah Boyack not to move amendments 153 and 154 and, if she does move them, I ask the committee to reject them. Amendments 150 and 151 seek to introduce a regulation-making power that would enable registered social landlords to pay for a missing share and recover the costs using a repayment charge. Through the bill, we will introduce discretionary powers for local authorities to step in and provide a missing share where a majority decision allows work to go ahead, and to recover that using a repayment charge. It is right that local authorities, as the strategic housing authorities, should have that role and debt-recovery power. RSLs will be able to engage with the local authority if enforcement or assistance is needed in their area, and I encourage them to do so. I want to be sure that covering of missing shares by RSLs does not occur at the expense of services for tenants, but amendments 150 and 151 do not provide those assurances. I am also concerned that there has not been any consultation on the proposals. It is not appropriate to introduce such a significant change without first listening carefully to views—in particular the views of lenders, who could be adversely affected by the proposal. I would also want to listen to the views of RSLs and the regulator, because some RSLs have constitutional arrangements that could prevent expenditure that is not expressly for the benefit of members. As I do not currently support the introduction of discretionary powers for RSLs to provide a missing share and to recover that through a repayment charge, I do not see the need to introduce such a regulation-making power at this time. The Scottish Government’s proposed work on cross-tenure housing quality standards later this year will provide stakeholders with the opportunity to raise issues regarding housing quality. Contributions to the scope and design of a forum to discuss quality standards are currently being requested, with a planned consultation to follow next year. I want to await the outcome of that consultation before making any changes. I therefore ask Sarah Boyack not to move amendments 150 and 151 and, if she moves them, I ask the committee not to support them. I understand why Jim Eadie and Sarah Boyack have, respectively, lodged amendments 7 and 152, which in some ways reflect the committee’s views in its stage 1 report: 30 years is excessively long for councils to recover their costs. I appreciate the arguments in favour of a shorter period, but I am concerned that they ignore the risks that a shorter period could pose to vulnerable home owners—particularly those who are elderly, living on fixed incomes and with only modest savings. A repayment charge is a powerful debt-recovery tool. It allows local authorities to convert a debt into a security without recourse to the courts and—this is important—without the consent of the property owner. That power must be balanced by safeguards for owners. As matters stand, the 30-year repayment period provides such a safeguard in practice. Sarah Boyack’s amendments would give councils wide discretion to recover potentially significant sums from owners through repayment charges, over short periods of time and without owners’ consent. They would be able to do so without there being a robust replacement safeguard for owners who might not be able to make such payments, which worries me. Sarah Boyack has proposed guidance for councils, but I am not convinced that replacing the 30-year repayment period with guidance offers robust compensatory protection against the risks to vulnerable owners. I am clear that any change to local authorities’ powers in this area would have to be accompanied by strong arrangements to ensure that repayment charges were fair to owners, both in respect of the amount of the charges and the period over which they should be made. The proposed change refers to what the council considers to be “reasonable”. However, there is nothing about a council coming to a view on “reasonable” that requires it to take account of information on the financial and personal circumstances of affected property owners. There is a real risk, therefore, of a council requiring payments at a level that the property owner cannot afford. That could be a problem for many owners: for example, young families who are struggling with a mortgage, or elderly persons who are living on pensions, with only modest savings. For such groups the proposed change could mean real hardship and distress. Furthermore, the amendments do not include any specific right to appeal for an owner who may be subjected to unaffordable financial arrangements. I am concerned about that type of major omission, however well intentioned the proposed change may be. On council recovery of costs, councils already have the option to negotiate a shorter repayment period, or to seek full and immediate recovery through the courts. The existing 30-year repayment period is a backstop. Owners whose property is subject to a repayment charge generally cannot sell the property or create any new borrowing over it without first repaying the council, and the average period between house sales is about seven years. In practice, councils would receive repayment long before the 30-year period. A reduction in the repayment period does not necessarily make repayment more likely. There is in the amendments no provision that would alter what happens for non-payment. If an owner does not pay, whatever the timescale, the council cannot seek to sell the property as a result of the charge. A council can only seek recovery as a civil debt. With a shorter period, there would be situations in which the council would have to place another charge on the property to ensure it received payment, with additional costs for the council and the property owner. For all those reasons I cannot support Sarah Boyack’s amendments, so I ask the committee to reject them. Amendment 35, in the name of Malcolm Chisholm, seeks to ensure that local authorities receive payment before other registered charges on a property are paid. A repayment charge that has been registered by a local authority already has priority over all future burdens. It also has priority over nearly all existing burdens. The exception includes charges that are already registered by the local authority, and a small number of other charges that could be created by other local authorities. As a local authority is already entitled to receive repayment prior to other registered charges in nearly all cases, I do not see any reason to change the current position. I invite Sarah Boyack not to move amendment 35 on Malcolm Chisholm’s behalf, and I ask the committee to reject it if it is moved. I am aware that I am not supporting any of the amendments in the group and I hope that I have explained why. I understand that there are significant concerns, particularly in the City of Edinburgh Council, regarding the issues that Sarah Boyack and Jim Eadie have raised. We acknowledge the intention behind the amendments, but if we were to make such changes it would require legislation and consultation. My officials are more than willing to explore the issues with the City of Edinburgh Council and to discuss how the council might address its concerns within the existing legislative framework. If it is found that that is not possible and changes are needed, we will carry out proper consultation and bring the changes back in other legislation. I am absolutely not just dismissing the amendments out of hand; I recognise the reason behind them, but if we were to introduce such changes at this stage, or even at stage 3, we would simply be rushing them through and we would not achieve what we are all looking for. For that reason, I ask the committee not to support the amendments.