Chamber
Plenary, 18 Jun 2008
18 Jun 2008 · S3 · Plenary
Item of business
Tenancy Deposit Protection Scheme
I congratulate Claire Baker on securing the debate.
I listened carefully to the debate and appreciate members' concerns about the impact that unfairly withheld tenancy deposits can have on tenants in the private rented sector. Members asked me when the Scottish Government will use the provisions in the Housing (Scotland) Act 2006 and require landlords to sign up to a mandatory deposit protection scheme. However, it is by no means clear that such a scheme would be the most cost-effective or efficient way of dealing with the problem of unfairly withheld deposits in Scotland. The Scottish Government is considering the matter.
Much has been said this evening about the number of tenants, and particularly students, who face problems with unfairly withheld deposits. I am aware of the research that a number of organisations have carried out in the area, including the NUS "Brick by Brick" report. It is worth pointing out that the NUS research asked students whether any of their deposit had been withheld rather than whether it had been unfairly withheld. That distinction is important and it underlines the need for a balanced approach that is underpinned by robust evidence.
Members mentioned the success of the mandatory schemes in England and Wales. The Scottish Government is interested in the impact of those schemes, but we believe that the right course of action is to assess the outcome of any formal evaluation of the schemes. There has been no formal evaluation to date and the Scottish Government will not draw conclusions based on headline figures without a more detailed understanding of whether the schemes have an impact on the number of deposits that are unfairly withheld.
It is also the case that there are considerably more landlords and agents in England and Wales to support the costs of a mandatory scheme. The schemes in England and Wales are self-financing. They rely on income from the interest that is accrued against the deposits that are held in the custodial scheme or from the fees that landlords and agents pay to join the insurance-based schemes. Clearly, there are risks to the Government in relation to whether a custodial scheme in Scotland could become self-financing.
The two insurance-based schemes in England and Wales charge fees that range from £58 to £1,600 for landlords and agents. We need to take into account the fees that landlords in Scotland already pay as part of the mandatory landlord registration scheme and for the licensing of houses in multiple occupation. We would be concerned to ensure that the costs were not passed on to tenants.
I listened carefully to the debate and appreciate members' concerns about the impact that unfairly withheld tenancy deposits can have on tenants in the private rented sector. Members asked me when the Scottish Government will use the provisions in the Housing (Scotland) Act 2006 and require landlords to sign up to a mandatory deposit protection scheme. However, it is by no means clear that such a scheme would be the most cost-effective or efficient way of dealing with the problem of unfairly withheld deposits in Scotland. The Scottish Government is considering the matter.
Much has been said this evening about the number of tenants, and particularly students, who face problems with unfairly withheld deposits. I am aware of the research that a number of organisations have carried out in the area, including the NUS "Brick by Brick" report. It is worth pointing out that the NUS research asked students whether any of their deposit had been withheld rather than whether it had been unfairly withheld. That distinction is important and it underlines the need for a balanced approach that is underpinned by robust evidence.
Members mentioned the success of the mandatory schemes in England and Wales. The Scottish Government is interested in the impact of those schemes, but we believe that the right course of action is to assess the outcome of any formal evaluation of the schemes. There has been no formal evaluation to date and the Scottish Government will not draw conclusions based on headline figures without a more detailed understanding of whether the schemes have an impact on the number of deposits that are unfairly withheld.
It is also the case that there are considerably more landlords and agents in England and Wales to support the costs of a mandatory scheme. The schemes in England and Wales are self-financing. They rely on income from the interest that is accrued against the deposits that are held in the custodial scheme or from the fees that landlords and agents pay to join the insurance-based schemes. Clearly, there are risks to the Government in relation to whether a custodial scheme in Scotland could become self-financing.
The two insurance-based schemes in England and Wales charge fees that range from £58 to £1,600 for landlords and agents. We need to take into account the fees that landlords in Scotland already pay as part of the mandatory landlord registration scheme and for the licensing of houses in multiple occupation. We would be concerned to ensure that the costs were not passed on to tenants.
In the same item of business
The Deputy Presiding Officer (Alasdair Morgan):
SNP
The final item of business is a members' business debate on motion S3M-1865, in the name of Claire Baker, on a tenancy deposit protection scheme for Scotland...
Motion debated,
That the Parliament is concerned that the withholding of deposits unreasonably continues to be a problem for tenants in the private rented sector; notes that...
Claire Baker (Mid Scotland and Fife) (Lab):
Lab
I am delighted to speak on tenancy deposit schemes in my maiden members' business debate. It is always a pleasure to be involved in a debate about a matter o...
Robert Brown (Glasgow) (LD):
LD
I apologise, Presiding Officer, as I may have to leave before the end of the debate. The debate is important and is on an issue on which several members, par...
Stuart McMillan (West of Scotland) (SNP):
SNP
I thank Claire Baker for bringing the debate to the Parliament. The issue is important to many people and this is an important time to conduct the debate, gi...
Claire Baker:
Lab
Will the member take an intervention?
Stuart McMillan:
SNP
May I just make some progress first? Thank you.The scheme in England and Wales has been in operation for only one year, and no formal evaluation has yet been...
Claire Baker:
Lab
I believe that enough research—by the NUS, Shelter and other organisations—has been carried out to allow the Government to make progress.A circular was issue...
Stuart McMillan:
SNP
I am sure that, if what Ms Baker says were the case, the Government would look into it, but I am not sure that it is the case. I am sure that the minister wi...
Jamie McGrigor (Highlands and Islands) (Con):
Con
I, too, must apologise for having to leave before the end of the debate.I congratulate Claire Baker on securing tonight's debate. Scottish Conservatives full...
Robert Brown:
LD
That is fine for the good landlords. Does the member have a remedy for the bad landlords, which is where the issue arises?
Jamie McGrigor:
Con
I will come to that in my conclusion.I acknowledge the concerns that lie behind Claire Baker's motion, but ministers should tread with caution before burdeni...
Dr Richard Simpson (Mid Scotland and Fife) (Lab):
Lab
I congratulate Claire Baker on securing this important debate. I was president of the Scottish Union of Students almost 40 years ago and failure to return de...
Jim Tolson (Dunfermline West) (LD):
LD
I congratulate Claire Baker on securing this debate on a tenant deposit protection scheme, which I am sure that most of us would agree is an important subjec...
Johann Lamont (Glasgow Pollok) (Lab):
Lab
I congratulate Claire Baker on securing the debate. In doing so, I reflect on the frustrations of falling on hard times, since the words that were quoted ear...
Mike Pringle (Edinburgh South) (LD):
LD
I congratulate Claire Baker on securing this worthwhile debate.As several members have remarked, everyone has an anecdote about someone whose rent deposit wa...
The Minister for Communities and Sport (Stewart Maxwell):
SNP
I congratulate Claire Baker on securing the debate.I listened carefully to the debate and appreciate members' concerns about the impact that unfairly withhel...
Johann Lamont:
Lab
I am concerned that the minister suggested that the Government is inhibited by the timescale for the evaluation of the schemes in England and Wales. Is it no...
Stewart Maxwell:
SNP
I will come to many other points, but the fact is that the scheme in England has not been formally evaluated. Many members said that it is a shining example ...
Johann Lamont:
Lab
I may have the wrong information, so will the minister clarify when the group last met and when it will meet again?
Stewart Maxwell:
SNP
The group last met in June last year. A meeting was offered to the group in September, but its members decided that they could deal with the issues at hand t...
Johann Lamont:
Lab
Will the minister give way?
The Deputy Presiding Officer:
SNP
The minister is just winding up.
Stewart Maxwell:
SNP
Jamie McGrigor said that there was only a 2 per cent dispute rate in England. That is true, but only two thirds of landlords have joined the scheme. I sugges...
Meeting closed at 18:29.