Building Repairs (Scotland) Bill
Our next item of business is an evidence session with David Stewart MSP on a statement of reasons relating to a draft proposal for a member’s bill. We have before us a proposal for a building repairs bill, along with the member’s statement of reasons about why he feels that no further consultation on the proposal is necessary. I welcome David Stewart back to the committee and invite him to make an opening statement.
Thank you, convener and members of the committee, for allowing me to come along to give evidence, and for allowing me to participate a few weeks ago in the committee’s evidence session on dangerous buildings. I appreciated that.
First, I will explain my draft proposal, and then I will set out the detail of my statement of reasons as to why further consultation is unnecessary. That is clearly the crunch point for today, but I am happy to provide members with as much additional detail about the bill as I can. I welcome questions, but I understand that the crunch question is about whether the bill requires further consultation. That is obviously why I am here today.
As the committee is well aware from its recent evidence session on building MOTs, the subject of dangerous and defective buildings is a significant one that affects all of Scotland. At that meeting, Professor Cliff Hague, from the Built Environment Forum Scotland, set out the scale of disrepair in Scotland’s housing with reference to the 2010 Scottish house condition survey. As all members will be aware, one in four Scottish dwellings is in a state of extensive disrepair and half the owner-occupied dwellings in Scotland are in some form of critical disrepair, as are housing association and housing co-operative properties. The proportion increases steeply to 67 per cent for privately rented properties, rising further to 73 per cent for council and other public sector housing. As Professor Hague said, the statistics paint a disturbing picture of disrepair. I believe that a crisis is looming in Scotland that requires the level of disrepair to be tackled proactively.
My proposal seeks to provide a mechanism to enable local authorities to be more proactive by making provision for them to recover their costs by charging order when they have carried out work on defective or dangerous buildings. It is important to note that the problem that I seek to address applies more widely than just to residential property and extends to buildings more generally, including commercial properties, for example.
Members will be aware that only six out of the 32 local authorities in Scotland have ever served formal defective building notices. In the cases in which notices have been served, there has been only a 48 per cent success rate in relation to cost recovery. Alastair Mackenzie from the Scottish Association of Building Standards Managers said in evidence to the committee a few weeks ago that, in spring 2010, there was £1.3 million of outstanding debt to local authorities. That debt has still not been recovered. My proposal is relatively simple, but it has the potential to make a real difference to local authorities’ ability to recover such sums and thereby to enable them to become more proactive in their approach.
I realise that my proposal is just a small part of a bigger picture and that the Scottish Government is actively considering the issue. I do not suggest for a second that my proposal is some magic bullet that will solve all the problems, but it is an opportunity to add to local authorities’ toolkit for the recovery of debt. Members—particularly those who have taken through a member’s bill—will understand that more reasonable and focused members’ bills tend to stand a better chance of success. That is what I am attempting to do with my proposal, but nonetheless I am passionate about my policy, as I believe that it will assist in moving Scotland closer to the ultimate goal of protecting our built environment and, equally important, the health and safety of the public.
A positive by-product of the proposal is that it would provide a stimulus to the hard-pressed construction industry the length and breadth of Scotland. If there is more repair work for local authorities, much of it will be passed to local construction firms in every constituency in Scotland.
I turn to my statement of reasons, which is the principal purpose of my being at the committee today. To assist the committee in arriving at its decision, it might be helpful if I set out briefly the history of my proposal; describe the consultation that I undertook; and say why I believe that a case has been made for my proposed bill, by reference to specified published material.
I lodged my initial draft proposal during the previous parliamentary session, on 16 December 2010. At the same time, I launched my consultation, which was open for responses until 11 March 2011. The consultation was circulated to a wide range of organisations and individuals, including local authorities, community councils and, of course, equality groups. In addition, the consultation was available on the Parliament’s website for anyone who was interested to respond. The consultation concentrated clearly on my main policy objective—the reintroduction of charging orders—although it also sought responses on building MOTs and other subsidiary issues.
As time is short, I will quickly talk about charging orders, which, as members will probably be aware, came into existence in 1959. They were property-related charges; they had a legal standing over other debts; they cost less than £100 to record; and, of course, they could help low-income home owners and tenants who had a full repairing lease to pay for repairs under a burden on the property. Charging orders existed until 2003 but, because of what I believe was a drafting error in the Building (Scotland) Act 2003, they were removed. Members who keep up to date with such matters will know that, in the Housing (Scotland) Act 2006, a repayment charge was introduced, which the minister at the time, Malcolm Chisholm, said was a form of charging order. Again, members who are up to date on the situation will know that the repayment charge mechanism has rarely been used. However, charging orders have had a strong track record in Scotland since 1959.
My consultation paper was developed with the assistance of the non-Executive bills unit, drawing on its experience and best practice. Claire Menzies Smith from the unit is with me today—I thank her for all the help that she has given me.
The consultation was issued to 272 consultees and, because it was genuinely open, it stimulated a wide spectrum of detailed responses that highlighted the merits and potential drawbacks of the proposals. More than 80 per cent of respondents supported the reintroduction of charging orders. I am grateful to those who responded, as their responses helped me to refine my proposal and will be of continuing assistance in developing my policy further.
Unfortunately, having gathered my responses I ran out of parliamentary time to finalise my summary of responses before the session came to an end, when all members’ bill proposals fell. The Parliament cannot publish my summary of responses alongside my new proposal. I have, therefore, taken the practical step of providing a link from my published statement of reasons to my website, where the summary document and all the individual responses can be viewed. The decision facing the committee today, as I pointed out earlier, is whether a case for my proposed bill has already been established by reference to specified published material. I hope that I have convinced the committee that further consultation is unnecessary.
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In conclusion, it is my view that I have met the test that is set out in the standing orders by publishing a recent consultation paper specifically on the issue that I wish to legislate for and by publishing on my website not only the summary of responses, but the individual responses that I received. The committee’s inquiry into building MOTs and dangerous buildings has also provided further published material and a valuable focus on the subject area. I therefore believe that further consultation on my proposal would duplicate effort and incur unnecessary cost and could create the impression of overconsultation.
I hope that I have set out my position clearly. I am, of course, happy to answer any questions that members may have. I thank the committee again for the courtesy of inviting me to attend.
Thanks for that. We move to questions from members. I will kick off by asking you to comment on the number of responses that were received. Forty-three seems a small number of responses. Was the consultation wide enough?
I took advice from NEBU, which does this day in, day out, and I was told that that is quite standard. I point out that two thirds of local authorities responded—by and large, favourably. That is a strong response rate, and there was a high quality of response. I took advice on whom I should send the consultation document to, and I am convinced that my consultation followed the customary practice for proposed members’ bills in the history of the Parliament from 1999. It was also comprehensive in terms of the groups that I covered, which included all housing associations and community councils. I think that the return rate was reasonable and comprehensive. The key point is that the consultation ensured that my initial statement, which was about charging orders, was verified. If it had not been verified, I would not be here today because I would not have taken the bill proposal any further.
Okay. Have there been any significant changes to the bill proposal since your consultation?
Yes. As you know, the consultation covered a wider area than charging. It also addressed building MOTs, which the committee has also looked at, and timescales—whether there is enough time for work on dangerous and defective buildings to be carried out. I also considered how the identity of an owner can be verified, especially in relation to houses in multiple occupation. The City of Edinburgh Council, in particular, has looked at that. All such measures have merit, and I am sure that the Scottish Government will bring them forward. When I have spoken to ministers, it has appeared clear that some work will be done on them.
My view, therefore, was that I should stick to one central, clear proposition. Undoubtedly, that is the proposition on charging orders. The position from 1959 to 2003 was, “If it ain’t broke, why fix it?” In simple terms, it could be argued that my proposed bill would rectify a drafting mistake from 2003. From speaking to local authorities, I believe that there is overwhelming support for that—I think that the committee got that impression when it spoke to SABSM a few weeks ago.
Thank you for your explanation. You mentioned that repayment orders were introduced in 2006. Can you explain the difference between the repayment order and the charging order? Was that specifically consulted on?
That is a good point. I have done quite a lot of work on that issue. Sometimes, one has to be a bit of a detective to work out what has happened in the past. Malcolm Chisholm was the minister when the 2006 act was passed and I have spoken to him about the issue. It appears that there was a drafting mistake, as a cost-recovery opportunity was missed out of the 2006 act. At a late moment, the committee identified the mistake and Malcolm Chisholm introduced repayment orders at stage 3. They are from the same family as charging orders and would apply generally in housing.
I stress that if councils took action under the 2003 act and carried out work on dangerous or defective buildings, the cost recovery that I am suggesting would be applicable. Currently, local authorities have no choice in relation to dangerous buildings—there is a statutory obligation to act. However, the problem that I have identified is that there is no statutory obligation in relation to defective buildings, and only a few local authorities are carrying out work on such buildings. Under my proposed bill, if work was carried out on dangerous or defective buildings, charging orders would come into play. They would also apply to commercial buildings, where the 2006 legislation does not apply.
In summary, charging orders will be part of the suite of tools—the toolkit—that is available to a local authority officer in the building control department who is involved in a case of dangerous or defective building work and who wants to secure cost recovery from the owners. Most owners pay, so there is no problem. Charging orders would apply only in marginal cases where local authorities needed to carry out cost recovery in addition to the procedures that are currently open to them. My proposed bill is a very strong and necessary piece of legislation about which local authorities are very enthusiastic.
Have those who would be affected by the charge as it applies to commercial buildings been consulted, and did they respond to the consultation?
All interested groups were considered. I stress that I am not trying to change the current obligations, which are very simple. Whether an owner runs a commercial building or their own home, they are responsible for repairs, and that will not change in any way. I am merely suggesting that if a local authority had to carry out the work and wanted to secure cost recovery, it could use a charging order, it could undertake a voluntary arrangement, or it could go to the sheriff court and get cost recovery in the way that currently exists.
The advantage of charging orders is that they are higher up in the hierarchy of recovery of funds. For example, if a firm goes into liquidation, a charging order against the title is higher up the hierarchy than other debts. It is also very cheap. Someone who goes to court can be charged up to £5,000; a charging order costs £100. It is a well-trodden path and a simple mechanism. I have also consulted those who own property. My proposal will not change matters for owners; it will change the ability of local authorities to get their money back when they have carried out work on commercial buildings or housing that is essential for the safety of the public.
Good morning, Mr Stewart. My question goes back to the consultation that you have done so far, particularly with the Scottish Government, which has history in this regard, so I reckon that there is quite a lot of information. I am not asking you to praise the Scottish Government, but are you satisfied that you have got out of it all the information that you can in order to proceed to the next stage without any need for further consultation? What discussions have you had, in broad terms?
I had a positive and useful meeting with the previous minister, Aileen Campbell, in September. I feel that the bill is uncontroversial—I would say this, wouldn’t I?—because it is in everyone’s interests to ensure that the health and safety of the public is considered, that we stimulate the building industry, and that we help local government to be assured that it will get its money back when it has done essential work. That is the key. In advance of my meeting with Aileen Campbell, her officials got in touch with me to give me some general advice. While it is obviously up to the Government’s business managers to decide what legislation is progressed, I am in no doubt that there will be such legislation in future. As members will be aware, if the Government decides to legislate on this matter, my bill falls, because that is part of the member’s bill procedure. Of course, on one level I will be very happy if that happens. I want the bill to go forward because it addresses a big gap in dangerous and defective buildings legislation, but it makes no difference to me personally whether that is achieved by me or by the Government. Between now and stage 1, I will be happy to meet Mr Mackay and Government business managers, as well as local government and other interested parties, to discuss the issue further.
Constituents who knew that you were working on the matter have asked whether, if the bill progresses through the member’s bill route, you have any idea of the timescale involved. Do you get the feeling that it will get nods along the way?
As members will know, I am required to get 18 members to support the bill, one of whom must be a non-Labour representative on the Parliamentary Bureau. I can reveal to members that I have the required number and meet the tests. Then, with NEBU, we will work with the parliamentary draftsmen to ensure that the bill is properly drafted, and at some point it will come before your committee at stage 1. I doubt that that will happen before the summer recess, but I hope that it will be in 2012, perhaps in the autumn.
Many of the 43 responses that you have received are from those one would expect to respond, such as local authorities and housing associations, which have the responsibility of ensuring that everything is right and proper. Are you surprised that some people have not participated in the consultation? What key areas have those who have responded raised with you?
As far as local authorities are concerned, my proposed bill is central to their work, so I was extremely encouraged to get responses from two thirds of them and, by and large, those responses were positive. However, local authorities do not own the issue; it goes much wider than that. We could have had more responses from housing associations but, in effect, I have not stopped consulting because, until I have finalised my proposals, I am open to being spoken to by housing associations, landowners and so on. Following press coverage of the proposal, quite a few individuals have written to me.
On the numbers, NEBU has advised me that, on the basis of past custom and practice, the response rate is fairly good, so I am quite happy with it, although I do not believe that the response process so far is necessarily the finished article. If I get further useful responses, I will take them on board. The key thing, as I have already pointed out, is that the charging order is a well-recognised creature, so I am not inventing a random technique. I am reintroducing a technique that worked from 1959 until 2003. That is why local authorities have been so positive—they know that it worked well. The City of Edinburgh Council said that its deletion in 2003 was a big mistake. I am just trying to undo that mistake and rectify the problem.
I thank David Stewart for coming to our meeting. I have an obvious interest in this area—it was me who asked that the committee hold a session on building MOTs.
You said that the reintroduction of charging orders would mean preferential treatment in the paying back of debts. Would the charging order debt always rest with the owner, or would it sometimes carry forward with the building? My great concern with a defective or dangerous building would be that the council moved in, but because the person who owned the building had gone bust, the charging order would rest with the building, which would deter new ownership of the building and lead to its being a blight on the community for a very long time. Could you talk us through the effects of charging orders? Would the charging order debt ever rest with the building?
Kevin Stewart makes a good point. I am sure that members are aware of examples in their constituencies of the scarring of a landscape by buildings whose owner has disappeared and with which no one wants to get involved. In my area, in Fort William, there are classic examples of buildings that have not reached dangerous building status. That is where the problem lies, and it is a huge one.
If charging orders were reintroduced, they would form part of local authorities’ armoury. When a building is dangerous, they have to take action. Let us say that a disco burns down in Aberdeen and the council has to intervene. It must make the building safe—it has no choice. A council must intervene when a building is dangerous. The problem is how it recovers its costs. At present, it can decide to adopt a voluntary arrangement—that often happens. Councils will take legal advice about the next step. They can use conventional sheriff court debt recovery—as I pointed out, that will still be available to them—but it is expensive. Under my proposal, they will be able to go ahead with a charging order, if they think that the building meets the test for such an order.
Normally, the debt from a charging order would apply to the title. In other words, if someone sold the property, they would normally clear the debt or the new owner would have to take on responsibility for it. I recognise that the fact that there is a burden on a property could put off people who want to buy it—that is just part of the nature of charging orders.
However, local authorities have been hit really badly by the problem. The main way in which my proposal will make a difference relates not to dangerous buildings, on which councils already have to act, but to defective buildings. As members know, all dangerous buildings were once defective. If local authorities can get in early, that will be a lot cheaper for them and for owners, and it will be a lot better for the public. Currently, there is a grey area between defective and dangerous. What can happen, to take the example of Aberdeen, is that roof slates can fall off buildings and cause a real danger to the public because the local authority has not intervened.
In answer to your question, charging order debt would normally remain as a burden on the property, but I stress that the key point is that it will not be compulsory for local authorities to use a charging order. It will be part of their armoury. If a building is a suitable case for the use of a charging order, councils will be able to use one. If not, it will be open to them to use the normal route, which is civil debt action in the sheriff court.
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We are straying into the detail of the bill. Our focus today is on Mr Stewart’s statement of reasons about why he feels that no further consultation is necessary. Are there any other questions on that issue?
Among the 19 per cent who responded negatively to the consultation, was the burden issue one of the reasons for their negative response?
Obviously, it is difficult for me to determine the numbers and value of properties, but one or two property owners were not keen on any new bureaucracy. I am sure that all members will be aware of that general view, and it is understandable that we hear that from the business community. We do not want to create extra bureaucracy and costs for business. However, the vast bulk of respondents—more than 80 per cent—were in favour of charging orders. That is the key point that I would like to leave with the committee.
Were any local authorities concerned about the burden issue and having blights that could not be dealt with because of a burden?
If I remember correctly, all but one local authority were in favour of the reintroduction of charging orders. They are not something new—local authorities have all had experience of working with them. I will confirm the detail to Mr Stewart, but I think that the vast majority of local authorities saw more benefits than negatives.
As there are no further questions, I thank David Stewart for his evidence, which we will discuss in private later.
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Meeting suspended.
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On resuming—