Finance Committee

Meeting date: Wednesday, December 12, 2012

Official Report 428KB pdf

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High Hedges (Scotland) Bill: Financial Memorandum

Item 3 is to take evidence as part of our scrutiny of the financial memorandum to the High Hedges (Scotland) Bill. I welcome Mark McDonald MSP back to his old stomping ground on the Finance Committee, albeit that he is in the hot seat today. Mark McDonald is the member in charge of the bill. He is accompanied by John Brownlie and Gery McLaughlin from the Scottish Government bill team.

Mark, do you want to make a brief opening statement?

Convener, I have no opening statement. We will just go straight to questions.

I will start the questions, all of which will be specifically on the financial memorandum.

We have had a number of issues raised with us about local authorities being able to fix different levels of fees. What is your thinking behind that?

Sorry, can you repeat that? I did not quite catch the question.

Some local authorities have raised concerns about the ability to fix different levels of fees for different applications. What is your thinking behind having that flexibility for local authorities to fix different levels of fees?

As part of the initial stages of proposing the bill, I consulted with local authorities in England and Wales, where similar legislation has already been enacted. The evidence from there shows that the fee level varies from authority to authority and is based on each authority’s calculation of the costs that will be incurred from enforcing the legislation. Those costs can potentially vary from authority to authority depending on, for example, the rate of pay for individual officers, the number of officers who might be involved and other factors that might be included. I have tried to encapsulate a broad range of where the fee levels might sit, but the financial memorandum is not prescriptive in any sense.

Might not some people who have a problem with high hedges find the fee a bit onerous?

Undoubtedly, some people may view the cost for accessing dispute resolution as being difficult to bear. I simply reiterate that the bill is essentially an enabling measure, which will provide powers for local authorities to use. It will be for a local authority to decide what fee to charge and how it wishes to administer that fee. For example, a local authority might choose to offer a discounted rate to pensioners, or it might offer the ability for the fee to be paid in stages as opposed to all in one go at the beginning. It is really for local authorities, first, to determine and decide the best way to ensure that the effects of the bill are cost neutral to them and, secondly, to ensure that they do not put in place unnecessary or unjustifiable barriers to people who want to access the process.

Some local authorities do not believe that the bill would be cost neutral. For example, Angus Council states:

“there is no recognition of the cost to authorities of serving, monitoring and enforcing notices.”

Sure, I note that a number of the local authorities say that, but the financial memorandum is indicative rather than prescriptive. If local authorities consider that other costs need to be factored in, obviously that is a decision for them to take as part of their fee-setting process. Undoubtedly, elected members at local authority level will receive reports to their committees that say, “Here is the cost and here is why we believe that such costs will arise.”

The principle behind the fee-setting provisions is that the measure should wash its face in terms of the costs. I looked at the houses in multiple occupation legislation, where it is very clear that the HMO licence fees must cover the administrative costs but cannot be used as a revenue-raising mechanism. I approached the issue using that sort of principle.

The indicative fees are a result of discussions with local authorities in Scotland and in England and Wales. Some local authorities might consider that they have particular difficulties or individual circumstances that have not been captured within that. They will be free to factor that in when they set their fees.

11:30

None of the responses has said that the bill will be revenue neutral—they all suggest that it will create an additional burden on local authorities. For example, East Renfrewshire Council, when asked whether the financial implications are accurately reflected in the financial memorandum, stated:

“No ... The Bill cannot do other than increase the staff time and resources involved.”

It continued:

“The more protracted enquiries are likely to entail legal costs, including time and Title searches.”

When asked what other costs might be incurred, the council said that there will be

“additional training, staff, equipment, and legal costs”

of pursuing people who might simply refuse to pay or who might be difficult to trace. In my constituency, where about 37 such cases are on hold, some owners just cannot be traced. Nobody seems to know who owns the properties.

Before you respond, I must point out in defence of the proposal that North Lanarkshire Council has said that

“administration costs of up to £500 look adequate considering there is no current charge for any time spent on this currently.”

I do not want to give the impression that everyone is being negative, but there are concerns. Even though South Lanarkshire Council was not as opposed as East Renfrewshire Council—which thinks that it will have a disproportionate number of cases—it states:

“the proposal does not take account of the costs of dealing with enquiries to local authorities”.

On this week’s “Sunday Politics”, Vincent Waters, the environment convener of East Renfrewshire Council, said first that the council welcomes the bill and believes that there will be a drastic drop in the number of complaints—he said that they will drop to a “tiny trickle”. From the elected member perspective, that local authority certainly seems to think that the bill will be helpful.

The English example bears scrutiny and perhaps gives us an indication of what is likely to happen. For example, the Royal Borough of Windsor and Maidenhead, which we would expect to be a fairly leafy area where hedges might be prevalent, had 300 plus inquiries when the legislation first came into effect. In the period from 2005 to 2011, it has had 20 formal applications to have disputes adjudicated on, but has had to take enforcement action on zero occasions. That means that, when notices are served, the owners comply with them.

That is borne out in almost all the local authorities that we spoke to, which are listed in the financial memorandum. South Tyneside Council had one case in which it had to take enforcement action but, beyond that, those local authorities gave no evidence of cases in which they had to take action. Such action is an option in the legislation south of the border, but it seems clear from the evidence that that does not happen as standard practice.

I have one final point before I open out the discussion to colleagues.

Paragraph 81 of the financial memorandum states:

“the costs will ultimately fall on those involved in the dispute; both the applicant and the hedge owner.”

That will cause concerns. Some people will take the view that, although their next-door neighbour has unilaterally decided to allow his hedge to grow 20 feet high in front of their windows, they will possibly have to pay £400 or £500 to get the council to pursue him to get the hedge cut. Would it not be better if the person who has grown the hedge and decided not to participate in the dispute mechanism had to refund the costs of the application? It seems that whether someone is innocent or guilty—if we can use those expressions in this context—they will be out of pocket. If my next-door neighbour decided to grow a hedge, I would have to pay a few hundred quid to get it cut. An element of fairness is absent.

A complexity would be introduced if we tried to deal with that. Let us take a made-up example in which two individuals live next door to each other and there is a dispute over a hedge. If neighbour A applies to have neighbour B’s hedge dealt with, the local authority agrees and serves a remedial notice, and neighbour B then complies with the notice and gets the work done, the local authority will not have to recover any costs of hedge maintenance or lopping. If the burden of the fee shifted, the local authority would have to pursue costs of a few hundred pounds, rather than a few thousand pounds, and that would perhaps be a less cost-effective use of time. I am wary of getting into a situation in which councils might have to pursue costs of a couple of hundred pounds simply because we have decided that the burden of the fee should shift.

The opposite of that is that someone whose next-door neighbour is a pensioner and cannot afford a £500 fee can just decide not to cut their 20-foot high hedge because they will not have to refund the money. Alternatively, if they had to refund the money, they might decide that they do not want to involve the council and that they might as well cut down the hedge now because, ultimately, they will have to do so. That avoids the entire process having to be gone through.

The thing to bear in mind is that the vast majority of cases will probably deal with themselves once the bill comes into effect. The evidence from south of the border indicates that the vast bulk of cases are dealt with once such legislation comes into effect, without the need for formal complaints. A small number of intractable cases will have to go to some form of adjudication. I made it clear that it is for local authorities to determine what they do with fees, such as how they are structured; what discounts, if any, they offer, depending on individual circumstances; and whether to offer payment by stages, to allow people to access the process.

The bottom line is that, if I were a local councillor whose local authority was responsible for administering the scheme, and I was receiving complaints from constituents who could not afford to access the process, I would consider ways in which my local authority could make the process more affordable to access. The bill is an enabling one that gives the power to local authorities. I think that they will look carefully at how to deal with the situations that will arise and how they can avoid unnecessarily preventing people from accessing the process.

I will open up the discussion to questions from other members.

The convener has grabbed many of the obvious questions, so the rest of us are probably struggling.

The responses from East Renfrewshire Council and North Lanarkshire Council are different. I realise that they are both mixed areas, but many of us might think that East Renfrewshire is a better-off area so there might be more disputes and that North Lanarkshire would be the opposite. Will the situation be patchy across the country? I hate the term “postcode lottery”, but that could be used in this situation.

There will be variations from local authority to local authority. I do not imagine that there will be too many complaints in places such as Orkney and Shetland, for example. There will be variations, depending on the circumstances in local authority areas. The evidence from the campaign group Scothedge indicates that complaints are more prevalent in some local authority areas than in others.

You said that individual local authorities will have freedom to come up with charging regimes. One local authority could decide that the average cost is £300 and everybody will pay that, but another could decide that the average cost is £300 and it will charge some people £200 and some £400, depending on their circumstances. Would that be possible under the bill?

The evidence from down south is that one charge is levied. I do not imagine that local authorities would look to charge people different fees based on individual cases.

One argument has been that poorer people might not be able to afford the fee. If a council wanted to help poorer people, that would mean charging better-off people more.

It does not necessarily mean charging better-off people more than the fee that is set; it means considering ways in which the fees can be charged. A local authority might wish to offer a discount to those who demonstrate an inability to pay. That is not the same as having a higher fee above the standard one. Councils might also wish to consider ways in which payments can be staged. I am not being prescriptive on how local authorities levy the fees. It would be difficult if we got into charging higher and lower fees as standard.

Some local authorities have suggested that the investigative process and finding out who owners are could take ages and therefore cost a lot of money. I presume that, if a council could not find the owner, it would in some cases be cheaper for it just to cut down the hedge.

The evidence from south of the border is that the number of times that councils have had to take enforcement action because a hedge owner has not taken action is minuscule. In the example that you described, the local authority would still need to recover its costs, whether or not it chose to remove a hedge.

The evidence from professional tree officers is that they would not advise taking the approach of complete removal of a hedge, but a local authority would still need to find ways to recover its costs. The number of cases in which a local authority would have to take action would probably be virtually nil.

The possibility of asking my good friend Mr McDonald searching questions is too good to pass up. I am delighted to have the opportunity. I was intrigued to see that he had been in discussion with NATO, until I realised that it was the National Association of Tree Officers.

In the evidence that you have gathered from England, the fees vary quite a lot among the local authorities. I see that Sandwell Council has no fee for applications, whereas the Royal Borough of Windsor and Maidenhead charges £600. It is clear that the council with no fee has decided to soak up the costs. Of the councils that levy a charge, the lowest fee is £150, which Hartlepool Borough Council charges. I do not understand why the differential in the cost of cutting down hedges is so great. Do you have evidence to explain the variation?

The test that I have put in the bill is that costs can be covered, but such a provision is not necessarily in place in England. We took evidence from a number of authorities. When we spoke to officers at Hartlepool Borough Council and at South Tyneside Council, the point was made that, when the English legislation was introduced, a number of authorities advertised for high hedge officers, before they realised that such posts were not required, because the task could be comfortably dealt with by existing tree officers or arboriculturists.

There is some evidence that fees have been used to deter frivolous complaints. I do not want to put such provisions in the bill, which should be about resolving disputes and ensuring that local authorities do not have to bear the costs of that. We live in times when budgets are tight. We might be talking about small costs, but they should be recoverable by authorities. Fees down south have varied quite widely but, if a mechanism ensured that fees covered only costs, I imagine that fees would not vary as widely.

I think that being a high hedge officer would have been a scoosh as a job, given the numbers of applications. One officer could do the whole of England.

You have more or less answered my next questions, but I will absolutely eke out the issue. You sound as if you are saying that the legislation in England allows councils to run the operation as a revenue-raising scheme when they get applications. Would not that be the case in Scotland? Is the bill framed such that councils could only recover costs and could not decide to raise additional funds on the back of applications?

The bill says:

“A fee paid to an authority may be refunded by it in such circumstances ... as it may determine.”

It also says:

“A fee ... must not exceed an amount which it considers represents the reasonable costs of an authority in deciding an application”.

A local authority could not charge more than dealing with a case would cost.

It is worth saying that, if we extrapolate from the evidence from south of the border to the number of cases that might occur in Scotland, a local authority would be unwise to try to use the activity as a revenue-raising mechanism, because the evidence from south of the border is that the initial flurry of inquiries reduces to a small number of complaints as time goes by. Trying to use the provisions to raise revenue would not be a wise move for any local authority.

11:45

I do not suppose that that would plug the funding gap that they are talking about.

I was surprised by how few applications there have been. It is also interesting to note that the cost that is levied does not seem to influence the amount of applications. I see in the financial memorandum that, where there has been no fee, there have actually been fewer applications than there have been in the place with the highest fee on the list that you have provided. Are you expecting a proportionally similar number of applications over a similar timeframe in Scotland? Do you have any evidence about how many applications are likely?

We have some anecdotal evidence. I do not have it before me, but I would be happy to write to the committee with it after the meeting.

My colleagues might be able to say something about the matter.

The Local Government and Regeneration Committee took evidence on the bill this morning and asked tree officers the same question. Their rough estimate of anticipated numbers in their local authority area is 12 cases.

We can provide the committee with evidence about the number of cases Scothedge has said it is dealing with. That might give a rough indication of the numbers at the initial stage, and what the numbers might look like later on.

As I mentioned earlier, I have 37 cases, but only 12 of those are known to Scothedge—we compared lists—so the cases that you know about from Scothedge might just be the tip of the iceberg. As you said, there will be a big flurry of cases at the beginning. The real issue is how many there are later on.

As has been said, the costs might put folk off. Was there any investigation of capping of fees?

We considered the evidence. Wales has a fee cap. It seems that most people just charge the maximum possible, rather than take account of people’s ability to cover costs. We are, therefore, unconvinced that capping fees would provide the level of protection that one might think it would.

It is clear that recovering costs from the owner has not been a big issue, but it could become one. The deputy convener identified circumstances in which it could be an issue. If the owner could not be found, and the local authority was struggling to recover the costs, what mechanisms will the legislation make available to local authorities to recover costs? Do you think that it will be a big problem?

I do not anticipate its being a huge problem. However, obviously, we have to factor in the possibility that it might be.

Various options are open to local authorities. Obviously, there is the use of the courts to pursue costs, which would involve the recovery of not only the costs of the work that had been undertaken but the legal costs. There is also the option of attaching a land debt to a property, where that debt sits on the property and must be repaid at the point at which the property is sold or the person vacates the property. Those options would be available to local authorities in England as well.

That is interesting. I do not have as many cases as the convener, but my experience is that the problem tends to arise in situations in which people do not know who the owner of the adjacent property is.

There is a provision for an appeal to Scottish ministers, and a cost to the Scottish Government is associated with that. You very usefully set out what the costs are. Would both parties have that right of appeal?

That is correct.

Your constituency does not have the lovely sea views that mine has, Jamie. That is the real issue.

It has the Forth and Clyde canal, which is very nice.

In its written submission, South Lanarkshire Council raised an issue that I want to explore. What is your view on the High Hedges (Fee Transfer) Regulations (Northern Ireland) 2012?

I will be honest; I do not know about the fee transfer regulations for Northern Ireland in detail. My colleagues might be able to assist me.

I would be happy to comment. We are aware of the existence of the fee transfer mechanism whereby the person who has complained has their fee refunded if the case is found against the owner of the hedge. From our most recent discussions with colleagues in Northern Ireland, though, the national body in Northern Ireland does not have any information about how successful that has been. You will be aware that the Northern Ireland legislation is the most recent piece of legislation on the issue in the United Kingdom. It was passed in 2011 so we do not yet have any information about how effective it has been or how it has worked in practice.

I have the regulations here. They came into force only in March this year, after the initial high hedges legislation. It says in the explanatory note:

“Once the remedial notice takes effect, after processing of any appeals, the council will refund the complainant’s fee (if any has been charged) and may then levy a fee on the owner/occupier of the neighbouring land.”

It struck me that that might deal with the point that the convener raised. Although it is early days in Northern Ireland, I wonder whether it is something on which Mark McDonald might reflect.

I gave my initial thoughts on the issue of a recovery mechanism. As I outlined, there is the option in the legislation for fees to be refunded or part refunded where the authority deems that to be necessary. Although we do not yet have enough evidence to go on, I am happy to look at the Northern Irish example between now and stage 2 to see whether it might apply to the bill. However, I do not want to get into a situation in which a local authority has to pursue fairly small sums at what might be a disproportionate cost burden to the authority.

Will the act apply after a reasonable investigation of the circumstances? In other words, rather than the start of the process being that the complainant is expected to pay a fee for this service, in the first instance the council would be expected to write to the neighbour reminding them of the act and saying that there is concern.

The initial stage of the process is that any individual who applies has to demonstrate that they have taken steps to resolve the dispute through other means, for example by writing to the neighbour. We are not explicit about this, but if they have been through mediation, as some people have, the option of last resort is to take an application to the authority. I would expect that most authorities would advise people of the process that they have to go through and the fee that would be levied.

The evidence from south of the border is that there is a checklist, and that if people do not meet all the criteria that need to be met in order for the matter to hit the application process, it goes no further so no fee is charged.

That appears to have exhausted the questions from the committee. No, Elaine Murray has one.

Just because I am leaving the committee, I am being ignored.

There was no indication that you had asked to speak.

You did not see me. That is because I am so short.

You have covered most of my points anyway. I had a question on the possibility of a fee transfer. The legislation in England has been fairly successful, and awareness of the legislation has resolved a lot of issues. I hope that it will work in a similar way here. If somebody is aware of the legislation and has continued not to bother to do anything about their hedge, it is a little unfair if the complainant, who has been unable to get a resolution from the neighbour, ends up being several hundred pounds out of pocket. Perhaps you would look at whether the Northern Ireland example would give extra impetus for people to resolve issues.

I am happy to do so. The Northern Irish example does not yet have the weight of evidence behind it due to its still being in its infancy.

It is worth putting on record that not every case that goes to a complaint will be found in favour of the complainant. There will be people who pay an application fee and go through the process, and the case will not be found in their favour. It is worth bearing that in mind. I am often accused by some of having a bill that is entirely anti-hedge. It is not anti-hedge; it is first and foremost about resolving disputes.

I have a case in which a person feels that their neighbour has raised a spurious complaint, so I appreciate your comments on that.

In response to a question from John Mason you said that a council may decide to reduce the fee for pensioners and so on, and that it would not put the fee up for other people. How can that be cost neutral? The local authority would be out of pocket.

I probably did not explain myself very well. It is for local authorities to decide on the fee that they will charge to deal with the case load that they face. Each case will have to be assessed on its individual merits, and there will be some cases that are more difficult to assess. I am not suggesting that the fee would necessarily capture every single case. It will probably be an aggregation of the average amount of time that will be spent, and there will be variations within that. It may be that taking the approach that I suggest will still allow it to be a cost-neutral method, but that is for local authorities to determine.

There are no further questions. We thank you for coming along.

It is good to be back.

Are members content for me to write to the Local Government and Regeneration Committee, attaching a copy of the Official Report of today’s discussion and the submissions that we have received?

Members indicated agreement.

At the beginning of the meeting, the committee agreed to take the next item in private.

11:56 Meeting continued in private until 12:01.