Official Report 365KB pdf
Town and Country Planning (Fees for Applications and Deemed Applications) (Scotland) Amendment (No 2) Regulations 2010 (Draft)
Item 3 is consideration of subordinate legislation. The committee will take oral evidence from the Minister for Transport, Infrastructure and Climate Change and officials. I welcome the new witnesses joining the minister—Sam Anwar, team leader, and David Reekie, policy officer, from the Scottish Government’s planning, legislation and performance team—and invite the minister to make some opening remarks.
As the committee will be aware, in April planning fees increased for the first time since 2007. Fee levels continue to be modest and represent a very small proportion of a developer’s overall costs.
And I invite the committee to ask them.
I was slightly intrigued by the reference to “errors” in the minister’s opening comments. From a cursory glance over the explanatory notes to these regulations, I see references to “redundant” provisions in previous regulations that need to be tidied up—which is, of course, entirely appropriate, given the march of legislation—but no mention of any “errors”. Will the minister clarify his interesting—and indeed refreshing—comment?
It is always better to fess up before errors are spotted.
I would not have spotted them if you had not admitted to them.
The first error can be found in the table setting out fees for planning applications for erecting buildings other than those for residential or agricultural use. The fee depends on the area of gross floor space, in respect of which there are three categories: up to 40 square metres; 40 to 75 square metres; and over 75 square metres. The current regulations correctly state that the fee for development of floor space up to 40 square metres is £160; however, they stipulate the same amount for the 40 to 75 square metres category. That is an error—the fee should be £319.
How long have these errors existed?
Since we introduced the previous regulations in April.
So we are talking about only a few months.
Yes. As soon as we became aware of the errors, we sought to correct them. I suspect that this is as early as we could have done it.
And by and large they have made no material difference to the revenues flowing into planning authorities from such applications.
I suspect that no planning authority was aware of the errors until we identified them, but I could be proved wrong.
Can you tell us a bit more about the wider workstream that you mentioned in your opening remarks?
We have had over an extended period a number of discussions with COSLA and local authorities about planning fees for larger applications, in particular, in response to indications from the development industry that it would like fees to be higher. Although that might seem unusual, the industry has taken that position because it wants processing agreements to define the period in which the application will be dealt with. The approach is different and we are continuing to have discussions about it.
Does the minister plan to come back to tell the committee about any changes that might result from those discussions?
Such changes cannot be dealt with solely at the minister’s hand; they require secondary legislation. In any case, we are still some distance off and, as I say, discussions are continuing.
I am grateful for that confirmation. Although I perfectly understand the logic behind the suggestion, I see problems arising, not least with regard to people’s perception of the planning process. In my experience, that perception is one of the major problems and obstacles that have to be overcome and I imagine that it will be difficult to persuade people in a community in which a big development has been proposed that the developer is not buying additional services that might be detrimental to their attempts to set out their own case.
I acknowledge the validity of the member’s point, which, of course, forms part of our thinking on the matter. As I say, we are certainly not in a position to say that the proposal will be brought forward.
As members have no further questions, I invite the minister to formally move the motion.
I thank the minister and his officials for their attendance and the evidence that they have provided and suspend the meeting for a changeover of witnesses.
Applications by Creditors (Pre-Action Requirements) (Scotland) Order 2010 (Draft)
Home Owner and Debtor Protection (Scotland) Act 2010 (Consequential Provisions) Order 2010 (Draft)
Item 5 is consideration of subordinate legislation under the affirmative procedure. The Minister for Housing and Communities, Alex Neil, agreed to provide oral evidence to the committee on both orders. I welcome him and his officials, who are Stephen Sandham, team leader; Stephanie Prowse, solicitor; and Colin Brown, senior principal legal officer. Does the minister wish to make any introductory remarks? Of course he does.
Thank you, convener. Perhaps we know each other too well.
For ease of questioning, we will split the orders up. I ask for questions on pre-action requirements and then will take a second round on the consequential provisions.
I am delighted that both orders are before us today. However, I note that article 2(3) of the pre-action requirements order specifically excludes from the information to be provided on the default any costs that could be charged to home owners under the standard conditions of their mortgage.
Although the pre-action requirements do not require lenders to provide information on the amount of legal charges, they require lenders to inform borrowers at the outset of the default that such charges may be recovered from them under the security. We recognise that estimating the amount of legal charges before raising an action would be impossible, so requiring that information to be included would impose an unfair additional burden on creditors and would not give debtors a true estimate of the charges.
Does that mean that, in future, when the lender writes to the home owner, based on guidance, the letter will clearly state that the home owner may also be liable for legal fees in relation to the lender’s court costs should they decide to contest the action?
Absolutely.
The cost benefit analysis for the order reiterates a point about the Scottish Government’s inability to get data about the level of repossessions in Scotland, which was one of the issues that we identified and debated when the bill was going through the Parliament. I ask for your advice on the statement that
As you probably know, Scottish Government ministers, including me, are holding a series of meetings with various ministers in the new coalition UK Government. One of the issues that I am putting on the agenda for my next meeting with Grant Shapps and others—although the date has not yet been fixed—is our requirement for information on the number of repossessions in Scotland to be made available to the Scottish Government. We will probably have to get that information through the formal regulatory agencies rather than through the Council of Mortgage Lenders. We have tried the CML many times—as did the previous Administrations—and we have got nowhere. The CML’s view seems to be that it is a job for the Financial Services Authority rather than for itself to do voluntarily and that, because some mortgage lenders are not members of the CML, in order to get the total picture it would be better for the data to be collected by the regulatory agencies. In the forthcoming meetings that we are arranging with UK ministers, it will be on our agenda to persuade them that the regulatory agencies—under the new regime that was announced by the chancellor last week, I think that it will be the Bank of England rather than the FSA—should give us that information. We will make appropriate representations that the information should be made available.
In essence, your statement on the position of the UK Government describes an historical position and you are pursuing the matter with the new Government.
Absolutely.
I hope that, when you meet Mr Shapps, you will convey to him the support of parties across the Scottish Parliament for the provision of such information to the Scottish Government.
I hand over to my legal advisers on that.
I cannot say that I have figures on that. Stephen Sandham might.
The bottom line is that we do not have any hard data on that. We get some data through our homelessness monitoring returns, which we could provide to the committee, but I do not have that information to hand. I seem to remember that, when the mortgage to rent scheme was being analysed and reviewed, it was suggested that repossessions account for about 8 per cent of all homelessness applications, but I would have to check that figure. I would be happy to provide the details to the committee.
Given such a modest percentage, does the accompanying analysis perhaps overegg the pudding when, under the heading “Costs and benefits”, it talks about savings? The paper states:
I certainly thought that the wording was clear in stating that we are not in a position to give absolutely accurate information on the precise savings. That is why the wording suggests that we can look only at the total number of court actions for repossession. We do not know the number of court actions that actually result in a repossession because the granting of a decree of repossession does not necessarily result in a repossession, as sometimes the debtor then starts to comply or the lender continues to forebear. Even when the property is repossessed, the individual might have alternative accommodation arrangements so a formal homelessness application might not be lodged with the local authority. I felt that the information was as clear as it could be in stating that it is very difficult to provide an estimate of the total savings.
I accept that, but if we know neither the number of repossessions nor the percentage of repossessions that lead to homelessness, throwing all those figures together in a couple of paragraphs results in two very big numbers being put together whereas the real number involved might be small. In addition, the difference that will be made by the change in the regulations, as opposed to what happens currently, will probably be even smaller still. Therefore, instead of those huge savings, we could in fact be talking about a tiny saving, but we do not know one way or the other. Is that not right?
The lack of reliable, up-to-date information on the issue has always been a problem for us in trying to provide a proper estimate of the number of repossessions that result from court action and all of the other issues that Mr McLetchie has, very fairly, raised. It might be helpful if we supplied the committee with such information as we have, including the basis for the estimate that Stephen Sandham quoted. We are happy to put in the committee’s domain all the information that we have. We have tried to get a reasonable handle on the numbers, but it is very difficult—as I think the previous Administration also experienced—to get precise numbers or estimates.
I agree with that, and I have some sympathy for the position that the minister is in. However, if we are to urge Her Majesty’s Government and the UK regulatory bodies to provide information on repossessions in Scotland—a point on which we all agree—we also need to follow that trail of information down the line. There is no point in getting just the top-line figure on repossessions if we remain totally in the dark about the extent to which those repossessions result in homelessness and all the costs that follow from that. Otherwise, we will achieve nothing. We need to follow the issue all the way down. Once we get past that top line, the Scottish Government must be able to acquire the information below that through the research that it commissions. Will the Scottish Government do that?
What I want is a proper audit trail of what happens, but we cannot get that until we have the top number. Once we know the total number of repossessions, we will set in train the processes and procedures needed to provide an audit trail of what then happens, so that we have a far better handle on numbers, on destinations of people and on the cost to the public purse at each stage of the procedure.
Good. Thank you very much.
We have all acknowledged that we have had difficulties in obtaining the figures from central Government. Is one way of collecting the information to record the numbers that go through the court system and to examine the outcomes at that stage?
We have discussed the matter with the courts administration. The problem is that the information that the courts collect does not give us all the answers that we look for. We need the additional information from the financial regulators, which have the totality of the information. To have the audit trail to which Mr McLetchie was right to refer, we need the courts administration’s information, but we also need the financial regulators’ information.
I understand why we want the headline figure but, underneath that, the court figures would provide us with information on those who become homeless when a decree is granted, to whom Mr McLetchie referred. That could give more guidance on the provision that is needed to support those people. We need neither one aspect nor the other, but both. You have the power to get the court information, whereas we are clearly struggling to get the headline figure.
The courts can identify and record the number of decrees that are granted to a lender, but their monitoring arrangements do not allow or require them to monitor how many of the decrees that are granted result in a repossession. Sometimes, lenders use decrees almost as a stick to cajole debtors into starting to comply. The courts would argue that requiring them to track that process further downstream would be an additional cost and burden on the court system.
I and other conveners attended a meeting with the Secretary of State for Scotland last week at which it was made clear that the respect agenda extends not just to the Scottish Government but to the Parliament’s committees. With the committee’s agreement, I hope that we will be able to assist the Minister for Housing and Communities in his work on several issues, such as child poverty, the exchange of data on repossessions and perhaps elections, by writing to the appropriate ministers and inviting them to committee meetings.
Can I ask about the consequential provisions order?
I am racing ahead and trying to get out of here too early. You are correct—we have a round of questions on the consequential provisions order.
I have a brief question about the order. I have looked at the standard forms for notifying home owners, entitled residents and others about court action and potential repossession. The repossessions group hoped to put the forms in plain English as much as possible. I completely appreciate the legal requirement to ensure that the phraseology that is used in forms presents the legal position clearly, but a little bit of work might still need to be done to make the range of forms clearer.
We have agreed with stakeholders to carry out a plain English review of the forms at a later date when there is a legislative opportunity to do so. We have simplified the forms as much as possible and as much as the primary legislation allows us. Any further simplification in plain English terms will require amendments to the primary legislation.
It is perhaps slightly remiss of me not to point out that the current forms are a step forward from the ones that were used previously in terms of gobbledegook and jargon. However, we should keep them under constant review and, if it requires primary legislation to amend them further, I would welcome it.
Thank you.
As there are no other questions, I invite the minister to move motion S3M-6588.
I invite the minister to move motion S3M-6589.
I thank the minister and his officials for their attendance this morning.
Local Government Pension Scheme (Management and Investment of Funds) (Scotland) Regulations 2010 (SSI 2010/233)
Local Government Pension Scheme Amendment (Scotland) Regulations 2010 (SSI 2010/234)
The next item is consideration of two negative Scottish statutory instruments. No comments have been received from members on either instrument, and no motions to annul have been lodged. Do members agree that they do not wish to make any comment to the Parliament on either instrument?
I have one small query. It may be my reading of the regulations, but SSI 2010/233 gives authorities that administer pension funds the opportunity to borrow, which is expected to be used only on specific and rare occasions. It occurred to me in reading that instrument that I did not see where such authorities would have to comment on the fact that they had taken advantage of that power and borrowed.
Obviously, no comments were received before the meeting, and no one is here to answer that question, but we have time to find out.
My apologies for not raising the issue earlier, but it was only when I was rereading the regulations last night that the point jumped out at me.
We have time to bring officials back in September. Do we agree to do that?
I seek clarification. According to the papers that we have in front of us, SSI 2010/233 comes into force on 5 July. Do we have the luxury of time and waiting until September if any issue arises in response to those questions?
We will try to seek clarification before that date, but we have 40 days. Is that right?
Yes. The committee has to report on the regulations in early September, so it has time.
We understood that we would have time if such a situation arose, and we do.