Chamber and committees

We are confident that the skills base in Scotland and the supply chain are already growing and that, in terms of the Scottish Government’s commitment to take forward regulations—in this instance, on new build and, in the longer term, on the wider heating standard for Scotland’s existing housing stock—the regulations are necessary to give confidence to the industry that it is worth its while investing in those skills and in the wider supply chain capacity.

The one thing that we could do to guarantee that we would not see the growth in capacity that we need would be to decide not to take these steps or to delay or defer them until that capacity had grown to where it needs to be.

This is a long-term trend, and the commitment to decarbonising buildings right through to 2045 means that we will need continued growth in the sector over the long term.

Of course, this particular measure is not new to anyone. The first of the two consultations finished about two and a bit years ago, and there were indications of the direction of travel for a long time before that. I mentioned the Sullivan report, for example. The measure does not come as a surprise to the industry. Although it will apply to all buildings that get their building warrants from April next year, the phasing in means that there will be time for the industry to adjust. Developments that are being taken forward with existing building warrants that go through the process before April next year will continue to have that time to adjust. However, the number of developers that are already adopting the measure demonstrates an appetite to embrace the change, and I very much welcome that.

We are working very actively with industry to explore every option to increase capacity. For example, a recent development is the mobile heat pump training unit, which will enable those skills to be shared in places where there is not necessarily a college location or another place to site them and the mobile training unit will be of benefit.

I have visited both commercial and college sector training facilities that are gearing up and skilling up. The time that it takes to convert an existing gas engineer so that they have the skills to install heat pumps is relatively short. The conversion course takes a matter of weeks, rather than our having to train people up from scratch. The capacity is not non-existent at the moment. There is simply a need to transition the skill set from previous technologies—from what I call 20th century heating solutions—into those that will be dominant in the 21st century.

I do not know whether Gareth Fenney wants to say any more about the skills side.

First, that particular measure has to be seen in the context of the wider changes. Some of your witnesses in the earlier session talked about decarbonising and moving to electric sources and whether all that is happening at the same time as the installation of electric vehicle charging points and other changes that are going to be necessary if we are to reach our carbon emission targets. The way in which we produce, store and consume energy is changing, and inevitably that will have an impact on the grid.

The fact is that the decisions on such investment are made by Ofgem, which will look at the number of heat pumps, EV charging points and so on that will be required. As well as the direct numbers that it provides, however, it has also set out what is called an uncertainty mechanism, which allows developers to say, “We need more capacity here” and allows distribution network operators to be part of that process.

We believe that there will be enough capacity for the changes that we are bringing in. We also know that, in certain areas, retrofitting might be more problematic than new build—indeed, some witnesses acknowledged as much in the previous session—but we are already bringing together a wide range of organisations, including the DNOs in Scotland, in a working group that shares those perspectives. It will not only work out how we resolve some of the issues that exist within Scottish Government powers but set out how we can make the case for any changes that might be required at UK level. Claire Jones might be able to say more about some of the more technical aspects, but there is no getting away from the fact that reaching our net zero targets is not just about how we build things but about the redesign of our energy system more generally.

The other thing that I would connect to the work that we are doing here is demand reduction. The most effective way in which we can reduce the extra load on the grid is to build really energy-efficient homes and buildings in the first place. If we are going to electrify heat, everything that we do to reduce heat demand will also reduce electrical draw.

Although it is not technically relevant to the instrument that we are discussing—which is a clarification of the drafting of the legislation on the introduction of rent adjudication measures, as and when the temporary measures come to an end—when we referred to the landlord registration figures, we made it clear that that is only an administrative source of data. It does not provide the rich granularity of data that all stakeholders recognise is necessary. Longer-term reforms need to be made to ensure that there is data collection in the private rented sector at the level that we need it.

Although we have an admittedly limited source of information through the landlord registration scheme, it shows that there has been no decrease, and perhaps a slight, very marginal, increase in the number of registered properties prior to the emergency measures coming into force. Mr Briggs is right that there would be a time lag between landlords seeking to make decisions about their future in the industry and any deregistrations. We acknowledge that that is the case and we have presented the information that we have available to us.

As I said in response to your first question, everybody—landlord organisations, tenant organisations, housing academics and the Government—recognises that there is significant need for additional data and for depth, detail and granularity of data in the private rented sector. That is a long-term piece of work, and the Government will bring further work for the attention of the committee and Parliament to improve the collection of data in the private rented sector. For the time being, we have noted that the information that we have, limited though it is, from the landlord registration scheme does not show a drop-off in the number of properties that are available.

Good morning, convener, and thank you. I am happy to be here today to present the draft Cost of Living (Tenant Protection) (Scotland) Act 2022 (Incidental Provision) Regulations 2023.

As we have discussed with the committee previously, you will be aware that the emergency Cost of Living (Tenant Protection) (Scotland) Act 2022, which was passed last year, had three key aims: first, to protect tenants, stabilising their housing costs by freezing rents; secondly, to reduce the impact of eviction and homelessness, through a moratorium on evictions; and thirdly, to reduce unlawful evictions and avoid tenants being evicted from the rented sector by landlords who want to raise rents between tenancies during the operation of the temporary measures.

Last month, the committee considered and voted for regulations to extend some of those provisions beyond 31 March to the end of September this year. I was pleased that the Parliament also voted to approve the regulations, thereby ensuring that important protections for tenants continue, given the challenging and uncertain economic times.

Although it is crucial that some emergency provisions continue for the time being, the emergency 2022 act is, of course, temporary, and it is equally important that we plan for the time when the protections come to an end.

During the passage of the Cost of Living (Tenant Protection) (Scotland) Bill, we acknowledged that termination of the rent cap might lead to a large number of private landlords seeking to increase their rent all at once, which could cause significant and unmanageable rent increases for tenants. In those circumstances, the existing rent adjudication process will need to be temporarily modified, to provide a suitable adjudication mechanism that is fit for purpose.

For that reason, the emergency 2022 act contains a regulation-making power to temporarily reform the existing rent adjudication process, which was brought in by the Private Housing Tenancies (Scotland) Act 2016. The proposed approach would support our transition out of the emergency measures and help to mitigate unintended consequences that might arise from our bringing the temporary rent cap to an end.

Schedule 3 to the emergency 2022 act provides ministers with the power in that regard. The short affirmative instrument that the committee is considering today makes a minor technical amendment to schedule 3, to put it beyond doubt that the powers that are conferred on the Scottish ministers function as intended. It does that by renaming a title and heading, renumbering a section and correcting a reference. That will ensure clarity if and when the Scottish ministers choose to exercise the powers conferred on them in schedule 3. Instruments that are made under that power will be subject to the affirmative procedure and subject to scrutiny and approval by this committee and the Parliament.

The severity of the costs crisis and the urgent need to respond quickly meant that the 2022 act had to be drafted and delivered at pace, to ensure that tenants could be offered additional protection as quickly as possible. The short technical instrument that the committee is considering today clarifies a small part of the drafting, to ensure that the important rent adjudication provisions will work as they are intended to do when the time is right to bring the emergency provisions to an end.

I thank the committee for its scrutiny of the draft regulations. I am happy to answer any questions that you have.

The Scottish Government has a responsibility to ensure that temporary emergency measures are necessary and proportionate and that they are appropriate and fit with our housing objectives, and we have a responsibility to take that approach to our new housing bill so that it is consistent with what we seek to achieve in housing.

As a starting point, we recognise that the right to adequate housing is a human right. That has not been delivered by everyone, and we have a situation in which the level of regulation on a number of standards is significantly different between the private and social rented sectors. We are seeking to reduce the gap in outcomes between those types of tenures. Our experience is that, in the long term, increasing the quality of the regulation of the private rented sector is compatible with growth and viability in that sector.

Although I have noticed that some people have sought to blame the emergency measures for decisions that have been made on the new supply of rented accommodation, the measures have no impact on initial rent setting; they impact only in-tenancy annual rent increases. I recognise that some people will argue against any form of protection for tenants or regulation in the market. I do not think that that extreme position would be appropriate, but we will seek to continue to ensure that the measures that we take strike the appropriate balance between providing safeguards for landlords, which are included in the emergency 2022 act, and continuing to expand protection for tenants.

In our view, the provisions will clearly, almost by definition, have prevented some rented sector households from falling into homelessness by, as I said, giving them extra time to find alternative accommodation or seek housing advice and support from specialist agencies.

For private rented sector tenants, the measures continue to provide protection by making it easier and more meaningful, as I said, to challenge unlawful eviction. Unlawful eviction is a type of experience that people can go through that is more likely to lead to homelessness. In fact, I count myself among their number. I narrowly avoided homelessness when I was evicted from a flat by a dodgy landlord long before some of the current protections were in place, so I take very seriously the impact on people’s lives when they encounter those behaviours or practices.

The longer-term work on homelessness prevention duties is, I think, long awaited by the sector. We have engaged extensively with stakeholders to make sure that the measures that we bring forward will help to strengthen the protection against homelessness and to reduce it. I am not sure whether Adam Krawczyk has any current data that he wants to throw into the conversation on current patterns.

The impact has been a subject of concern from the social rented sector, but we have been pleased with our ability to reach agreement with the sector. The average approach—the approach of not setting a cap and not even seeking a voluntary, uniform cap for the social rented sector, but of offering an average instead—allows for some flexibility.

Some social landlords will have an urgent need to invest in quality and maintenance as well as other aspects of their investment programme. Some will have managed more successfully than others to keep rents low and under control during the pandemic. They will not all have followed exactly the same path, because they are independent bodies. Given the different circumstances that different social landlords are in, it was appropriate that we allow some degree of flexibility.

Social landlords exist for a social purpose and they are not there to extract the maximum rent that they can extract from the properties that they have on offer; they take that social purpose very seriously. None of them would seek to impose unaffordable rent increases or ones that could reasonably be avoided. In fact, we are seeing early indications that the rents that are being set are significantly below average. I have seen figures from some local authorities that have set their rent increases for the coming year at 2, 3 or 4 per cent—significantly below the average that we have been seeking. We anticipate that that will continue to be the case, and the Scottish Housing Regulator will continue to give us information on that.

Obviously, we are in regular dialogue with them. I have to say, though, that I have seen some media reports that have not quite captured the full detail of this. If there is an announcement about what is going to happen to the cap, not every media report will properly capture the difference between the impact on the social rented sector and the impact on the private rented sector. That is why we need to continue to work directly with social landlords, for example, who have that on-going responsibility for consultation and tenant engagement, as well as with private landlord representative bodies and organisations that speak directly to and advocate on behalf of tenants.

It also worth reflecting on the fact that there is a role for organisations that engage with tenants in the social rented sector but which are not social housing providers, such as the Tenants Information Service, and the work of local authorities such as Glasgow’s tenant-led housing panel—is it a panel? [Interruption.] I have been told that it is a commission—I will actually be seeing some of them later this week. They, too, continue to have a role not just in letting us know about additional channels of communication that we should be using but in speaking directly to tenants. Indeed, they have been very active in doing so.