Agenda item

RESOLVED: That the Committee:

a)    Support the proposals to introduce the licensing of flats over commercial property that are going to Mayor and Cabinet.

b)    Would like to continue to receive updates as part of its 2015-16 work programme.

3.1      Roz Spencer (Co-ordinator, Rogue Landlords Taskforce) gave a presentation to the meeting. The key points to note were:

§  The presentation included an overview of the information that the Committee had previously received at their December 2014 and March 2015 meetings.

§  For a proposal to introduce additional licensing of flats over commercial property (which is about 4,200 lettings in 1,800 properties), the Council proposes a charge of £500 for a 5-year license. Assuming the smallest letting – at local housing allowance level - this fee would represent approximately 2% of the rental income.

§  The estimated total recoverable costs from the license fee would be approximately, £1.997m.

§  The enforcement costs to the council General Fund would average £350,000 – 480,000 per year for 5 years. This would be a cost of up to £2.4m. Aware of the need to limit the cost to the council of the scheme – officers have costed the scheme on the basis of counting everything required to run the scheme from a zero base. In practice however, some of the resources the Council needs are already built into the base budget – and the allowance for corporate overheads could also be squeezed – so officers are aiming to bring the actual costs down to lower end of this range when we have worked up the detailed scheme.

§  £25,000 would need to be found from this year’s existing budgets to fund the consultation for the scheme.

§  Conclusions are:

o   Worst PRS is over commercial premises

o   Licensing can provide a portfolio solution for regulation

o   Cost of running a scheme ranges from £350,000 to £480,000 per year

o   Risk of reducing supply of affordable housing set against the risks of failing to raise standards in the worst PRS stock in the borough

·         The project work & timetable for the scheme is as follows:

o   Work up detail of scheme and license conditions

o   Possibility of procurement of Northgate software and web portal for online license applications

o   Consultation and consideration of feedback – minimum of 12 weeks

o   3 month publication Notice  -12 weeks

o   Critical path estimated - minimum 9 months

3.2      In response to questions from the Committee, the following was noted:

§  Lewisham will ensure that the consultation process meets all the requirements necessary to reduce the likelihood that it would be subject to a legal challenge.

§  Local authorities cannot recover the costs of enforcement from a licensing scheme, nor can it recover the initial start-up costs for the scheme.  Costs to run the scheme are recoverable through the licensing fee.

§  When the Council sets its budget, it calculates its income from council tax based on a number of complex variables. Officers would be wary of introducing further variables into the estimation of the collection of council tax based on what might be recovered as a result of the licensing scheme.

§  Lewisham has formed an internal bailiff team that is helping with the enforcement of unpaid council tax.

§  Officers have attempted to estimate the amount of lettings in the prescribed area, and not the amount of landlords who may operate there.

§   The fee to landlords is estimated to be about 2% of a landlord’s average annual income in Lewisham.

§  The Council will continue to work to tackle rogue landlords in the borough, and due to the work already being carried out, some of the costs of the licensing scheme will be offset by systems already in place.

3.3       RESOLVED: That the Committee:

a)    Support the proposals to introduce the licensing of flats over commercial property that are going to Mayor and Cabinet.

b)    Would like to continue to receive updates as part of its 2015-16 work programme.